Jingcheng Jiang 

Abstract: 

Can anti-corruption enforcement improve allocative efficiency when political connections distort industrial policy? Exploiting China's 2013 anti-corruption inspections as a plausibly exogenous shock to political connections, I show that enforcement reduced subsidies to hometown-connected firms, with effects concentrated on opaquely described allocations while transparent subsidies remained unaffected—revealing that politicians curtail corrupt rather than legitimate transfers when monitoring intensifies. Subsidy reductions operate primarily through behavioral change among continuing politicians rather than elite turnover, as hometown favoritism shifts from career asset to career liability, disrupting clientelistic equilibria. As resources shift from politically connected to more productive firms, regional productivity increases, with gains concentrated among smaller enterprises that had been crowded out by larger firms in politicians' hometowns. These findings demonstrate how strengthened enforcement can restore competitive dynamics by disrupting the quid pro quo arrangements between politicians and firms that generate substantial economic misallocation.

Abstract: What explains the recent surge of automation in China? We argue that the fragility of the migrant labor supply is a primary driver. Exploiting the COVID-19 pandemic as an exogenous shock to internal mobility, we examine whether binding labor scarcity induces directed technical change. Combining household survey, robot installations, and automation patent applications in a difference-in-differences framework, we find that the sudden unavailability of migrant workers triggered a sharp acceleration in capital deepening. Regions with higher pre-pandemic dependence on non-agricultural labor experienced significant growth in robotics and manipulator patents, while total patenting remained unchanged—indicating targeted labor-saving innovation rather than broader R&D expansion. These effects are concentrated in tight labor markets with high migration dependence, a pattern inconsistent with demand shocks, health concerns, or secular trends. Our findings demonstrate that temporary mobility restrictions can generate persistent industrial upgrading by redirecting technological change when labor constraints bind.

Abstract: Standard gravity models predict that proximity fosters trade, yet international relations theory suggests proximity breeds conflict. This paper formalizes the security externality of international trade to resolve this tension. Using data on trade flows, alliances, and disputes, I document a near-rivalry paradox: proximity lowers transport costs but sharply increases conflict probability, creating a tradeoff between efficiency and security. I show that ideological alignment is the critical mechanism unlocking regional integration. Exploiting exogenous leader turnovers that generate sharp shifts in bilateral ideological distance, I find these shocks disproportionately affect trade between proximate pairs. A network formation model rationalizes these findings: proximity amplifies the security risk of trade, generating a commitment problem, while ideological affinity signals peaceful intent, unlocking high returns from low gravity costs. Calibration reveals ideological distance acts as an 8% tariff between rivals, and counterfactuals show ideological fragmentation would sever the most efficient short-distance trade links. 

Abstract: How do intergovernmental fiscal transfers shape local industrial policy and aggregate trade patterns? Exploiting leadership turnover events across Chinese cities, I show that as local politicians accumulate tenure, declining central government transfers force cities to substitute fiscal revenue from land sales for diminishing transfer income, systematically reallocating land from industrial use—which supports tradable production but generates minimal government revenue—to residential development. Event-study reveals fiscal transfers decline 18% and residential land shares rise 10% over a politician's tenure cycle, with industrial land prices converging toward residential levels as fiscal constraints tighten. Iembed this tenure-transfer-reallocation channel in a quantitative spatial model with trade and migration, calibrating to city-level data on land prices, fiscal accounts, and trade flows. The model attributes 30% of China's intercity trade decline and 25% of export contraction between 2002-2018 to fiscal transfer reductions and their induced land market distortions. Counterfactual simulations show stabilizing transfers at early-tenure levels would increase aggregate welfare by 0.8%, with gains concentrated in industrial cities. These findings demonstrate how fiscal decentralization design can inadvertently erode comparative advantage through local public finance constraints, offering new insights into the political economy origins of structural transformation. 

Abstract:  This paper documents heterogeneous effects of agricultural price shocks on child labor and human capital in rural China, driven by crop skill intensity. Using a shift-share design interacting global price fluctuations with baseline local cropping patterns, we classify crops as labor- or skill-intensive via farmer education data. Price increases for labor-intensive crops significantly reduce middle school enrollment and increase child labor, while skill-intensive crop price increases promote higher education. Farm- and individual-level data corroborate these mechanisms via income, land use, and educational spending responses. Our findings show that these price dynamics yield lasting gender disparities in human capital, with crop-specific shocks imposing differential costs on girls' education and benefits for boys. This study illustrates a crucial mechanism through which trade shocks can perpetuate inequality and influence development trajectories.