Research

My research focuses on leveraging general equilibrium trade models and empirical IO methods to estimate and quantify the impact of trade liberalization on consumers, firms, and workers.

Job Market Paper:

Abstract: This paper studies the role of trade liberalization in shaping domestic corruption. I develop a model of trade with heterogeneous firms that features endogenous corruption and export participation decisions. In the model, firms face a trade-off between engaging in corruption, thereby obtaining higher profits in the domestic market, or preserving their non-corrupt status in foreign markets to obtain higher export profits. I predict that in equilibrium there is an inverted U-shaped relationship between firm productivity/size and corruption engagement. This prediction is confirmed in firm-level and aggregate data on international trade. I then calibrate the model to China and evaluate the extent to which trade policy is an effective tool for fighting domestic corruption. My findings suggest that (i) the share of firms that are ``missing from trade'' due to domestic corruption is 1%; (ii) conditional on the same reduction in the level of domestic corruption, trade liberalization is preferable to direct anti-corruption campaigns in terms of the associated gains in consumer welfare.

Working Papers:

Abstract: Internal trade costs are vitally influential on international trade. This paper examines the impact of internal trade costs on firms’ export performance by exploiting variation in firm-to-port distance. To fix ideas, I incorporate internal trade costs as a domestic component of total bilateral trade costs into a canonical model of trade with heterogeneous firms. The model predicts that a firm’s exports to a destination decrease in internal trade costs, conditional on firm productivity, bilateral components of trade costs, and destination-specific market demand. Using a 7-year panel of merged firm-level dataset linking information on production, balance sheets, exports, and geographic locations, I construct a measure of internal trade costs by a weighted average of firm-to-port distance using trade shares by port as weights. By exploiting the within-year and within-year-destination variation in firm-level distance to ports, I identify the impact of internal trade costs on firms’ export values for each year available in the dataset. My findings show that (i) when internal trade costs increase by 10%, on average, firms’ export values decrease by 1.5%; and (ii) the impact of internal trade costs on firm-level exports decreases in magnitude over the dataset time periods.

Abstract: I examine the existence of a reputational channel through which domestic corruption dampens aggregate bilateral trade flows. Specifically, I embed bilateral corruption-aversion parameters into the Armington model of trade. In the model, corruption aversion has a dyad nature in that when the exporting country has less domestic corruption than does the importing country, the importing country perceives the exporting country as one with good reputation, thus exhibiting no corruption aversion to goods from the exporting country. However, when the exporting country has more domestic corruption than does the importing country, the importing country perceives the exporting country as one with bad reputation, thus imposing corruption aversion to goods from the exporting country. I coin the term “Bilateral Corruption Distance” to proxy the bilateral corruption-aversion parameter; such a term is defined as the difference in the Corruption Perceptions Indices between the exporting and importing countries. By combining data on bilateral trade flows, gravity variables, and Corruption Perceptions Index, I estimate a structural gravity equation using PPML estimator with origin- and destination-fixed effects. The orthogonality of the term “Bilateral Corruption Distance” relative to bilateral components of trade costs allows me to separately identify the impact of corruption-aversion parameters from aggregate trade flows. My findings suggest that destination countries impose corruption aversion to goods from exporting countries with more domestic corruption, while destination countries exhibit no corruption aversion to goods from exporting countries with less domestic corruption.


Work in Progress:

Pre-PhD Publications: