Miaojie yu

• Peking University

How much can a country expand its exports? It could either export more in terms of the quantity of goods (intensive margins), more in terms of the variety of goods (extensive margins) or move to a higher quality of goods (Hummels and Klenow in Am Econ Rev 95:704–723, 2005). The conventional trade theorem predicts that a country will export goods th...

We investigate how trade liberalization affects the performance of Chinese manufacturing firms via sourcing from the South. Taking imports from Indonesia, the largest country in Southeast Asia —China’s current trading partner as an example, we find that Chinese firms with higher import shares from Indonesia perform better in productivity, exports,...

This paper examines distribution-oriented outward FDI using Chinese multinational firm–level data. Distribution outward FDI refers to Chinese parent firms in manufacturing that penetrate foreign markets through wholesale trade affiliates that resell exportable goods. Our estimations correct for rare-events bias and show that distribution FDI are mo...

This paper investigates how input liberalization affects firm import behavior. Using comprehensive production and trade data of Chinese firms, the paper shows that firms switch import sources from developing countries to developed countries as Chinese input tariffs fall. This finding is evident for import value and import scope. The observation hol...

With sluggish external demand and increasing trade protectionism by the USA and the European Union, China is facing severe challenges in implementing its deeper, ongoing reforms. To respond actively to such challenges, the Communist Party of China's 19th National Congress proposed to “promote a new pattern of all‐round opening up.” In particular, t...

During his U.S. presidential campaign Donald Trump threatened China with the imposition of high import tariffs on its exports to the United States. To evaluate the repercussions of such an action, this paper uses Eaton and Kortum's 2002 multi-sector, multi-country general equilibrium model with intersectional linkages to forecast how exports, impor...

This paper evaluates the implication of RMB internationalization on economic integration between China and its partners, especially for Belt and Road countries. We collected data for all bilateral swap agreements between 2000 and 2016, and empirically explored the role of bilateral swap agreements in the bilateral trade flows between China and its...

Using Chinese firm-level production data, this paper developed a Mincer (1974)-type approach to investigate the impact of input trade liberalization on firms' wage inequality between skilled and unskilled workers (or skill premium). When controlling for product-market tariffs in a firm's industry, we find robust evidence that reduced input tariffs...

This paper discusses a novel mechanism—worker training—in relation to the effect of output trade liberalization on firm productivity. Using disaggregated Chinese firm-level production data from 2004 to 2006, we find strong evidence that output trade liberalization boosts firm productivity. More importantly, after controlling for the firm's self-sel...

This paper investigates whether emerging economy multinational enterprises (EMEs) that undertake outward foreign direct investment (OFDI) become more productive, controlling for the self-selection into the global investment market. Particularly, we focus on the moderating effects of firm heterogeneity on the OFDI-productivity nexus. A theoretical f...

How international trade fosters firm innovation is crucial in understanding how economic integration boosts productivity growth. This study uses the Chinese Employer-Employee Survey data set, which contains detailed, firm-level information on exports, imports, and innovation. The study documents several stylized facts characterizing the interaction...

The Chinese Employer-Employee Survey (CEES) is the first dataset that links firm performance with worker heterogeneity in China, and therefore is a precious data resource for various research topics. This note introduces the CEES dataset, as well as seven papers that serve as the initial step in applying the CEES dataset. The topics covered include...

This paper finds that Chinese manufacturing firms that engage in outward foreign direct investment (ODI) have better economic performance than non-ODI manufacturing firms. Overall, ODI firms are more productive and have higher profitability than non-ODI firms. The sector analysis shows that the exceptional performance is significant for labor-inten...

China is currently the third largest country in terms of outward direct investment (ODI), with the investors mainly being state-owned enterprises. This presents a question: What inhibits private enterprises from increasing ODI? Using a firm-level panel data set for Zhejiang Province in China, we examine the impact of firm heterogeneity on private f...

This article finds that the overall effect of the foreign direct investment (FDI) and thereby the China–US bilateral investment treaties (BIT) on Chinese manufacturing sector is positive, which raises the productivity and profitability of the firms, using various econometric models and other evidence. The manufacturing sector as a whole has already...

In this paper we argue that the level of democracy of an applicant matters to its GATT/WTO accession duration. Leaders in democratic states have a greater incentive to join the GATT/WTO than do their non-democratic counterpart. In addition, democratic countries usually have a relatively fair, free, and competitive domestic market which makes them e...

