Open Journal of Social Sciences, 2017, 5, 73-91 http://www.scirp.org/journal/jss ISSN Online: 2327-5960 ISSN Print: 2327-5952 DOI: 10.4236/jss.2017.59006 Sep. 6, 2017 73 Open Journal of Social Sciences Shanghai Pilot Free Trade Zone and Its Effect on Economic Growth: A Counter-Factual Approach * Dechun Huang, Vu Thi Van # , Md. Ekram Hossain, Zhengqi He Business School, Hohai University, Jiangning, China Abstract Together with the deepening of globalization and economic integration, trade and investment liberalization has played more important role in economic cooperation. Besides the free trade agreements among member countries, free trade zone is also considered to establish a favorable environment in order to attract foreign investment and promote economic growth of the areas laying inside and outside the zone. On the basis of economic reforming and trade li- beralization initiative, China approved the establishment of Shanghai Pilot free trade zone on September 29th, 2013. The Shanghai Pilot free trade zone is the experiment area of the whole country’s national economic transition process. For the first time, many new policies and management mode were adopted in this area to examine their performance and usability. This study aims to analyze the policy’s effect of Shanghai pilot free trade zone on Shang- hai economic growth. By using counter-factual method, the study compares the difference of Shanghai GDP in counter-factual scenario from the actual scenario and figures out the policy effect with the existence of the free trade zone. Therefore, the finding emphasizes the strong effect of Shanghai free trade zone on its economic growth. Understanding the economic effect of Shanghai pilot free trade zone is necessary to further up investment and trade liberalization in China. Keywords Shanghai Pilot Free Trade Zone, Policy’s Effects, Economic Growth, Counter-Factual Analysis *Jiangsu Research Planning Project for Philosophy and Social Science: Study on Strengthening Connection Cooperation with Shanghai Free Trade Zone of Jiangsu Province (14ZB028). How to cite this paper: Huang, D.C., Van, V.T., Hossain, Md.E. and He, Z.Q. (2017) Shanghai Pilot Free Trade Zone and Its Effect on Economic Growth: A Coun- ter-Factual Approach. Open Journal of Social Sciences, 5, 73-91. https://doi.org/10.4236/jss.2017.59006 Received: August 1, 2017 Accepted: September 3, 2017 Published: September 6, 2017 Copyright © 2017 by authors and Scientific Research Publishing Inc. This work is licensed under the Creative Commons Attribution International License (CC BY 4.0). http://creativecommons.org/licenses/by/4.0/ Open Access