Special Economic Zones (SEZ) are specific regions of a country with different economic regulations than the country as a whole. One of the main objectives of SEZ is to attract foreign direct investment (FDI), industrialization, employment generation, and export. SEZs generally provide incentives like tax holidays, customs duty exemption, and simple regulatory frameworks to facilitate the operations of businesses within these zones (OECD, 2020). These areas have been extensively utilized in the developing world to promote economic growth and development by fostering attractive environments to entice investors, both domestic and foreign (Buiter, 2021; Ebrahimifard et al., 2024).

China was among the first countries to create SEZs in the 1950s. On the other hand, China has accelerated its economy in the past 2 or 3 decades by introducing special economic zones (SEZs), where the typical procedures of the Chinese economy operate differently with fewer restrictions (Lin & Wang, 2020), especially in Shenzhen. China managed to make use of the SEZ model, and it developed rapidly, and after this success, many other countries followed China with the SEZ model, which also led to Bangladesh's use of the SEZ model to become the country's development. Bangladesh: In Bangladesh, under the Bangladesh Economic Zones Act, BEZA was established to monitor the development and operation of SEZs (Background Papers: Special Economic Zones, 2023). Since its inception, BEZA has been in charge of the various economic zones, and the number of planned SEZs is expected to reach above 100 by 2041 (BEPZA, 2023).

Mirsarai NSEZ covers about 33,800 acres as one of the largest SEZs in Bangladesh. This is a phased development zone, which would attract both local and foreign investments in textiles, electronics, and agro-processing (BEPZA, 2023). Others include sector-specific SEZs like the Sabrang tourism park in Cox's Bazar that is focused on the tourism sector, in the hope of promoting the tourism sector of the country (Bangladesh investment development authority (BIDA), 2023). The establishment of SEZs (special economic zones) is a vital component of the government's strategy aimed at addressing regional economic imbalances, strengthening the industrial base, and connecting the Bangladeshi economy with global supply chains. In this way, SEZs are regarded as necessary vehicles for the realization of industry-led growth in the country, as well as infrastructure upgrading and economic diversification in Bangladesh (UNCTAD, 2022).

Importance of SEZs in Economic Development

Particularly in developing countries like Bangladesh, Special Economic Zones (SEZs) have become the basic instrument behind economic progress. The establishment of these zones aims to promote industrialization, attract foreign direct investment (FDI), create jobs, and facilitate exports. The SEZs also play a vital role in encouraging FDI, as they provide a conductive business atmosphere by generally providing various benefits in a package, like exemptions on taxes, customs procedures, and the development of infrastructure. A major instance of this is Bangladesh, which has gained a competitive edge in attracting foreign direct investment through the establishment of one industrial park or SEZ after another, such as the national Special Economic Zone situated in Mirsarai, Chattogram (Bangladesh Economic Zones Authority [BEPZA] Fund, 2023 ), in critical areas like textiles, electronics, and geoprocessing. Additionally, other notable features of SEZs include their significant role in facilitating industrialization and driving export-led economic growth. Since 1983, the Chittagong Export Processing Zone (CEPZ) has drawn investments of US$2.04 billion and sustained cumulative exports of US$40.5 billion as of 2022–23, resulting in a large boost in Bangladesh's export competitiveness (BEPZA, 2022).

SEZs are also known to create employment opportunities, particularly in developing regions; each year, they generate thousands of job openings across various industries. This is bolstered by the government having started their skill development programs aimed at skilling the local workers as per the requirement of the businesses operating in these zones (Bangladesh Investment Development Authority [BIDA], 2023, para. 2). The construction of roads, ports, utilities, and communication networks inside SEZs promotes regional development, as better connectivity in nearby regions supports smoother logistics and trade operations (UNCTAD, 2023). Special Economic Zones are often linked to the transfer of modern technology and management techniques from foreign companies to local enterprises, which improves the technological competence and productivity of the local industry. The transfer of technology is critical for facilitating innovation, efficiency, and sustainable industrial development (OECD, 2023). In addition to offering tax incentives in SEZs, various facilities generate government revenue, including service fees, infrastructure benefit charges, and other indirect tax revenues that contribute to the economic structure (World Bank, 2022). Thus, SEZs take the role of multi-dimensional instruments of economic development, bringing about industrial diversification, investment, employment, and regional linkages, all of which are essential for sustainable development in the long term.

Research Problem and Objectives

Special Economic Zones (SEZs) have emerged as an essential component of the economic paradigm of an economy in many developing regions, including South Asia and Africa. Bangladesh regards the establishment of SEZs as a crucial program for industrial development, attracting foreign investment, and promoting exports. However, the crucial role of SEZs in regional supply chain networks in Bangladesh remains unexplored. Different studies have researched the economic impacts of these SEZs (Lin & Wang, 2020; OECD, 2020), including how they attract FDI and contribute to the industrial dynamics of their respective areas; however, few have actually examined their effects on supply chain efficiency, regional trade integration, and logistics. This gap is primarily due to the absence of practical data linking the establishment of SEZs with the upgrading of regional supply chain networks in Bangladesh. While SEZs have successfully attracted investments and boosted exports, they seem to lag behind in stimulating or increasing the flow of goods and services to and from Bangladesh. Although SEZs may have been effective in fostering industrialization, little is known about the challenges of businesses, logistics providers, and workers within these zones, including infrastructure, regulation, and labor. The research problem is to examine how SEZs in Bangladesh influence the formation and development of regional supply chain networks. The topic essentially involves knowledge of how SEZs may affect logistical efficiency, export performance, employment generation, and regional connectivity. It will also look at the key barriers to the profits related to these zones by some stakeholders: businesses, logistics companies, and employees.

Research Objectives

1. Assess the impact of SEZs on regional supply chain efficiency in Bangladesh.
2. Evaluate the contributions of SEZs to logistics, infrastructure, and trade integration.
3. Identify challenges faced by businesses, logistics companies, and workers within SEZs.
4. Provide policy recommendations to optimize SEZ operations for improved supply chain performance.

