Free Trade Zone Policies and Enterprise Sustainability: Evidence from Investment Efficiency in China

This study employs sample data of Chinese A-share listed companies from 2008 to 2023, takes investment efficiency as a core indicator to measure corporate sustainable development, and adopts the difference-in-differences (DID) model to examine the impact of free trade zone policies on enterprise sustainable development. The research results show that the establishment of FTZs has significantly improved the level of enterprise sustainable development, and this conclusion has passed a series of robustness tests. In the mechanism analysis, the main paths of action include alleviating financing constraints, optimizing internal control, and reducing transaction costs. The heterogeneity analysis finds that there are different regional effects in FTZs, and the policy effects are more obvious in the eastern, western, provincial capital, sub-provincial, and non-coastal areas. This study deepens the understanding of the sustainable impact of FTZs on enterprises, presents how the interaction between institutions and the market promotes the efficiency improvement of different regions, and also provides key suggestions for enterprises to make wise investment decisions by using the policies of FTZs and find a sustainable development path.