Job Market Candidate
Department of Economics
579 Serra Mall
Stanford, CA 94305
The Local Technology Spillovers of Multinational Firms (Job Market Paper)
This paper identifies the causal impact of U.S. multinationals' technology shocks on their manufacturing subsidiaries and the nearby domestic firms in China. Combining firm-level panel data from both U.S. and China, I match U.S. multinationals to their subsidiaries in China and measure the technology shocks based on the multinationals' patenting activities. I find multinationals' technology shocks improve the output and total factor productivity (TFP) of both their subsidiaries and the domestic firms in the nearby geographic areas. Furthermore, domestic firms' productivity gains mainly attribute to the technology spillovers within-industry and through technological linkages. Last, I study the impact of multinationals' technology shocks on local firms' technology upgrading decisions, and find the shocks stimulate innovation of the more productive firms.
Measuring the Impact of Regulation on Firms (With Constantine Yannelis)
This paper introduces a new measure of firm-level regulation. Contrary to the conventional wisdom,
we find that more regulation increases labor and capital inputs. Productivity decreases, which is
consistent with a model of regulation inducing non-productive investment. We employ two empirical
strategies to identify the causal impact of regulation on firms, first, utilizing structural breaks and industry
level regulation changes, and second, computing predicted industry level regulation measures as
instruments. We conduct an event study using the surprise 2016 US election results. Firms with higher
Dodd-Frank exposure exhibited higher returns following an increase in the probability of repeal.
Does Import Competition Induce R&D Reallocation?
Evidence from the U.S. (With Rui Xu)
We analyse the impact of rising import competition from China on U.S. innovative activities.
Using Compustat data, we find that import competition induces R&D expenditures to
be reallocated towards more productive and more profitable firms within each industry. Such
reallocation effect has the potential to offset the average drop in firm-level R&D identified in
the previous literature. Indeed, our quantitative analysis shows no adverse impact of import
competition on aggregate R&D expenditures. Taking the analysis beyond manufacturing, we
find that import competition has led to reallocation of researchers towards booming service
industries, including business and repairs, personal, and financial services.
Research in Progress|
The Impact of Inequality Shocks on Stock Returns: A News-based Approach
This paper introduces a news-based index of inequality-related economic shocks based on the Newsbank database, which covers about 1500 U.S. newspapers in each year. By computing the percentage of newspaper articles mentioning inequality-related keywords, I construct a daily inequality-related news index. I first document a big increase in the index after the financial crisis in 2008, and several jumps after major policy events. I then investigate the stock market response to the inequality-related news, and find industries with higher average wage levels, larger wage gaps, higher market concentration, and more consumer-focused products are more likely to respond negatively to the inequality news in their stock market returns.