Research

Publications

Commercial Arbitration Regime and Sourcing Decision. International Review of Law and Economics (forthcoming)

Abstract: Introducing commercial arbitration into a two-country sourcing model, this paper examines how the quality of commercial arbitration regime affects sourcing decision when production involves a relationship-specific transaction. Arbitration may be invoked when a firm shaves the investment value of a customized intermediate input or does not pay in full for investment. Under the full verifiability of an ex-post investment value by an arbitrator, firm behavior is governed by the quality of arbitration regime, measuring how fully a national arbitration regime supports the enforcement of arbitral awards. I theoretically find that a firm's likelihood of choosing global sourcing over domestic sourcing increases with the source and destination countries' qualities of international arbitration regimes and the source country's quality of general arbitration regime. These impacts are magnified as the production of an intermediate input involves a greater degree of relationship-specific transaction. Results also show that as the production of an intermediate input entails a greater degree of relationship-specific transaction, a firm's likelihood of choosing global sourcing over domestic sourcing decreases  when domestic arbitration offers the better enforcement of arbitral awards compared to international arbitration.


Domestic Formal and Informal Institutions: Their Substitutability and Comparative Advantage.  Review of World Economics, 2023, Vol. 159, No. 4, pp. 853–886.


The Interrelation between Formal and Informal Institutions through International Trade. Review of International Economics, 2021, Vol. 29, No. 5,  pp. 1358–1381. 


Working Papers

Trade Liberalization, Heterogeneous Openness to Change, and Endogenous Skilled Labor Supply.

An Empirical Study on Global Sourcing and Commercial Arbitration Regime


Works in Progress


Value Compatibility and International Migration in Open Economies