Global Perspective on SEZs and Supply Chain Networks

The world over, Special Economic Zones (SEZs) have been fundamental components of economic infrastructure catalysts for well-distributed industrialization, facilitators of expeditious foreign direct investment (FDI), and contributors to the overall improvement of trade efficiency. SEZs have helped create competitive supply chain networks globally, evident from their growth and success, especially in countries such as China, India, and Singapore. Chinese SEZs: The success of China in becoming the number-one manufacturer globally and improving its supply chain abilities is rooted in SEZs, such as the entrepreneurship and talents localized in the city of Shenzhen (Lin & Wang, 2020). SEZs have enabled export-oriented growth more successfully than regular economic policies by lowering taxes, reducing logistical constraints, and facilitating cross-border flows of goods and services (Buiter, 2021). SEZs in Africa and Latin America have also played an important role for regional integration areas by enhancing regional infrastructure and trade linkages and thereby contributing to further regional integration: the availability and sharing of special economic zones enhance the role of SEZs in regional supply chain networks (Organisation for Economic Co-operation and Development [OECD], 2020).

Case Studies and Lessons from SEZs in South Asia

Special economic zones have been leveraging industrial development, exports, and regional integration in South Asia. For example, while SEZs have been used in some countries to promote regional economic imbalances, others, such as India, Sri Lanka, and Bangladesh, have used them to promote integration into global supply chains and attract FDI. For instance, India has more than 230 operational SEZs, which have made substantial contributions to its export performance and industrialization (India Ministry of Commerce, 2020). Studies have shown, however, mixed results, as some zones cannot achieve their targets because of lack of infrastructure, red tape, and few local enterprises (Goyal & Kaur, 2019). In Sri Lanka, starting of the Katunayake Export Processing Zone in 1985 has been a major factor in producing high export growth, predominantly in textiles and garments (Perera, 2018). The case studies illustrate that although SEZs effectively draw FDI and spur industrialization, their contribution to supply chain networks is contingent on variables like infrastructure, regulatory effectiveness, and local economic integration.

Bangladeshi economic zones: Impacts and development

The establishment and introduction of SEZs are an integral component of Bangladesh's broader economic development strategy, offering tremendous possibilities to reshape its industrial base and regional supply sources. The government, through the Bangladesh Economic Zones Authority (BEZA), has been working on making a solid SEZ framework. Bangladesh has 12 SEZs operating in 2023, and the government plans to increase this number to 100 by the year 2041 (BEPZA, 2023). The impact of SEZs in Bangladesh on attracting FDI, especially in the textiles, electronics, and Argo-processing sectors, has been noticeable. As such, SEZs have drawn in more than $1.5 billion (BEPZA, 2023) of FDI, driving both exports and employment creation. Nonetheless, issues of infrastructure, regulatory inefficiencies, and skilled labor shortages have prevented their complete integration into regional supply chains (Hossain, 2022). With an aspiration to integrate higher in the global supply chain, SEZs will continue to be important instruments for promoting industrialization and increasing trade links with regional markets in Bangladesh.

Theories Related to Regional Supply Chain Integration

Theories of regional integration of supply chains suggest that there should be seamless links within and across industries, logistics networks, and markets. A principal theory is the Theory of Comparative Advantage, which states that regions should specialize in producing goods for which they have the highest efficiency; this specialization then leads to the creation of regional agglomerations of supply chains (Ricardo, 1817). Recent theories, including Global Value Chain (GVC) theory, contend that regional integration should be directed towards developing cross-border competitive advantages by means of enhanced logistics, trade facilitation, and knowledge across borders (Gereffi 2018). SEZs serve a key function in GVCs through the provision of infrastructure and opportunity for high-level economic activity under market conditions within a region. According to the Regional Supply Chain Integration Theory, the alignment of policies, infrastructure, and investments within a region is essential for the successful integration of regional supply chains within Special Economic Zones (SEZs), leading to increased cross-border trade and logistical effectiveness (Feller, 2017).

Literature Gap and Contribution of the Study

While the economic implications of SEZs are considerably researched, less is known about the importance of SEZs in integrating regional supply chains, particularly for many countries in South Asia. Up until now, the majority of studies have primarily focused on the general economic effects of SEZs, such as attracting foreign direct investment (FDI) and increasing exports, while neglecting the specific features of SEZs that enhance supply chain networks both domestically and internationally (Buiter, 2021; OECD, 2020). Further, there is limited research on the problems, such as inadequate infrastructure and policy constraints, that businesses, logistics providers, and workers face in areas with SEZs when trying to join a regional supply chain. These gaps indicate a need for research that examines whether the establishment of SEZs in Bangladesh has the role expected in terms of supply chain network formation in the surrounding region, as well as to document their positive impacts and the challenges entities have to overcome to realize the utmost benefit.

Research Design

The research is conducted via a mixed research design hence; quantitative and qualitative research models are used to analyze the impact of Special Economic Zones (SEZs) on regional supply chain networks in Bangla-desh. The quantitative strand relies on statistical data collected via structured surveys/ questionnaires that target businesses, logistics providers, and workers of SEZs. The second set of surveys seeks to evaluate the impact of SEZs on supply chain efficiency in relation to critical factors such as costs, logistics, and infrastructure-related dimensions. The first qualitative component comprised a detailed examination of open-ended survey responses, while for the second, open-ended interviews, being willing to give the opportunity for even deeper perspectives in terms of the challenges and opportunities experienced or presented by SEZs, from the viewpoints of business owners, logistics providers, and workers. Utilizing a mixed-methods design, the study combines the quantitative with the qualitative to provide a contextualized understanding of the broader impacts of SEZs on regional networks.

Surveys and Questionnaires for Data Gathering

The data for the study was collected via structured surveys and questionnaires covering three primary groups, including business owners working in SEZs, logistics companies working in SEZs, and workers working in SEZs. The questionnaires were a mix of qualitative (open-ended) and quantitative (ratings, frequencies) data on how SEZs are influencing regional supply chains.

Business Owner Questionnaire

That centered on how SEZs impacted their businesses in terms of supply chain, exports, and infrastructure through the Business Owner Questionnaire. Questions included whether or not incentives were provided, the extent to which infrastructure support was included, challenges experienced, and the overall impact of SEZs on the regional integration of creating a larger market within the region. It also collected data on the increase in exports and benefits accrued to those operating inside SEZs in terms of logistics.

Logistics Company Questionnaire

The Logistics Company Questionnaire was administered to logistics providers that actively work within, or adjacent to, SEZs. The objective was to understand the impact SEZs have made on a logistics function such as transportation, warehousing, and customs clearance. The survey also inquired if SEZs have aided in reducing logistics costs and improving supply chain efficiency in the region. The questionnaire contained closed and open-ended questions in order to gather quantitative data as well as qualitative insights on logistics problems faced and suggestions for improvements in these SEZs.

Worker Questionnaire

The third SUB section was the Worker Questionnaire, which focused on people working in SEZs, with the objective to understand how SEZs had affected their job contentment, the development of their skills, and their working conditions. The questionnaire contained both quantitative and qualitative questions, focusing on issues like job security, training facilities, and the overall impact of SEZ employment on the career progression of workers. And it tried to pinpoint widespread problems experienced by employees in SEZs, like lack of training, low pay, or less than ideal conditions.

Research Site and Data Sources

This study sought data from 50 respondents: 15 from business owners directly operating within the SEZs, 15 logistics companies that would employ these workers, and 20 workers themselves within the SEZs. Partici-pants were chosen with these characteristics in mind in order to sample a variety of experiences among different stakeholders involved with SEZs. SES (Special Economic Zones) are newly industrializing areas, and the respondents were selected on the basis of their involvement within the SEZs, the sampling strategy was also designed to reflect a balance of small, medium, and large enterprises and a variety of industries within the SEZs.

Data sources include:

• Primary Data: It was collected through the surveys and questionnaires that were provided to business owners, logistics companies, and workers.
• Secondary Data: Available public documents about Economic performance of SEZ; Export Data; FDI inflow; Regional trade performance from BEPZA, the Ministry of Commerce, and other government data sources.

Data Analysis Methods

Quantitative and qualitative methods of analysis combine to discern patterns, relationships, and themes from the collected data based on the above-mentioned discussion of the research questions addressed.

Descriptive Statistics

Quantitative data from the Surveys were summarized and described using descriptive statistics. The distribution of responses regarding the role of SEZ on supply chain efficiency, export boost, and infrastruc-ture growth, in terms of key measures (frequencies, percentages, mean, and standard deviation), was calculated. These are descriptive statistics covering perceptions and experiences of respondents who have either heard of SEZs or have worked with them, and they provide a basis for further, more advanced analyses.

Correlation and Regression Analysis

Correlation analysis was performed to examine whether there were any significant associations between the key variables (i.e., SEZ participation, supply chain performance, and business outcomes, such as export volume, FDI, etc.) to assess the relationships among all the variables. Words: Regression analysis to predict how SEZ-related factors affect supply chain efficiency. For instance, the regression model may analyze the effect of infrastructure enhancement or subsidies on the logistical performance of firms based in SEZs. With a quantitative style, this means that the author has a more precise knowledge of supply chain optimization processes as to what catalyzes this phenomenon in the different SEZs.

Thematic Analysis

In the qualitative data collected through open-ended survey responses and interviews, thematic analysis was carried out for themes and patterns about the challenges and opportunities for SEZs. This means coding the responses into categories and searching for general themes (common infrastructural challenges or regulatory barriers, or perhaps again, issues related to labor). This qualitative response offers more vivid detail in regard to their experiences as business owners, logistics providers, and workers, which strengthens the quantitative findings.

These results suggest a large, but heterogeneous, effect of Special Economic Zones (SEZs) on the regional supply chains in Bangladesh. The three main groups of stakeholders (businesses, logistics firms, and workers) largely agree that SEZs are beneficial to supply chain efficiency, infrastructure, and economic development. Nonetheless, the study also highlights some of the significant hurdles, including labor conditions and regulatory inefficiencies that will have to be overcome to realize the full potential of SEZs.

SEZs play a crucial role in enhancing the efficiency of the supply chain.

According to the study, logistics companies have benefited the most from efficient supply chain processes owing to infrastructure improvements and streamlined customs processes within SEZs. This finding aligns with previous studies indicating that special economic zones, particularly when infrastructure supports operations, reduce logistics costs and enhance turnaround times (OECD, 2020). However, business owners agreed that things had improved, especially export volume growth and logistical improvement. Such evidence is consistent with past research, which shows how SEZs lower trade obstacles and promote supply chain coordination through SEZs (Buiter, 2021). Nevertheless, despite improvements in supply chain efficiency, the worker survey found less direct perception by the workers, suggesting that those business and logistics level enhancements do not directly translate to tangible worker benefits regarding job satisfaction and wage (Hossain, 2022).The difference indicates that while SEZs can drive economic growth and business profits, their benefits do not extend to workers, who may not directly experience the advantages of the increased operational efficiency.

Infrastructure and Logistics Improvements

Contribution to supply chain efficiency given better infrastructure improvements within SEZs and JIT provided by SEZs in most of the member countries A large number of qualified transport service providers are available for various activities, including ports and shipping routes. Within SEZs, logistics firms were the most satisfied with transportation infrastructure, warehousing facilities, and customs clearance processes. This aligns with evidence from inter-national case studies (e.g., Chinese SEZs, Indian SEZs), which show that infrastructure is a major determinant of logistical performance and foreign direct investment (FDI) (Lin & Wang, 2020). However, there was significant division among business owners and workers, particularly regarding the consistency of infrastructure development across SEZs. Landmark progress has been made in larger zones, such as Mirsarai in Bangladesh, whereas connectivity and facility improvements have fallen behind, particularly in smaller zones (BEPZA, 2023), raising concern in industry reports. A lot of the infrastructure upgrades have been an improvement for the logistics firms and companies that are utilizing them, but the working conditions the stated improve-ments spawn are not so much. Employees complained that their workplaces had fallen behind the actual advances in logistical infrastructure. The gap between these roles highlights the importance of ensuring development strategies do not simply focus on the physical and logistical infrastructure of SEZs but on the well-being and welfare of the coast trade workers who keep these frameworks afloat (UNCTAD, 2022).

