DIRECTIONS OF THE IMPACT OF FREE ECONOMIC ZONES ON REGIONAL ECONOMIC DEVELOPMENT AND ASSESSMENT INDICATORS

Free Economic Zones (FEZs) are widely used as policy instruments to stimulate regional economic growth, attract foreign and domestic investment, expand export potential, create employment, and accelerate industrial modernization. In developing and transition economies, FEZs are especially important because they can serve as territorial platforms for investment concentration, infrastructure development, technological upgrading, and integration into global value chains. However, the effectiveness of FEZs depends not only on the volume of attracted investment but also on their ability to generate sustainable spillover effects for the surrounding regional economy. This thesis examines the main directions through which FEZs influence regional economic development and proposes a system of assessment indicators for evaluating their performance. The research is based on a qualitative review of international literature, policy reports, and analytical approaches used by international organizations. The study identifies five major impact directions: investment attraction, employment generation, export expansion, infrastructure development, and innovation-based industrial transformation. In addition, the paper highlights the importance of fiscal efficiency, environmental sustainability, local supplier linkages, and institutional governance as complementary evaluation dimensions. The findings suggest that FEZ performance should be assessed through a multidimensional indicator system rather than through single financial or production measures. Key indicators may include total investment volume, foreign direct investment inflows, number of resident enterprises, new jobs created, export volume, share of high-value-added products, tax revenues after incentive periods, infrastructure accessibility, labor productivity, technology transfer, and regional gross value added. A comprehensive evaluation framework enables policymakers to determine whether FEZs contribute to balanced territorial development or remain isolated enclaves with limited regional impact.