This paper examines the impact of input trade liberalisation on firm R&D activity by taking China's accession to the WTO as a quasi-natural experiment. Different from ordinary imports, processing imports in China enjoy zero tariffs and are not affected by input trade liberalisation due to the WTO accession. The paper uses disaggregated firm-level p...

How do reductions in input trade costs affect firm's sales decision between domestic and foreign markets? By using Chinese firm-level production data and transaction-level trade data during 2000–2006 to construct firm-specific input trade costs, we find rich evidence that a reduction in input trade cost for large trading firms leads to an increase...

This paper takes product complexity into account to study the impact of imported intermediate inputs on firms. Highly disaggregated Chinese transaction-level trade data and firm-level production data from 2002 to 2006 are used to construct firm-level imported intermediate inputs. After controlling for the endogeneity of imported intermediate inputs...

Trade theory has no clear prediction on how import protection affects an importing sector's relative size. In this paper, we estimate the impact of US trade protection on industrial production relative size based on a translog GDP functional system. Using an industrial panel data set and controlling for factor endowments and technology improvement,...

This paper provides a theoretical and empirical analysis of the effects of one-sided tariff cuts on firms' export product scope. The theoretical model explicitly incorporates cost of management in addition to the commonly used production cost. Firms are heterogeneous in terms of managerial efficiency but homogenous in terms of production productivi...

The absorptive capacity of firms developed through R&D promotes learning by exporting. In this paper, we estimate the instantaneous and long‐run productivity effects of exporting on the universe of Chinese manufacturing firms. We find that exporting has very different productivity effects for firms with different pre‐export R&D status. It has large...

This paper investigates how firm innovation reacts to changes in competitive pressure in the export market. We use the exchange rate appreciation of the RMB during 2005-2007 as a natural experiment and exploit its differential impact on Chinese manufacturing firms with different export exposure. The appreciation reduced exports and imposed greater...

This paper investigates how input trade liberalization affects fi…rm-level wage inequality between skilled and unskilled labor. A fall in input tariffs generates increased fi…rm pro…fits, which, in turn, widens wage inequality since skilled labor enjoys a larger proportion of the incremental pro…fits. We analyze this type of channel with an augment...

In 2005, China abated its fixed exchange rate against the U.S. dollar and began to appreciate the Renminbi (RMB). In this paper, I explore the effect of the appreciation of the RMB on imports to the United States from China by augmenting the gravity model with the exchange rate. Using an industrial panel data set during the period 2002–2008 and con...

How do reductions in input trade costs affect firm's sales decision between domestic and foreign markets? Aside from tariffs cut in ordinary imports over time, a large extent of firms engaged in duty-free processing trade also experienced a decline in input trade cost. Accordingly, the imported input tariffs reduction (or exemption) introduces firm...

This paper provides a comprehensive overview of China’s processing trade using highly disaggregated 2010 transaction-level data. By highlighting the key role of processing trade in China’s foreign trade, we argue that various free-trade zones have served as important instruments in boosting processing trade. We then explore various characteristics...

This paper investigates how firm productivity affects firm decision to outward foreign direct investment (FDI) (i.e., extensive margin) and firm-level FDI flow (i.e., intensive margin) using novel firm-level panel data of outward FDI and manufacturing production from Zhejiang province of China from 2006 to 2008. Based on an augmented Olley-Pakes (1...

This paper provides robust empirical evidence that trade liberalization significantly impact corporate financing decisions. Trade liberalization results in changes in tariff schedules in both domestic and foreign markets, which are most likely exogenous to individual firms. Our empirical strategy exploits this exogenous shock to identify the effect...

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 t...

The firm level trade literature finds exporters are exceptional performers for a wide range of countries and measures. Paradoxically, the one documented exception is the world’s largest trader, China. We show that this puzzling finding is entirely driven by the presence of firms that engage in export processing – the activity of assembling tariff e...

Demographic structure has both the scale effect and the structural effect on bilateral trade. The "scale effect" refers that a low dependency ratio of exporter can produce and export more. Similarly, importer's low dependency ratio can induce more income and hence import more. The "structural effect" indicates that a change of exporter's dependency...

This paper explores how reductions in tariffs on imported inputs and final goods affect firm productivity by exploiting the special tariff treatment that processing firms apply on imported inputs as opposed to those of non-processing firms. Highly disaggregated Chinese transaction-level trade data and firm-level production data from 2000 to 2006 ar...