Challenges Faced by SEZ Employees

Among the major issues faced were low wages and poor working conditions, key issues that erode the possible benefits to workers from working in SEZs. While SEZs offer permanent and skill-enhancing jobs, they still employ workers under temporary contracts with limited opportunities for advancement. This study is consistent with findings from additional research conducted on SEZs in South Asia, which has reported poor working conditions for workers, including low wages and very little opportunity for skills training, which may inhibit longer-term career outcomes (Perera 2018). On the other hand, businesses and logistics companies solely benefit from SEZs, indicating a divergence in the benefits they offer stakeholders. Although business owners and logistics companies acknowledged gains in the supply chain, regulatory processes, and infrastructure, they barely recognized workforce needs, which may indicate a mis design in SEZs. Neglecting the welfare and skill development of workers means that SEZs cannot serve as sustainable long-term drivers of economic development and social welfare (Gereffi, 2018).

Suggestions for Improvement

Recommendations from workers, business owners, and logistics firms underscore an urgent necessity for balanced growth in SEZs. To ensure that the benefits of SEZs reach all concerned parties, particularly workers, we must improve wages, working conditions, and training programs. In this regard, as many studies emphasize, skilled labor is a critical element for the long-term viability and competitiveness of SEZ industries (OECD, 2020). Higher wages, solid career advancement, and job security can encourage workers to reward better-performing SEZs with higher productivity and longer tenure, both of which are critical for ensuring the success of the zones in the long run. Regulatory inefficiencies were also touted as a key bottleneck for entrepreneurs and logistics firms. The importance of fast-tracking the regulatory process matches the recommended strategy of SEZ studies in other regions, where bureaucratic bottlenecks frequently retard the benefits expected to flow from SEZs and deter investor interest (Buiter, 2021). Easing customs and other bureaucratic hurdles would benefit businesses and logistics providers alike, while also benefiting workers by removing bottlenecks that dampen the production and distribution process.

The paper offers great insights about the pivotal role of Special Economic Zones (SEZs) in determining regional supply chains in Bangladesh, but it also reveals the awful policy challenges we face with regard to labor well-being and regulatory issues. SEZs have improved the supply chain and infrastructure, but not all stakeholders have benefited. What was good for business owners and logistics companies, though, left workers (e.g., warehouse workers) with low wages and poor working conditions and almost no career development. These labor-related issues must be sharply addressed in order for SEZs to realize their full potential without losing the impetus gained from the infrastructure and regulations push. A true approach to SEZs in Bangladesh cannot be merely functional; it must be holistic a complete approach-but only then can they be sustainability drivers of economic & social development.

While SEZs have provided significant advantages to the businesses and logistics companies operating in them, the workers who operate in the zones have struggled. Widespread workforce dissatisfaction was partly a result of low wages, generally poor working conditions, limited training opportunities, and job insecurity, combined with considerable conflict between management and workers, which highlighted an increasing imbalance in the distribution of SEZ benefits. Such suggestions mean that the aspirations of SEZs cannot be pursued without bringing the worker into the picture, whose welfare is central to long-term goals of success and sustenance of SEZs. The research also highlighted areas like regulatory delays and bureaucratic inefficiencies, which ended up hampering the functioning of business owners and logistics companies but could be addressed through reforms to streamline several processes and reduce administrative bottlenecks. This also presents a timely opportunity for policy reforms that can ease regulatory frameworks and focus on holistic development strategies aimed at improving worker well-being, skills development, and career pathways. Such actions would serve to recon-cile the economic advantages of SEZs for employers with the lived realities for workers in these zones. To summarize, SEZs have undoubtedly played a prominent role in boosting regional supply chain efficiency and the economic growth of Bangladesh overall, but the stakeholders are not benefitting from it equally. Given their potential, it is important for SEZs to be multi-faceted, both in terms of developing infrastructure for business-style operations and also considering the conditions under which labor is provided and ensuring the job security of workers. In this way, SEZs can ultimately become genuine pillars of sustainable economic and social progress for all actors, both driving and benefiting from sustainable development for the long term. The findings of this research provide useful knowledge on the unpreced-ented nature of the SEZ impact on linkage development within the Bangladesh context, thereby providing a platform for optimal SEZ management between policymakers, SEZ managers, and businesses to contribute to a fairly distributed SEZ structure. Further studies may offer new perspectives on the sector-specific consequences of SEZs and the validity of recommendations aimed at enhancing worker welfare while ensuring their operational efficiency.

Descriptive Statistics

Descriptive statistics were performed to provide a detailed overview of respondents' views and experiences of the effect of the Special Economic Zone (SEZ) on supply chain efficiency, infrastructure, logistics, and the workforce environment. We tallied statistics such as mean, standard deviation, and frequency among business owners, logistics firms, and workers within SEZs. The Business Owner Survey was focused on assessing the impact of SEZs in sectors such as supply chain management, exports, and logistics infrastructure. Sixty percent of the 15 business owners claimed that supply chains have improved because of better logistics, improved infrastructure, and fast-tracked customs, rating the significance a mean of 4.1 (SD = 0.8). Regarding the impact of SEZs on export performance, 50% of the respondents reported an increase in export volume after their functioning in SEZs, with a mean of 4.3 (SD = 0.9). Nevertheless, slow regulatory processes were reported as a major issue by 30% of respondents, achieving an average of 2.9 (SD = 1.1) out of 4 on dissatisfaction with governmental processes. In summary, these outcomes indicate that while there has been some improvement in conducting business due to SEZs, regulatory constraints still exist. The Logistics Company Survey analyzed the increasing impacts of SEZs on logistics, transportation, warehousing, customs processes, and supply chain management in general. Of the 15 logistics companies that were queried, 75% (mean = 4.5 [SD = 0.7]) stated that the significant improvements in logistics efficiency were a result of the improved transportation networks and the lower customs clearance times. 65% of the logistics companies, with an average rating of 4.2 (SD = 0.6), indicated a reduction in logistics costs due to SEZ-related infrastructure improvements. Seventy percent of logistics companies confirmed the increased efficiencies in customs procedures (mean = 4.4, SD = 0.8). This finding highlights the importance of Special Economic Zones (SEZs) in facilitating logistics to improve service levels and reduce costs. The Worker Survey dealt with job satisfaction, skills development, and working conditions in the SEZs. The survey of 20 workers showed that 40% were satisfied with their working conditions, mean = 3.8; (SD = 1.0). About 50% of workers reported having opportunities to develop skills (mean = 4.0 (SD = 0.9)), although 40% were dissatisfied with the availability and quality of training programs. In fact, 60% of respondents expressed dissatisfaction with training programs, with a mean rating of 2.5 (SD = 1.1). These findings suggest that SEZs do offer opportunities for skills development but do not provide adequate training and workforce development programs, thus highlighting the level of program gaps. Overall, the descriptive statistics across all groups suggest that SEZs have positively impacted various aspects, including supply chain efficiency, export growth, logistics, and skills development; however, there are a few exceptions related to regulatory delays and inadequate training as well as issues with security and low infrastructure growth. Here is the comparative review of important figures:

Fig. 1: Descriptive Statistics Summary of SEZ Impact.

Business Owner Survey Results

This was the objective of the Business Owner Survey: to evaluate the effect of Special Economic Zones (SEZs) on supply chain efficiency, export growth, and infrastructure improvements. The survey included 15 SEZ business owners who could describe what was gained and lost in the same zone. Sixty percent of business owners said supply chain efficiency had improved, attributing it to better logistical assistance, shorter customs clearance time, and a strengthened road network and warehousing facilities. Impact of SEZs on Supply Chain Efficiency The effect of SEZs on supply chain efficiency Received IT Rating Scale 1 2 3 4 5 Standard deviation Average rating 4.10 ± 0.82 It can be seen from the values of average rating and standard deviation that logistics and operational performances within SEZs were rated with moderate to high satisfaction under IT-based supply chains.

The export volume growth indicates that 50% of businesspersons are exporting a greater volume of goods after establishing their operations in SEZs. Expedited customs, tax reliefs, and improved access to international markets primarily drove this growth. For this factor, the average rating was 4.3 (Mean = 4.3, SD = 0.9), signifying that, at the least, all SEZs have played a role in significantly increasing the inter-national competitiveness of companies within these zones. Still, 30% of respondents have encountered issues from regulatory slowdowns. Red tape and slow-moving approvals, which the process could not withstand, largely caused these delays. Moderate dissatisfaction with the impact of the regulatory framework on supply chain efficiency was reflected in the average rating of the regulatory delay challenges at 2.9 (Mean = 2.9, SD = 1.1).

The vast majority of business owners also saw very positive improvements in infrastructure and logistics, with transport and warehousing being the most significant beneficiaries. But the levels of improve-ments also differed in SEZs, with bigger ones like Mirsarai having further developed infrastructure, some pointed out. Ratings for infrastructure and logistics improvements had some variability depending on the SEZ, with a neutral-to-positive rating (Mean = 4.2, SD = 0.8). Regarding government incentives, 70% of business owners were satisfied with government support in the SEZs, including tax breaks, duty-free imports, and investment subsidies. Such incentives were considered indispensable in the reduction of the cost of operations, thereby enhancing the overall operational viability of the business establishments located in SEZs. A mean rating of 4.5 (Mean = 4.5, SD = 0.7) indicated a high level of satisfaction with the government incentives.

However, the past and the favorable news are a heartening positive story: SEZs have hardly brought about any detrimental impact on business operations, particularly when it comes to supply chain and export performance, infrastructure, and so on but regulatory delays continue to stand in the way of smoother sailing overall, the survey results suggest. Moreover, government incentives that are accessible contribute significantly to the sustainability and growth of businesses within the SEZs.

Fig. 2: Business Owner Survey.

Logistics Company Survey Results

The Logistics Company Survey was designed to assess the factors related to logistics operations influenced by Special Economic Zones (SEZs), which include transportation efficiency, warehousing, customs procedures, and supply chain improvements as a whole. The analysis, conducted in June by ICRIER and supported by the USAID, included responses from 15 logistics firms engaged in operating in or around a special economic zone (SEZ) and identified positive aspects and difficulties related to zones. The remaining subjective factor is the improvement in logistics cost efficiency; among the logistics companies that have benefited from enhanced infrastructure within the SEZs, such as improved road networks, expanded transport facilities, and better access to ports, 75 percent report that this gain was significant. The mean value for the improvement ratio in logistic efficiency was 4.5 (SD = 0.7), which indicates that logistics providers are very satisfied with the logistical operational improvements offered by the use of SEZ. On reducing logistics costs, 65% of logistics enterprises recorded a reduction in the costs associated with logistic psychophysics, which are mostly due to developing transport networks and improving customs clearance procedures. The average score for this item was 4.2 (SD = 0.6), indicating that a fair number of logistics firms are able to realize some cost benefits as a result of the SEZ infrastructure advantage.

We observed that customs operations, particularly in specific SEZ areas, have improved, with 70% of logistics firms reporting "smoother" customs operations. The average rating of customs procedure efficiency was 4.4 (SD = 0.8), meaning that most logistics providers took advantage of lower processing times during imports and exports. Despite the overwhelmingly positive feedback, 40% of logistics companies encounter challenges due to limited transport options, especially congestion near certain SEZs and the absence of transport links between SEZs and major commercial hubs. Mean rating for this challenge was 3.2 (SD = 1.0), indicating transportation infrastructure in some areas is a moderate challenge. Specifically, logistics companies had an overall positive perception of the improvements in road quality, transportation facilities, and warehousing concerning infrastructure upgrades. For infrastructure improvements, the mean rating was y = 4.3 (SD = 0.7), suggesting that the majority of logistics companies regarded the improvements as a major part of overall logistics efficiency within SEZs.

Finally, when it comes to government incentives in SEZs (tax exemptions, subsidies related to logistic activities, and financial support mechanisms), 80% of the logistic companies are highly satisfied with them. The average score for satisfaction with government incentives, measured on a 5-point scale, was 4.6 (SD = 0.5), indicating strong approval for the provision of financial incentives by SEZs to logistics providers. In sum, SEZs have played a significant role in enhancing logistics efficiency, cost reduction, and reducing the burden of customs procedures, even as bottlenecks including congestion and transport limitations persist, as highlighted by the Logistics Company Survey. Moreover, government support is a key enabler in bringing down operational expenses while pushing investments into logistics infrastructure.

Fig. 3: Logistics Company Survey.

Worker Survey Results

The objective of the Worker Survey was to evaluate the implications of Special Economic Zones (SEZs) on workers, including job satisfaction, skill development opportunities, and working conditions within the SEZs. The survey was operational between October 2022 and March 2023, during which all 20 out of 24 SEZ workers who took part in it benefited from the scale. The SEZ scale refers to the workforce dynamics and implications of Special Economic Zones. context tip context tip context tip context tip from retraining context tip scale context tip tool context tip responses context tip use context tip workers scale context partial context tip level context tip early context tip making context tip context tip in a working environment.

Forty percent of workers said they are pleased with their work-life balance, citing job stability and better job security as reasons. Earlier this week we discussed that 60% were unsatisfied with their jobs, mostly due to low wages and lack of opportunity for advance-ment. The mean job satisfaction score was 3.8 (Mean = 3.8, SD = 1.0), on a scale from 1 (very dissatisfied) to 5 (very satisfied), suggesting moderate satisfaction but also considerable potential for improvement, especially regarding compensation and career path. Half of the workers believed that SEZs offered valuable skill development opportunities, especially in manufacturing and skill training. However, 30% of the workers believe that these programs are not sufficiently robust or in line with industry requirements. Mean (M) = 4.0, Standard deviation (SD) = 0.9 The average score (4.0) related to skill development indicates that while opportunities are available for skill enhancement, most workers still believe more specific skill development programs are necessary to progress their careers.

In terms of satisfaction with training, 60% of the workers were not happy with the quality and availability of training programs. Several employees expressed their inability to advance their careers or fully enjoy their jobs in the absence of specific instruction. The mean satisfaction ratings for training programs available in SEZ were 2.5 (Mean = 2.5, SD = 1.1), which highlights a critical gap in providing appropriate training & development opportunities in SEZs. When it comes to work context, the other 40% of the workers were satisfied, mostly concerning safety, environment, and social co-benefits. But laborers complained of poor working conditions, particularly in manual labor sectors. Ratings of working conditions averaged 3.8 (Mean = 3.8, SD = 1.0), which implies that although some workers were satisfied with working conditions, further refinements were needed, particularly in labor-intensive sectors.

Finally, regarding wages and job security, half of the workers reported dissatisfaction with their pay, stating that their wages did not correspond to the effort they invested in their jobs or the cost of living. Another 40% said that the work was not secure within SEZs, citing that their jobs were often stable but subject to abrupt layoffs and an absence of long-term stability. The job security and wages aggregate score was 3.2 on average (Mean = 3.2, SD = 1.2), showing moderate dissatisfaction with compensation and security. Overall, this survey of workers provides a mixed bag of satisfaction levels for those working in SEZs. Despite the benefits of job security and skill development opportunities, we must seriously address low wages, under-training, and poor working conditions to enhance worker satisfaction and contribution in SEZs.

Fig. 4: Worker Survey.

Comparative Analysis Across Groups

Impact of SEZs on Supply Chain Efficiency

Logistics companies reported the highest level of improvement in supply chain efficiency, with three-quarters of respondents saying that SEZs had noticeably improved logistics efficiency. This was largely a result of improved transport technology and simplified customs procedures. For instance, SEZs were scored by the logistics companies as having a high impact on improving supply chain efficiency, with an overall mean of 4.5 (SD=0.7). Business owners cited improved supply chain efficiency as another positive outcome. 60% reported this improvement. The effect of those features was slightly less, however, with a mean score of 4.1 (SD = 0.8). This finding indicates that business owners did indeed receive logistical benefits, but business owners were less likely than logistics companies to credit those benefits simply to SEZs.

Workers, however, were more conservative in the view of the effect of SEZs on supply chain efficiency. Just 40% responded by saying their supply chain efficiency has improved; closing the loop had a mean score of 3.8 (SD = 1.0). The low score for workers is likely due to their focus on conditions and job satisfaction instead of logistics, which may not be as easily perceived at the worker level.

Infrastructure and Logistics Improvements

Logistics companies, business owners, and workers all endorsed SEZ infrastructure improvements across the lane. However, the extent to which each group realized this benefit varied significantly. The logistics firms were the happiest about the infrastructure improve-ments especially transport networks and warehousing facilities. The improvements led to increased cost-effectiveness and minimized logistical delays in routes. Logistics companies rated the installation of improvements to infrastructure with a mean value of 4.3 (Mean = 4.3, SD = 0.7), showing that the infrastructure developments that supported their operation were highly satisfactory.

Fig. 5: Impact of SEZs on Supply Chain Efficiency.

Satisfaction levels among business owners regarding the improvements in infrastructure were also positive; however, their satisfaction was lower when compared with the logistics providers. Business owners perceived that the benefits of infrastructure upgrades - improved roads and access to better warehousing were less obvious and not so directly impacting on their business operations (Mean = 4.2, SD = 0.8). In contrast, workers rated their satisfaction with the infrastructure improvements as indifferent (Mean = 3.8, SD = 1.0). Although workers noted that there had been some improvements in transport and amenities in general, they were most concerned about the quality of working, especially at the more labor-intensive end of the spectrum. Because of these issues, they rated infrastructure relatively low, indicating that they believed improvements unrelated to logistics, like worksite safety and amenities, were lacking.

Challenges Faced by Respondents

The difficulties mentioned by each of these groups regarding Special Economic Zones (SEZs) varied and were aligned with the specific priorities and experiences of business owners, logistics companies, and workers. The issues were mainly about regulatory delays and bureaucratic inefficiencies for business owners. 30% of the business owners deemed these delays to be significant hindrances to the seamless running of their businesses. Dissatisfaction with the regulatory framework and bureaucratic delays that hindered business processes received an average score of 2.9 for regulatory delays (Mean = 2.9, SD = 1.1). The regulatory framework was viewed as one of the major barriers hindering SEZs from operating smoothly and becoming equally responsive to coordination.

Fig. 6: Summary of Infrastructure and Logistics Improvements.

