Research

Working Papers

     Best Paper Award for Ph.D. Students, Australasia Meeting of the Econometric Society, 2022     Runner-up for Best Student Paper, China Economist Society Annual Conference, 2022     Finalist for Best Paper Awards, International Network for Economic Research Annual Conference, 2022
Abstract: I develop a two-country endogenous growth model with strategic innovation in domestic and international markets to study how globalization affects uneven firm growth and its implications for industrial concentration and productivity growth in OECD countries. Globalization, characterized by decreasing trade costs and increasing international knowledge spillovers, creates heterogeneous firm responses based on technological distance from competitors. The estimated model predicts that both forces of globalization boost innovation by OECD leaders more than their domestic followers via a market size effect, increasing short-run growth and domestic concentration. However, the induced weaker domestic competition eventually depresses long-run growth: followers and leaders reduce innovation because of discouragement and a diminishing escape-competition motive, respectively.

Abstract: Recent advancements in digitisation and green transition have amplified ICT's (information and communications technology) role in productivity growth. To optimise ICT's potential for future growth, it is crucial to identify and address factors hindering its progress. My study examines the historical disparity in productivity growth between Southern and developed European countries since the ICT revolution. I document Southern European firms, particularly small ones in high ICT intensity and high external financial dependence industries, have experienced lower productivity growth, intangible capital growth, and patent creation compared to their counterparts in more developed European countries. To rationalize these findings, I build a model featuring endogenous firm productivity growth through innovation investment and size-dependent financial frictions. Financial frictions reduce aggregate productivity growth through two channels: innovation investment and misallocation. Quantitatively, the former is the dominant factor. The model also highlights that fast capital and output growth may coexist with slow productivity growth due to firms' tradeoffs in allocating a constrained amount of investment between capital and productivity. 

Abstract: I provide new facts on firm type, innovation quality and innovation frequency in both developed and developing countries. In developed countries, firm type, innovation quality, and innovation frequency are mostly determined at birth. In developing countries, there are fewer innovative and radically innovative firms. Additionally, these firms have lower radical innovation frequency but higher incremental innovation frequency. The cross-country difference is mainly observed in high external financial dependence industries. To explain these facts, I build an endogenous growth model with financial frictions and firm heterogeneity and demonstrate that collateral constraints combined with limited liability conditions impede innovative firm creation and distort firms' choice between radical and incremental innovation in developing countries. I offer new policy implications for countries at different development stages.  
Abstract: Recent studies on the U.S.-China trade dispute suggest that the increases in U.S. import tariffs were fully borne by U.S. importers. However, leveraging firm level data from the U.S. Census, our analysis reveals that the tariff pass-through for firms that continue to import the same product from the same country is rather incomplete, with large importers facing more pass-through and accounting for a larger import share. On the other hand, firms importing a new product or from a different country pay higher prices than those with continuing relationships. Thus, the findings of complete pass-through in recent studies are driven by the import reallocation towards firms that face more pass-through or pay higher prices in new relationships. We introduce a firm-specific import price with two-sided market power into a standard importer model to understand the potential mechanisms behind these findings. We find that larger U.S. importers have more bargaining power and a fixed import cost, independent of firm size, can explain the empirical findings.

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