Job Market Paper
We construct a dynamic model in which firms with heterogeneous productivity have three strategies to develop their productivity: foreign technology transfer, domestic technology transfer and innovation. Domestic technology transfer interacts with innovation and increase the productivity growth. Chinese firms experienced rising expenditure on domestic technology transfer and innovation from 1998 to 2007 while the distance to frontier of domestic technology distribution decreased. Targeting the moments of empirical productivity distribution and expenditure on technology transfer and innovation, we use Simulated Method of Moments to estimate the transition model of China's economy. The model accounts for 79.8% of productivity growth and 46.4% of relative innovation expenditure. We conduct two counterfactual experiments. In one of the experiments, domestic technology transfer is not allowed, and we find that the domestic technology transfer contributes 30% of productivity growth and 31% of relative innovation expenditure. The other experiment improves the domestic intellectual property by increasing the share of domestic technology payment. The policy changes worse off both productivity growth and expenditure on innovation significantly.
Working Papers
This paper evaluates the global welfare gains from observed levels of immigration using a quantitative endogenous occupational choice and immigration model of the world economy. Our economic geography model features cross-country productivity, human capital, amenity and population differences, international trade, immigration cost, and heterogeneous working and entrepreneurial skills. We compare welfare under baseline parameterization with a immigration autarky counterfactual and the welfare gains of the US native residents from immigration reform. The gains from immigration are substantial, as high as trade gains, and natives in countries that received a lot of immigration are much better off, at about 5% to 15%. Both the native entrepreneurs and workers benefit from immigration while the entrepreneurs tend to gain twice as large as the workers. The welfare of the US native entrepreneurs and workers can increase by 5.1% and 1.6% by optimizing immigration frictions and the population of the US increases by 14.7% under optimization.
Works in Progress
M&A, Innovation and Economic Growth (joint with Kun Hu)
FDI, Foreign Technology Transfer and Firm Innovation