Harvard Kennedy School
79 JFK Street
Cambridge, MA 02138
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Harvard University
NBER Working Papers and Publications
|December 2019||The Impact of Intranational Trade Barriers on Exports: Evidence from a Nationwide VAT Rebate Reform in China|
with Jiahua Liu: w26581
It is well known that various forms of non-tariff trade barriers exist within a country. Empirically, it is difficult to measure these barriers as they can take many forms. We take advantage of a nationwide VAT rebate policy reform in China as a natural experiment to identify the existence of these intranational barriers due to local protectionism and study the impact on exports and exporting firms. As a result of shifting tax rebate burden, the reform leads to a greater incentive of the provincial governments to block the domestic flow of non-local goods to local export intermediaries. We develop an open-economy heterogenous firm model that incorporates multiple domestic regions and multiple exporting technologies, including the intermediary sector. Consistent with the model's predictions...
|September 2019||Collective Reputation in Trade: Evidence from the Chinese Dairy Industry|
with Ludovica Gazze, Yukun Wang: w26283
Collective reputation implies an important externality. Among firms trading internationally, quality shocks about one firm’s products could affect the demand of other firms from the same origin country. We study this issue in the context of a large-scale scandal that affected the Chinese dairy industry in 2008. Leveraging rich firm-product level administrative data and official quality inspection reports, we find that the export revenue of contaminated firms dropped by 84% after the scandal, relative to the national industrial trend, and the spillover effect on non-contaminated firms is measured at 64% of the direct effect. Notably, firms deemed innocent by government inspections did not fare any better than noninspected firms. These findings highlight the importance of collective reputati...
|September 2013||Does Economic Growth Reduce Corruption? Theory and Evidence from Vietnam|
with Seema Jayachandran, Edmund J. Malesky, Benjamin A. Olken: w19483
Government corruption is more prevalent in poor countries than in rich countries. This paper uses cross-industry heterogeneity in growth rates within Vietnam to test empirically whether growth leads to lower corruption. We find that it does. We begin by developing a model of government officials' choice of how much bribe money to extract from firms that is based on the notion of inter-regional tax competition, and consider how officials' choices change as the economy grows. We show that economic growth is predicted to decrease the rate of bribe extraction under plausible assumptions, with the benefit to officials of demanding a given share of revenue as bribes outweighed by the increased risk that firms will move elsewhere. This effect is dampened if firms are less mobile. Our empirical an...