Research

Abstract: Government subsidies can boost firm performance and growth, but political connections, especially those based on shared hometowns, can lead to politician-firm corruption and distorted subsidy distribution. This study examines how government subsidies given to firms in politicians' hometowns are affected by anti-corruption efforts. Using a Difference-in-Differences approach and China's 2013 anti-corruption inspections as the exogenous shock, I find that the inspection reduces subsidies by 22.6% for firms in cities with a native-born leader. Also, a novel measure of hometown favoritism—quantifying leaders born in each city but serving elsewhere—reveals that each additional leader a city produced before the inspection results in a subsequent 2.2% subsidy cut. The back-of-the-envelope calculation suggests that the pre-existing corrupt subsidies linked to city leaders' hometowns are estimated to cost about $2.24 billion, or 0.02% of China's GDP. The anti-corruption inspection decreases vaguely described subsidies, reduces subsidies generated from firms' corrupt spending, and increases government public spending in affected politicians' hometowns. This increase in public spending is likely due to the crowding-out effect of previous corrupt subsidies. Overall, these findings suggest that without anticorruption efforts, the politician-firm quid pro quo can distort the allocation of subsidies.

Abstract: Does labor scarcity induce directed technical change? We exploit the exogenous disruption to internal migration in China during the COVID-19 pandemic to identify the causal link between labor supply shocks and automation. Using a difference-in-differences method combining household microdata with the universe of robot installations and patent applications, we document that regions and sectors historically reliant on migrant labor experienced a sharp increase in capital-labor substitution. This effect was not driven by aggregate demand or general R&D trends; rather, it reflects a directed bias toward labor-saving technologies, including a significant surge in indigenous automation innovation. Consistent with theories of induced innovation, we show that automation responds to binding quantity constraints in tight labor markets. Our findings suggest that transient mobility frictions can trigger permanent industrial upgrading by altering the direction of technological progress.

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.

Abstract: I examine how the tenure of local political leaders affects land markets, fiscal capacity, and economic geography in China. Using a panel dataset linking city politicians to land transactions, fiscal accounts, and trade flows, I document three stylized facts: industrial land is initially priced substantially below residential land by local politicians, but this gap narrows as politicians' tenure lengthens; longer tenure correlates with systematic reallocation of land from industrial to residential use, reducing support for tradable goods production; and central government fiscal transfers decline with political tenure, increasing local governments' dependence on residential land sales revenue. To interpret these findings, I develop a multi-region spatial general equilibrium model with trade and costly migration in which local governments facing tenure-dependent fiscal transfers choose optimal land allocation between industrial and residential uses. Industrial land enhances tradable goods productivity and reduces migration costs, while residential land generates fiscal rents but only supports nontradable production. When calibrated to match city-level data on land prices, land-use shares, and tenure-trade elasticities, the model attributes approximately 30% of observed intercity trade decline and 25% of export contraction to tenure-driven land price convergence and reallocation effects. Counterfactual simulations show that policies stabilizing fiscal transfers or fixing industrial land prices would substantially mitigate these negative effects, increasing aggregate welfare by roughly 0.8%, with gains concentrated in more industrialized cities.