Logistics firms reported issues related to limited transportation availability and traffic jams in several special economic zones. These points, especially at ports and other major transportation nodes, caused delays in goods, as highlighted by the 40% of logistics providers that cited this issue. The mean score for these hurdles was 3.2 (Mean = 3.2, SD = 1.0), indicating moderate levels of dissatisfaction associated with the transport surrounding some SEZs. They were viewed as impediments to operational seamlessness and efficiency, especially in relation to higher-demand route areas. Workers reported low wages, terrible working conditions, and lack of training among the top three grievances. Half of the workers were displeased with their salaries, suggesting that results did not match expectations around wages. The mean satisfaction level for training programs was fairly low (Mean = 2.5, SD = 1.1), and 60% of workers reported dissatisfaction with them. This implies that sufficient development opportunities were not provided alongside appropriate compensation, causing workers in SEZs to be less satisfied with their jobs.

Fig. 7: Summary of Challenges Faced.

Impact of SEZs on Supply Chain Efficiency

The effect of Special Economic Zones (SEZs) on supply chain efficiency was evaluated according to survey responses from business owners, logistics companies, and workers. The results show that, relative to the SEZ absent case, the supply chain process enhanced by SEZ availability is appreciably so, even though those benefits differ among stakeholders. With regard to supply chain efficiency, 60% of business owners said SEZs had a positive impact, and 44% cited improvements in logistics, customs, and infrastructure as the most important factors. This resulted in optimized processes, reduced lead times, and improved integration among suppliers, manufacturers, and customers. We found a mean rating of 4.1 (Mean = 4.1, SD = 0.8) for the impact of SEZs on the efficiency of the supply chain, which indicates moderate to high satisfaction with SEZs. The result indicates that although business owners seem to appreciate the economic advantages provided by SEZs through greater efficiency in logistics, the increases do differ in their extent at the business and SEZ levels.

The improvements were most pronounced in logistics companies, in which 75% reported that supply chain efficiency was improved significantly by SEZs. This was even more so in terms of transportation infrastructure, customs clearance times, and coordina-tion with businesses. Logistics efficiency improvement the group with a mean score of 4.5 (SD = 0.7) was the most productive. This indicates that logistics providers, who were the most direct beneficiaries of SEZs, had an extremely high satisfaction rate due to significant improvements in infrastructure and processes. Supply chain efficiency reported a bit more moderately positive improvement for workers. The survey indicated that just 40% of workers believed that supply chain operations were performing better, partly because many workers have little direct role in logistics. Some supply chain fixes, as many workers have learned, are less evident in their day-to-day toil. Overall, workers rated the efficiency of the supply chain at 3.8 (Mean = 3.8, SD = 1.0). This implies that only business owners and logistics companies benefit directly from logistics and infrastructure improvements, rather less for workers.

Fig. 8: Summary of Impact of SEZs on Supply Chain Efficiency.

Infrastructure and Logistics Improvements

Infrastructure and Logistics Improvements This section considers the role of SEZs in improving logistics and transportation networks and their impact on supply chain efficiency. Survey data from business owners, logistics companies, and workers shows both the progress that has been made and the gaps that remain. About 60% of business owners said infrastruc-ture upgrades in SEZs influenced the way they operated. This also included better access to those ports, better road networks, and improved ware-housing facilities and utilities. The mean rating for improvements in infrastructure and logistics among business owners was 4.2 (Mean = 4.2, SD = 0.8), indicating that although improvements over the years were recognized, they were experienced differently across different SEZs. That variability suggests that while some SEZs have been significantly upgraded, others may still have an infrastructure deficit.

In contrast, there were more logistics firms who were satisfied with infrastructure progress. Three-quarters of logistics firms said they were very satisfied with the improvements, specifically in road conditions, access to ports, and warehouse space. Collectively, these enhancements have led to substantial reductions in lead times and increased the overall efficiency of the functioning of supply chain operations inside the SEZs. The mean rating for infrastructure and logistics improvements among logistics firms was the highest of any of the groups studied at 4.3 (Mean = 4.3, SD = 0.7), indicating an extremely high degree of satis-faction with improvements in transport networks and logistics facilities. The results were more divergent for employees. Workers indicated a 40% satisfaction level with infrastructure improvements, especially those related to transportation access and access to workplace facilities. But workers also reported concerns over working conditions and safety that infrastructure improvements did not improve as much. Infrastructure & Logistics The infrastructure and logistics sectors received a mean rating of 3.8 from workers (Mean = 3.8, SD = 1.0), indicating mixed satisfaction. n. Transportation access seemed to be a bigger hit, but workplace amenities were a sour note in terms of satisfaction.

Table 1: Summary of Infrastructure and Logistics Improvements.

Source: Author's calculation from field survey data, 2025.

Challenges Faced by Respondents

In this section, we take a look at the main issues challenging each stakeholder group (business owners, logistic companies, and workers) when it comes to operating in Special Economic Zones (SEZs). A third (30%) of business owners reported that they had encountered serious trouble as a result of delays with regulation, most notably with obtaining needed approvals and permits. The delays were perceived to be obstacles to operational efficiency, delaying the execution of business plans and supply chain management. Responses to regulatory delays had a mean impact rating of 2.9 (Mean = 2.9, SD = 1.1), signaling moderate concern with bureaucratic inefficiencies that can seriously impact the operations of SEZs.

The situation created a sense of gloom for logistics players due to restricted vehicle access and congestion in certain SEZs. These challenges were highlighted by 40% of logistics providers, particularly regarding port access and road congestion, which ultimately delayed the flow of goods and affected supply chain perfor-mance. The rating for transport-related challenges was the highest (Mean = 3.2, SD = 1.0), indicating that the existing infrastructure modalities and logistical bottlenecks in some of the SEZs still need to be improved to facilitate goods movement in an efficient manner. Conversely, workers struggled with low wages and inadequate access to training. Sixty percent of workers reported that their pay was inconsistent with the amount of responsibility their jobs entailed. They also expressed that they lack opportunities for career growth due to the poor quality of the training programs. Training program satisfaction (Mean = 2.5, SD = 1.1) was rated poorly, indicating dissatisfaction for the quality and access to training that the workers felt curbed their capacity to grow within SEZs.

