Shang-Jin Wei

The National Bureau of Economic Research, Cambridge, Massachusetts, United States

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Publications (168)93.35 Total impact

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    Robert Koopman · Zhi Wang · Shang-Jin Wei
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    Zhi Wang · Shang-Jin Wei · Kunfu Zhu
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    ABSTRACT: The views in the paper are those of the authors and may not reflect the views of the USITC and its Commissioners, the National Bureau of Economic Research, or any other organization that the authors are affiliated with. We thank Peter Dixon for constructive discussions and Ellen Lan Lin and Nikhil Patel for editorial assistance. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2013 by Zhi Wang, Shang-Jin Wei, and Kunfu Zhu. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.
    NBER WORKING PAPER SERIES; 11/2013
  • Qingyuan Du · Shang-Jin Wei
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    ABSTRACT: Motivated by recent empirical work, this paper formalizes a theory of competitive savings - an arms race in household savings for mating competition that is made more fierce by an increase in the male-to-female ratio in the pre-marital cohort. Relative to the empirical work, the theory can clarify a number of important questions: What determines the strength of the savings response by males (or households with a son)? Can women (or households with a daughter) dis-save? What are the conditions under which aggregate savings would go up in response to a higher sex ratio? While the theory can be best tested using data from countries with a sex ratio imbalance, the competitive saving motive is likely to be present and important in all countries.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
    Journal of International Economics 03/2013; 91(2). DOI:10.1016/j.jinteco.2013.09.003 · 1.73 Impact Factor
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    Robert Koopman · Zhi Wang · Shang-Jin Wei
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    ABSTRACT: This paper proposes a framework for gross exports accounting that breaks up a country’s gross exports into various value-added components by source and additional double counted terms. By identifying which parts of the official trade data are double counted and the sources of the double counting, it bridges official trade (in gross value terms) and national accounts statistics (in value added terms). Our parsimonious framework integrates all previous measures of vertical specialization and value-added trade in the literature into a unified framework. To illustrate the potential of such a method, we present a number of applications including re-computing revealed comparative advantages and the magnifying impact of multi-stage production on trade costs.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
    American Economic Review 11/2012; 104(2). DOI:10.1257/aer.104.2.459 · 2.69 Impact Factor
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    Robert Koopman · Zhi Wang · Shang-Jin Wei
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    ABSTRACT: For many questions, it is crucial to know the extent of domestic value added (DVA) in a country's exports, but the computation is more complicated when processing trade is pervasive. We propose a method for computing domestic and foreign contents that allows for processing trade. By applying our framework to Chinese data, we estimate that the share of domestic content in its manufactured exports was about 50% before China's WTO membership, and has risen to nearly 60% since then. There are also interesting variations across sectors. Those sectors that are likely labeled as relatively sophisticated such as electronic devices have particularly low domestic content (about 30% or less).
    Journal of Development Economics 09/2012; 99(1):178–189. DOI:10.1016/j.jdeveco.2011.12.004 · 2.13 Impact Factor
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    Shang-Jin Wei · Xiaobo Zhang · Yin Liu
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    ABSTRACT: While in standard housing economics housing is regarded as an asset and a consumption good, we study in this paper the consequences for housing prices if housing is also a status good. More concretely, if a family’s housing wealth relative to others is an important marker for relative status in the marriage market, then competition for marriage partners might motivate people to pursue a bigger and more expensive house/apartment beyond its direct consumption (and financial investment) value. To test the empirical validity of the hypothesis, we have to overcome the usual difficulty of not being able to observe the intensity of status competition. Our innovation is to explore regional variations in the sex ratio for the pre-marital age cohort across China, which likely has triggered variations in the intensity of competition in the marriage market. The empirical evidence appears to support this hypothesis. We estimate that due to the status good feature of housing, a rise in the sex ratio accounts for 30-48% of the rise in real urban housing prices in China during 2003-2009.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
  • Jennie Bai · Shang-Jin Wei
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    ABSTRACT: When a sovereign faces the risk of debt default, it may be tempted to expropriate the private sector. This may be one reason for why international investment in private companies has to take into account the sovereign risk. But the likelihood of a transfer from the sovereign risk to corporate default risks may be mitigated by legal institutions that provide strong property rights protection. Using a novel credit default swaps dataset covering both government and corporate entities across 30 countries, this paper studies both the average strength of the transfer risks and the role of institutions in mitigating such risks. We find that (1) sovereign risk on average has a statistically and economically significant influence on corporate credit risks. All else equal, a 100 basis points increase in the sovereign CDS spread leads to an increase in corporate CDS spreads by 71 basis points. (2) The sovereign-corporate relation varies across corporations, with state-owned companies exhibiting a stronger relation. (3) However, strong property rights institutions tend to weaken the connection. In contrast, contracting institutions (protection of creditor rights or minority shareholder rights) do not appear to matter much in this context.