This paper investigates the impact of trade liberalization on firm productivity by using both Chinese manufacturing firm-level data and highly disaggregated Chinese import data from 1998-2002. We construct a measure of firms’ total factor productivity (TFP) by adopting an augmented Olley-Pakes (1996) semi-parametric methodology to correct the simul...

The paper first analyzes the pattern of trade for China and India in the new century. We find that: (1) Both countries have high openness ratios that positively associated with their growing labor productivity over years. (2) China’s world export share keeps increasing whereas India maintains a stable but relatively small world exporting share in t...

This paper measures the current energy market integration (EMI) in the East Asia 16 countries including the ASEAN 10 countries, China, Japan, Korea, India, Australia, and New Zealand by using the principal component analysis (PCA) approach. The comprehensive EMI index has four important components: (1) energy trade liberalization; (2) energy infras...

This paper first investigates the pattern of trade and industrial productivity in the ASEAN, China, and India (ACI). By using highly disaggregated COMTRADE data during 1998-2008, I find that the ACI countries exhibit significant productivity growth in manufacturing sectors. Both international trade and intra-region trade in the ACI countries increa...

This paper examines why credit constraints for domestic and exporting firms arise in a setting where banks do not observe firms' productivities. To maintain incentive-compatibility, banks lend below the amount needed for first-best production. The longer time needed for export shipments induces a tighter credit constraint on exporters than on purel...

The ongoing upgrading of value chain in China's manufacturing leads China toward a middle-income country. The paper first examines the performance and technological upgrading between and within China's manufacturing since 1978. By using the highly disaggregated trade data and Chinese firm-level production data, I find that, with the increasing leve...

Does entry into the export market enhance firms’ productivity? In this paper, we estimate the instantaneous and long-run effects of exporting on the productivity of Chinese manufacturing firms during 2001 and 2007. We argue that pre-export R&D plays a crucial role in generating post-entry productivity gains by increasing firms’ absorptive capacity....

This paper explores how processing trade, jointly with tariff reduction, can improve a firm's productivity. Tariff reductions generate productivity gain via competition, whereas processing export does so via spillovers. Using mostly disaggregated Chinese product-level trade data and firm-level production data from 2000--2006, after constructing fir...

In 2005, China abated its fixed exchange rate against the U.S. dollar and began to appreciate the Renminbi (RMB). In this paper, I explore the effect of the appreciation of the RMB on imports to the U.S. from China by augmenting the gravity model with the exchange rate. Using an industrial panel data set during the period 2002 to 2008 and controlli...

Does democracy affect trade? There are several channels by which democracy may affect trade, with differing implications. First, democratization in the exporting country can improve product quality and reduce trade costs, increasing bilateral trade. Second, democratization in the importing country may increase trade barriers and thus reduce imports...

Recent models of trade with heterogeneous …rms argue that a …rm's productivity has a signi…cant e¤ect on the …rm's exports. This paper examines how a …rm's credit constraints, jointly with its productivity, a¤ect its export decisions. We embed the …rm's credit constraints into a Melitz-type general-equilibrium model by making the probability of the...

The literature had paid little attention to the endogenous nexus between exchange rates and bilateral trade. In this paper, I use a gravity model to investigate the two-way causality between exchange rates and bilateral trade with data from China, Japan, and the United States during the 2002–2007 period. After controlling for the simultaneous bias...

In this article, I estimate the impact of the Democratic tariff platform on its electoral outcome using congressional district data on election to the House of Representatives from the years 1982 to 1994. I control for many other financial, historical, and social factors that could affect the voting outcome. Aside from this, I also address the endo...

] In this paper we argue that the export-oriented growth model in China is an unavoidable choice for China given its demographics and low level of urbanization. Low dependency ratio and low urbanization rate jointly determine a large amount of supply of labor and a slow growth of labor income, which in turn leads to fast accumulation of capital and...

August 25, 2009 Recent Melitz-type (2003) intra-industry heterogonous trade models argue that a firm's productivity has significant effects on the firm's exports. This paper examines how a firm's credit constraints as well as its productivity affect its export decisions. We imbed the firm's credit constraints into a Melitz-type general-equilibrium...

China has experienced dramatic trade liberalization since the late 1990s. In this paper, I investigate the impact of trade liberalization on …rm productivity by using both Chinese manufacturing …rm-level data and highly disaggregated Chinese import data from 1998-2002. For this purpose, a …rm's total factor productivity (TFP) was calculated by adop...

China has experienced dramatic trade liberalization in the late 1990s. In this paper, I investigate the impact of trade liberalization on firm productivity by using both Chinese manufacturing firm-level data and highly disaggregated Chinese import data over 1998-2002. For this purpose, I first calculate firm's total factor productivity (TFP) by ado...

Recent studies have suggested that accession to GATT/WTO is a complex, difficult, and lengthy process, and such process has lengthened in recent years. Using survival analysis, we find that the applicant's political regime has a significant impact on the time it takes to accede to GATT/WTO. In particular, the accession duration is likely shorter fo...

The Sah-Stiglitz "Economics of Price Scissors' model, concerning the political economy of price scissors, formulates the optimal terms of trade against peasants. In the present paper, by extending this model to an open economy and allowing agricultural rationing, we first check if the model stands up to China's data from 1949-1992, we find that the...

Trade theory has no clear prediction on how import protection affects an importing sector's relative size. In this paper, we estimate the impact of U.S. trade protection on industrial production relative size based on a translog GDP functional system. Using an industrial panel data set and controlling for factor endowments and technology improvemen...

This paper investigates a basic question about the international political economy—why is international trade not free? To answer this question, we modified Grossman and Helpman (1994) by considering that interest lobbies make political contributions to both the incumbent government and the political challenger in order to influence the incumbent g...

In the last thirty years, China has undergone three stages of corporate governance mechanisms, namely, (1) the “power-delegating and profit-sharing” system; (2) the “contracted managerial responsibility” system; and (3) the corporatization of large stateowned enterprises (SOEs). This paper will explore each mechanism, their advantages and disadvant...

Previous studies have recognized that campaign contributions and lobbies affect trade policy. However, whether or not trade policy affects electoral outcome is far less discussed. This paper thus introduces a theoretical framework to explain how trade platform could affect the vote pattern. Motivated by this, we then estimate such an effect using e...

In this study, we show that the unique Nash equilibrium of a political competition model between two parties in a Heckscher-Ohlin setting entails differentiated trade politics, with one party proposing a high tariff, and the other, a low one. The basic departure from a median voter model is the introduction of campaign contributions which influence...

This paper provides evidence on an amended Mayer-Heckscher-Ohlin model with parties by studying the effects of U.S. tariffs on the Democratic vote share. The effects are estimated with fixed effects and Two-Stage Least Squares based on data from the House of Representatives from the years 1982 to 2000. Weighted trade policy proxy for each congressi...

] We show that the unique Nash equilibrium of a model of political competition between two parties in a Heckscher-Ohlin setting entails differentiated trade policies, with a party proposing a high tariff, and the other one a low one. The basic departure from a median voter model is the introduction of campaign contributions, which influence the vot...

This paper is an empirical investigation on the relationship between trade globalization and political liberalization. The sample is based on 157 countries from years 1957-1998, taking into consideration many social, economic, environmental, geographical, and historical factors. From this, an augmented gravity equation is estimated and evidence is...

] This empirical paper investigates the relationship between political competition and the tariff level. In the U.S., greater labor union percentage is more likely to result in election of labor friendly democrat politicians, and is also likely to effectively lobby for protection. This predicts that there is a positive correlation between trade pol...

By introducing a hierarchic government structure into Grossman and Helpman (1994, 1996), I construct a theoretical model to explain why two developing economies with similar economic fundamentals might have diametrically di¤erent amount of inward FDI as a means of technology adoption. The key mechanism is that the provincial government's attitude t...

(Abstract) China's trade volume has grown substantially during the last three decades. Simultaneously, its institutional quality has also improved at a slow yet stable pace. This subsequent improvement in China's institutional quality can improve product quality and reduce trade costs. Consequently, these are seen to encourage bilateral trade. More...

This paper analyzes and compares the trade pattern of China and India since 2000 and reviews the results in the context of the respective national development strategies. Our findings include: (1) Both countries have high openness ratios positively associated with growing labor productivity over the years; (2) China's world export share continues t...

Nomadic conquests have helped to shape world history, yet we know little about why they occurred. Using climate and dynastic data from historical China since 221 BCE, this study finds that the likelihood of nomadic conquest increased with less rainfall proxied by drought disasters, which drove pastoral nomads to attack agrarian Chinese for survival...

Degree granted in Economics. Thesis (Ph. D.)--University of California, Davis, 2005.