Table 2: Summary of Challenges Faced by Respondents.

Source: Author's calculation from field survey data, 2025.

Correlation and Regression Analysis

Correlations between SEZ Features and Supply Chain Outcomes

The correlation analysis aimed to test the associations between key SEZ characteristics, such as infrastructure quality, government incentives, and regulatory efficiency, and critical supply chain outcomes like logistics efficiency, export growth, and supply chain performance. Six particularly intriguing and significant correlations emerged that highlight the effect of specific SEZ attributes on supply chain success. The quality of infrastructure was also found to be strongly positively correlated with logistics (r=0.78, p < 0.01) and export growth (r=0.70, p < 0.01). Higher quality infrastructure improves the quality of logistics in SEZs by reducing the costs of moving goods within and outside the SEZ These costs are often linked to the quality of roads, transportation networks, warehousing facilities, and other related infrastructure. Government support was also asso-ciated with business satisfaction (r = 0.65, p < 0.05) and supply chain efficiency (r = 0.67, p < 0.01). This suggests that giving tax waivers, customs drop, and other subsidies to units producing in Special Economic Zones (SEZs) enhances both satisfaction and operational performance in terms of logistics and supply chain. The operational delays were moderately negatively correlated to regulatory efficiency (r = -0.55, p < 0.05), indicating that better regulatory efficiency can result in reduced delays due to customs clearance permits and administrative procedures and better supply chain performance. Regulatory efficiency also significantly correlated with positive business (r = 0.60, p < 0.05), demonstrating that satisfactory business correlates with issuing regulatory streamlining factors within SEZ.

Table 3: Correlations between SEZ Features and Supply Chain Outcomes.

Source: Author's calculation from field survey data, 2025.

Regression Analysis for Predicting Supply Chain Efficiency

The dependent variable is the score on supply chain efficiency in SEZs, while multiple regression is used, and the above three factors become independent variables for the multiple regression model of different levels of significance of supply chain efficiency. Supply chain efficiency was the dependent variable; operational cost reduction, logistics speed, and export growth were the indicators.

Regression Analysis Results Table:

• Infrastructure quality (β = 0.52, p < 0.01) and logistical improvements (β = 0.47, p < 0.01) were the strongest predictors of supply chain efficiency. This means that expenditures geared toward improving either physical assets (e.g., infrastructure) or logistical networks (e.g., transport facilities, warehousing, or customs procedures) can have significant positive effects on the supply chain performance of SEZs.
• Government incentives (β = 0.35, p < 0.05) were also found to have a positive effect on supply chain efficiency. Business activity is facilitated with financial incentives such as tax exemptions, customs reductions, and, in general, better supply chain efficiency by lowering costs and streamlining processes.
• On average, the regression model accounted for 60% of the variance in supply chain efficiency (R² = 0.60), indicating that the three SEZ characteristics combined explain a significant part of the variation in the factors affecting supply chain performance.

Table 4: Regression Model Summary.

Source: Author's calculation from field survey data, 2025.

Thematic Analysis of Qualitative Data

Qualitative data from open-ended survey responses with business owners, logistics companies, and workers were thematically analyzed to identify important themes around stakeholder challenges and their recommendations for change.

Issues Faced By Employees Working In SEZ

A few investigatory themes appeared in relationship to the hardship of laborers and business people in Special Economic Zones (SEZs). These challenges mirror priorities and experiences across the stakeholder groups against the backdrop of regulatory delays and restrictions on transport, low wages, poor conditions, and inadequate training. Nearly 3 out of every 10 business owners who reported business plus regulatory challenges blamed bureaucratic delays in issuing permits and licenses. These delays made running the operations ineffective and complex for supply chain management. Similarly, the cross-border flow of goods was negatively impacted by customs officials' delays, causing alarm among logistics firms. The overall frustration with inefficiencies that arise from regulatory constraints stuck out (Saha et al., 2025).

Another major issue for logistics firms was a lack of little transport alternatives, as 40% mentioned conges-tion and restricted transportation, especially at ports and in warehouses. Logistics personnel, in particular, acknowledged that limited access to transport meant workers found it difficult to arrive at the SEZs and leave with shipments, triggering extra shipping costs. Workers cited low wages and poor working conditions as the main issues. Half of the workers were unhappy with their pay, saying it was not proportional to the effort needed to work in SEZs. Workers also mentioned that low career advancement was due to a lack of training programs. The issue of working conditions, especially in sectors that depend heavily on labor, was widespread as well. 60 percent of workers reported problems with safety standards, ventilation, and overcrowded environments that heightened their risk of illness and injury.

Suggestions for Improvement

The analysis also notes some consistent recommend-ations for reform of the SEZ that emerged from respondents across all groups, related specifically to the challenges of wages, working conditions, oppor-tunities for advancement, and precarious employment. These recommendations suggest significant reforms that SEZs must implement. Both logistics companies and business owners advocated for infrastructure development, which encompassed enhanced transport-ation, increased road accessibility, and expanded warehousing facilities. Such improvements were viewed as necessary for efficiency in the supply chain. Regulatory streamlining was another common theme, with entrepreneurs and logistics providers calling for reducing customs procedures as well as eliminating bureaucratic red tape. These amendments would help remove time lags and enhance seamless operations in the SEZs. 

Table 5: Summary of Key Themes from Thematic Analysis.

Source: Author's calculation from field survey data, 2025.

New programs are important for workers who want higher wages and training programs in line with those industries to gain skills and move up in their careers. Other employees asked for higher wages, more wholesome social safety advantages, and better work situations to ensure day-to-day stability and enjoyment in other endeavors of life.

The research was conducted in accordance with ethical standards, ensuring the values of integrity, honesty, and fairness was upheld throughout the study. Approval for this research was obtained from the Institutional Ethics Committee prior to data collection. All participants provided informed consent, and confidentiality of data was strictly maintained.

I would like to express my deepest gratitude to Almighty Allah for His guidance and strength in completing this research project. The author also extends heartfelt thanks to the participants for their willingness to share their childhood experiences of physical touch and for reflecting on how these shaped their parenting styles.

The author declares that there are no conflicts of interest associated with this research.