    SSRN Electronic Journal 03/2012; DOI:10.2139/ssrn.2024527
  • Jiandong Ju · Kang Shi · Shang-Jin Wei
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    ABSTRACT: Sticky (or slow-adjusting) current accounts are observed for many countries. This paper explores the role of domestic factor market flexibility in understanding the phenomenon. To do so, we consider multiple tradable sectors with different factor intensities and allow substitution between intertemporal trade (current account adjustment) and intra-temporal trade (goods trade) in a dynamic general equilibrium model. An economy’s response to a shock generally involves a combination of a change in the composition of goods trade and a change in the current account. Flexible factor markets reduce the need for the current account to adjust. On the other hand, the more rigid the factor markets, the larger the size of current account adjustment relative to the volume of goods trade, and the slower the speed of adjustment of the current account towards its long-run equilibrium. We present empirical evidence in support of the theory.
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    Hui Tong · Shang-Jin Wei
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    ABSTRACT: How does increasing globalization affect corporate transparency? Freer trade represents different facets and in theory has ambiguous effects on corporate transparency. On the one hand, by exposing firms to more product market competition, it could discourage discretionary disclosure. On the other hand, by opening up foreign markets and enhancing firms’ growth opportunities, it may promote more transparency. Rather than simply estimating a net effect, this paper pursues an approach that allows separate estimation of the two potentially opposing channels. We employ three different measures of corporate transparency and track their evolutions for 4061 firms in 49 countries during 1992-2005. By using detailed product-level tariff schedules for these countries, we construct a measure of growth opportunities enabled by foreign tariff liberalizations at the sector-country-year level, and a second measure of globalization-induced product market competition based on a country’s own tariff liberalization (again at the sector–country-year level). We find strong evidence that higher growth opportunities engendered by globalization promotes corporate transparency, especially in industries that depend heavily on external financing. At the same time, we find somewhat weaker evidence that greater product market competition engendered by globalization discourages corporate transparency. The results demonstrate the importance of disentangling the multiple and potentially conflicting effects of globalization.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
    Journal of International Economics 12/2011; 94(2). DOI:10.1016/j.jinteco.2014.08.004 · 1.73 Impact Factor
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    Robert C. Feenstra · Shang-Jin Wei
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    ABSTRACT: No abstract available.
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    Zhi Wang · Shang-Jin Wei
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    ABSTRACT: No abstract available.
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    Robert C. Feenstra · Shang-Jin Wei
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    ABSTRACT: No abstract available.
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    ABSTRACT: This paper explores how reductions in tari¤s on imported inputs and …nal goods a¤ect …rm productivity by exploiting the special tari¤ treatment that processing …rms apply on imported inputs as opposed to those of non-processing …rms. Highly disaggregated Chinese transaction-level trade data and …rm-level production data from 2000 to 2006 are used to construct …rm-level input and output tari¤s. Careful examination of the extent of …rm engagement in processing trade and in controlling for various sources of endogeneity reveal that less productive …rms choose to engage in processing trade. More importantly, unlike previous …ndings, reductions in output tari¤s have a greater e¤ect on productivity improvement compared with reductions in input tari¤s due, in large part, to the fact that processing trade in China enjoys zero tari¤s on imported inputs.
  • Shang-jin Wei · Chong-en Bai · Roberta Gatti · David Parsley
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    ABSTRACT: Rodrik, Caroline van Rijckeghem, and seminar participants at the World Bank for helpful discussion. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they This paper offers a (possibly) new interpretation of the connection between openness and good governance with a conceptual model and some empirical evidence. Assuming that corruption and bad governance drive out international trade and investment more than domestic trade and investment, the model suggests that a “naturally more open economy”—as determined by its size and geography—would devote more resources to building good institutions and would display lower corruption in equilibrium. In the data, “naturally more open economies ” do exhibit less corruption even after taking into account their levels of development. “Residual openness”—which potentially includes trade policies—is found not to be important once “natural openness ” is accounted for. Moreover, “naturally more open economies ” also tend to pay better civil servant salaries relative to their private sector alternatives—indicative of the marginal benefit of good governance in a society’s revealed preference. These patterns are consistent with the conceptual model
  • Shang-jin Wei · Jeffrey A. Frankel
