Working Papers
"The Effects of China's Accession to the WTO on Nigeria and Other Developing Economies"
I employ a computable general equilibrium (CGE) model to quantitatively examine the impact of China's accession into the WTO on developing economies, with a focus on Nigeria. My framework is a multi-country, multi-sector, Ricardian trade model with sectoral heterogeneity in several dimensions including the trade elasticity. I estimate the key trade elasticities and comparative advantage parameters using a gravity equation with cross country data on trade, tariff rates, and proxies for trade costs. The calibrated model has 29 sectors and 25 countries which includes advanced, middle income and emerging economies. I study the effects of bilateral tariff reductions for Nigeria and China only, as well as for the observed tariff reductions after China's WTO accession. I find that most gains accrue to low income countries. Nigeria's welfare gain is 1.20% but China gains 0.20%, United States gains 0.05% and India gains 1.49%. The primary source of these gains is increased volume of trade.
"The Distributional Impacts of US-China Trade War on Prices and Welfare across U.S. Districts" with Pablo Pinto and Sunny Wong
The question we ask in this paper is what is the distributional impacts of U.S. China trade policy on prices, trade, and real wage across the United States, China, and the rest of the world? We provide evidence on the consumption effects by exploring changes in US and Chinese trade policy between 2017 and 2019. Our empirical analysis uses a universe of sectoral prices, imports, and exports by US Metropolitan Statistical Areas (MSAs) level at monthly frequency and a simple triple differences approach, to identify their effects on treated and untreated products from China as well as the rest of the world, before and after tariff announcements to measure the effects of changes in trade policy on level of imports, exports and consumption. Our triple effect shows a larger negative decline in imports from the rest of the world relative to China with heterogenous effect across industries. Our triple difference coefficient shows a $1, 057,390 increase in imports of affected products from China after the tariff hikes. This implies that although, there is a decline in consumption of imported products, US households and firms’ imports of affected product from China is larger compare to imports from the rest of the rest of the world.
We further employ a theoretical model of trade that has implication for global value chains and industry input-output linkages to quantify the aggregate welfare effects of Trump’s administration trade policy. From a theoretical perspective, US-China trade war affects welfare through higher prices and reduction in variety. Our analysis qualitatively analyzes the effects by voter preferences. Our result suggests a decline in overall welfare across countries.
"A CGE analysis of the impacts of AfCFTA on African countries "
While there is a general optimism about the prospect of AfCFTA to aid socio-economic development in the African region, like any other trade policy, AfCFTA will inevitably create winners and losers globally. This paper employs a multi-sector, multi-country theoretical model of trade, with implications for global value chains to quantify the distributional impacts of AfCFTA on poverty and economic growth. I calibrate a 56 countries and 20 industries version of the model to year 2014 and then conduct simulation exercise of a free trade across African region. I find a positive and heterogeneous effects with most gains accruing to sectors with high imports penetration. This result shows a modest positive welfare gains in machinery, other transport, textile, and metal products as well as textile industries. Lower tariffs on tradable goods led to increase in aggregate prices of financial and insurance services, and relative growth in imports among African countries. The magnitude of these gains vary across sectors, regions, countries and on average larger than the economic contraction created by COVID-19.
Information frictions and Firm Behavior: Evidence from the African continental Free Trade Agreement (AfCFTA) with Socrates Majune and Max Huppertz
How does the level of awareness about AfCFTA trade policy affects firm's decisions on whether to import, export, as well as pricing mechanism? What is the implication of information friction on welfare effects estimate? We explore an experimental survey design method from Kenyan firms to parameterize a theoretical model of trade developed by Melitz. (PEDL Young Scholar Matchmaking Workshop Project)
"Trade liberalization and Firm Productivity: Evidence from Nigeria"
This paper estimates the productivity gains to Nigeria firms from reducing tariffs on final and intermediate goods following China's entry to the WTO in 2001. Lower output tariffs can increase productivity by inducing more import competition, while cheaper imported inputs can raise productivity through learning, adopting international best practice, and the foreign technology embodied in the goods. Methodologically, I follow two steps. First, I use Nigeria firm level data from 1998 to 2003, which includes firm level information on input, output and imported inputs, then I estimate at the firm level, a semi-parametric production function model, from which I extract measures of firms' total factor productivity. I combine the firm survey data with observed tariff rates while accounting for supply chain network. Then, I regress total factor productivity at the firm level on tariffs using a difference in differences strategy. I find that a 10 percentage point fall in input tariffs leads to 0.14\% productivity gains for firms that import their inputs.
"Gains from AfCFTA: Imports versus Exports " (under review Journal of Africa Trade)
This paper examines the gains from Africa Continental Free Trade Agreement (AfCFTA) on 22 Africa countries in a sample that account for global trade across 194 countries and 10 industries. Using Arkolakis, Costinot, and Rodr´ıguez-Clare (2012) quantitative model, I divide sectors into import and export sub-sectors, and countries into Africa trade partners and non-Africa trade partners. Then, I evaluate the effects of trade liberalization on Africa countries caused by the AfCFTA. I find that the gains to import sectors are larger for all Africa countries and larger gains accrues to Africa countries that trade mostly with Africa partners, emphasizing the role of initial import share and global value chains. Gains to exporting sectors are modest for all Africa countries. Moreover, the magnitude of these gains are different across sectors, regions, and countries.
Work in Progress
"Quantifying the Welfare Gains from Trade: a Model with Labor Frictions"
"What do Sub-Saharan Africa Countries Gain from Trade with China?"
Policy Briefs, Articles, & Blogs
The Impacts of COVID-19 on Houston Households: A Tale from Two Surveys
The COVID-19 Pandemic in Austin: Impact, Reaction, and Survival
Carbon Management: Changing Attitudes and an Opportunity for Action