My research statement is here.

Working papers


This paper introduces commercial arbitration into a two-country sourcing model and analyzes the effect of the quality of commercial arbitration regimes on relative global sourcing. Each country's final good producers source a customized intermediate input domestically or globally. Commercial arbitration may be invoked when parties shave investment quality and do not pay in full for investments. Under the full verifiability of investments by arbitrators, how fully national arbitration regimes support arbitral awards governs firms' ex-ante behaviors. I theoretically find that relative global sourcing rises with each country's quality of international commercial arbitration regimes. It, conversely, falls with each country's quality of domestic arbitration regimes and the degree of requiring relationship-specific transactions to produce the intermediate input. I empirically explore these predictions using my measures for national arbitration regimes and relationship-specificity intensity.

2. The Causal Effect of Institutional Comparative Advantage on the Quality of Institutions

This paper provides new empirical evidence of the positive causal effect of institutional comparative advantage on the quality of institutions. My cross-sectional analysis uses a novel measure I construct for country-level institutional comparative advantage using the revealed comparative advantage index. To show the causal relationship, variation in countries' population densities averaged over the past 30 years is utilized to provide exogenous variation in institutional comparative advantage between the countries. According to the instrumental variable estimation results, a 1 percent rise in institutional comparative advantage contributes to at least a 0.12-0.22 percent increase in institutional quality.

3. The Interrelation between Formal and Informal Institutions through International Trade

This paper develops a two-country, two-sector, two-factor model in which formal institutions endogenously arise based on exogenously endowed informal institutions. In the model, formal and informal institutions substitute for one another in generating institutional quality, expressed as a CES aggregate form of the two institutions. Institutional quality governs the productivity of the institutionally intensive sector and the trade cost coming from imperfect contract enforcement. General equilibrium results show that in open economies, formal institutions tend to increase with informal institutions through improving institutional comparative advantage and lowering the trade cost. This creates a contrast in that formal institutions fall with informal institutions under autarky. These results reveal a new role of trade as a catalyst in developing formal institutions in a country with rich informal institutions.