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    ABSTRACT: Continental trade blocs are emerging in many parts of the world almost in tandem. If trade blocs are required to satisfy the McMillan criterion of not lowering their trade volume with outside countries, they have to engage in a dramatic reduction of trade barriers against nonmember countries. That may not be politically feasible. On the other hand, in a world of simultaneous continental trade blocs, an open regionalism in which trade blocs undertake relatively modest external liberalization can usually produce Pareto improvement. [JEL F15] AS REGIONAL trade agreements proliferate around the world, there is a renewed debate about their welfare implications. Recent studies (e.g., Krugman, 1991a; Bhagwati, 1993; and Frankel, Stein, and Wei, 1995) provide intellectual support for the concern that the current pattern of regionalization is likely to be welfare reducing. There are three important features of the current wave of regionalization. First, almost every country belongs to at least one trade bloc. 1 Second, most * Shang-Jin Wei is Associate Professor of Public Policy, Harvard University. Part of the research for the paper was completed when he was a visiting scholar at the IMF’s Research Department. Jeffrey Frankel is a Member of the U.S. President’s Council of Economic Advisers, and Professor of Economics, University of California, Berkeley. The authors would like to thank Alan Winters and T.N. Srinivasan for helpful comments, Jungshik Kim and Greg Dorchak for efficient research and editorial assistance
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    ABSTRACT: We show the importance of a dynamic aggregation bias in accounting for the PPP puzzle. We prove that the aggregate real exchange rate is persistent because its components have heterogeneous dynamics. Established time series and panel methods fail to control for this. Using Eurostat data, we find that when heterogeneity is taken into account, the estimated persistence of real exchange rates falls dramatically. Its half-life, for instance, may fall to as low as eleven months, significantly below the ‘consensus view ’ of three to five years, summarized in Rogoff [1996].
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    Jeffrey A. Frankel · Shang-jin Wei
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    ABSTRACT: The study of international economic integration- the strengthening of trade and financial links- has acquired a new geographic dimension. Now, we are curious not only about the speed or sequence with which a particular country liberalises trade and financial barriers, but also about whether it chooses to do so preferentially
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    David C. Parsley · Shang-jin Wei
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    ABSTRACT: This paper studies the effect of instrumental and institutional stabilization of exchange rate volatility on the integration of goods markets. Rather than using data on volume of trade, this paper employs a 3-dimensional panel of prices of 95 very disaggregated goods (e.g., light bulbs) in 83 cities around the world during 1990-2000. We find that the impact of an institutional stabilization – currency board or dollarization – promotes market integration far beyond an instrumental stabilization. Among them, long-term currency unions are more effective than more recent currency boards. All have room to improve relative to a U.S. benchmark.
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    Robert Koopman · William Powers · Zhi Wang · Shang-Jin Wei
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    ABSTRACT: This paper presents a new conceptual framework to measure sources of value-added trade by country in global production networks. With a parsimonious decomposition of gross exports that eliminates "double counting", it integrates all previous measures of vertical specialization and value-added trade in the literature. We apply the framework to the most recent appropriate data (2004). Among emerging markets, East Asian countries are the most globally integrated. Among major developed economies, the US is the most integrated in some aspects, and Japan in others. These regional differences also affect exporters’ trade costs.
    SSRN Electronic Journal 10/2011; DOI:10.2139/ssrn.1949669
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    Jiandong Ju · Kang Shi · Shang-Jin Wei
    [Show abstract] [Hide abstract]
    ABSTRACT: Sticky (or slow-adjusting) current accounts are observed in many countries. This paper explores the role of domestic factor market flexibility in understanding the phenomenon. To do so, we consider multiple tradable sectors with different factor intensities and allow substitution between intertemporal trade (current account adjustment) and intra-temporal trade (goods trade) in a dynamic general equilibrium model. An economy’s response to a shock generally involves a combination of a change in the composition of goods trade and a change in the current account. Flexible factor markets reduce the need for the current account to adjust. On the other hand, the more rigid the factor markets, the larger the size of current account adjustment relative to the volume of goods trade, and the slower the speed of adjustment of the current account towards its long-run equilibrium. We present empirical evidence in support of the theory.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
    Journal of International Economics 10/2011; DOI:10.1016/j.jinteco.2013.11.010 · 1.73 Impact Factor

Publication Stats

6k Citations
93.35 Total Impact Points

Institutions

  • 2013
    • The National Bureau of Economic Research
      Cambridge, Massachusetts, United States
  • 2007–2013
    • Columbia University
      • Department of Economics
      New York, New York, United States
  • 1994–2012
    • International Monetary Fund
      • Research
      Washington, Washington, D.C., United States
  • 2011
    • University of Sussex
      Brighton, England, United Kingdom
    • The University of Hong Kong
      Hong Kong, Hong Kong
    • Peking University
      • Center for Economic Research
      Beijing, Beijing Shi, China
  • 2003–2008
    • Tsinghua University
      Peping, Beijing, China
  • 2006
    • WWF United Kingdom
      Londinium, England, United Kingdom
  • 1995–2001
    • Harvard University
      • Department of Economics
      Cambridge, MA, United States
  • 1999
    • University of California, Davis
      Davis, California, United States