Research

Research Papers
Abstract: Empirical evidence shows that corporate income taxation has a significant effect on multinational firms' location and production decisions. In this paper, I develop a quantitative general equilibrium model to examine the channels through which corporate taxes affect multinational production (MP) and international trade. The rich, yet highly tractable, model embeds corporate taxation as a novel friction to trade and MP, in addition to including the common international frictions in existing quantitative MP models. To shed light on the model's implications, I calibrate a three-country version of the model to data on trade, multinational production, and corporate tax rates for Germany, Ireland, and the United States. I compute the Nash equilibrium tax rates and find that Germany and the US would incur larger tax cuts than Ireland. Counterfactual analysis reveals that all three countries would gain from moving to the Nash tax rates but lose if corporate taxation is eliminated. 

  • “Multinational Production and the Skill Premium”
Abstract: Multinational production has been growing dramatically in recent decades. Previous quantitative studies in the literature center on quantifying the aggregate welfare effects of multinational production. In this paper, I examine another important consequence of multinational production, namely, its impact on the within-country wage gap between skilled and unskilled workers. I develop a multi-country general equilibrium framework that is designed to quantify such an effect. The equilibrium outcomes of a two-country example indicate that the model's predictions are consistent with several salient features of multinational production. Counterfactual analysis shows that when moving from autarky to the baseline parameterization, aggregate welfare increases in both countries while the wage gap widens in the rich country and shrinks in the poor country.


Research Paper in Progress
  • “Offshoring, Occupational Switching, and the Skill Premium in South Korea” (with Myunghwan Yoo)