The Dynamics of Special Economic Zones in Manufacturing Industry to Economic Transformation: the Case of Dire Dawa City

Abstract

The significance of a country’s special economic zones, especially manufacturing industries received great attention for economic transformation. The aim of the study is to deal with the dynamics of special economic zones in manufacturing industry to economic transformation in Dire Dawa City. No study conducted in the area of special economic zones in manufacturing industry at national as well as regional level.  In this study, we used 57 operational manufacturing firms in 11 sub-sectors to examine the more dynamics of special economic zones for economic transformation. The concurrent mixed research design was employed. Both primary and secondary data were collected. The study found that it has a significant effect on economic transformation in terms of employment, export product diversification, industrialization, urbanization, and regional economic growth. However, it requires placing special measurement to tackle, manage and implement properly through reducing negative consequences. The study, therefore, recommended that the city and the federal government should develop, design and implement successful special economic zones strategies to attract and sustain investment.