Table 2 Literature of relevance for the Qianhai Design Question

CEPA (and special/border economic zone literature more generally)

Chen and Unterober-doerster (2008), Shen (2014), Shen and Luo (2013), Hsiao (2012)

Question: Based on previous experience with economic integration in the Guangdong region, would Qianhai actually generate benefits above/beyond the status quo?

Result: Several poorly done studies show that regional integration has generated benefits so far. Yet, Hong Kong’s institutions and rule of law explain any profit-generating innovation better than simple economic integration. Thus, if Qianhai can share some of Hong Kong’s institutions, the project would be much more successful

Innovation Systems literature

Baark and Sharif (2006), Xu et al. (2010), Fu (2011), Fu and Li (2011), Li et al. (2006)

Question: What does it take to make an innovative area (cluster)? What parts of a Qianhai-law would lead to innovation-led profits (and thus demand for Hong Kong’s financial services)?^a

Result: Institutions represent a key constituent for growth. Given the tension between Hong Kong’s Anglo-Saxon “variety of capitalism” and Shenzhen’s “Continental variety of capitalism,” any Qianhai-law holds little promise of working in the medium-term. Moreover, forced growth (rather than organic growth) makes firms locating in Qianhai less likely to survive/thrive

Finance of Innovation literature

Cheung et al. (2015), Sharif and Huang (2010), Baark et al. (2011)

Question: Will more govt-led finance in Hong Kong and Shenzhen actually result in innovation-led profits far in excess of the status quo?

Result: Scholars can not agree. But complementarities between the two jurisdictions likely lead to conflict rather than cooperation

Investment flow literature

Girma et al. (2009), Wang and Wang (2011), Zhang (2010)

Question: How to encourage investors in the Qianhai region and outside to invest in Qianhai-based companies?

Result: Such a push probably mis-guided. Capital needs to go to highest productive use. Encouraging capital to go to Qianhai without existing great ideas distorts capital, labour and goods/services markets