Note: I update this page very infrequently.

I work primarily on quantile regression, political economy and development. Below is a sample of my recent publications. More for information, please see my repec page https://ideas.repec.org/f/psi516.html. If you would like a copy of the paper, please drop me an email at nicholas.sim.econ@gmail.com.

"Real Exchange Rate Misalignment and Civil Conflict: Evidence from Sub-Saharan Africa" with Dessie Ambaw (conditionally accepted) Oxford Economic Papers.

The misalignment of the real exchange rate, which is the deviation of the actual real exchange rate from its equilibrium, frequently occurs in developing countries. We show that civil conflict in sub-Saharan Africa may arise when the countries' real exchange rates are more misaligned. Consequently, our study suggests political stability in sub-Saharan Africa can be fostered by stabilizing their real exchange rates. 

“Did Rainfall Shocks Cause Civil Conflict in Sub-Saharan Africa? The Implications of Data Revisions” with Weidong Liang (conditionally accepted) European Journal of Political Economy.

In their seminal paper, Miguel et al. (2004) found that negative rainfall shocks (measured as negative year-on-year rainfall growth) caused civil conflict in sub-Saharan Africa over the 1981-1999 time period. Since then, the rainfall and conflict data they used had undergone multiple revisions. We show that rainfall shocks are statistically insignificant for civil conflict when the revised data are used, which calls into question the contribution of negative rainfall shocks for conflict. 

"Shipping Cost and Development of the LLDCs: Panel Evidence from the Common Correlated Effects Approach" with Ngoc Pham (forthcoming) The World Economy 

We estimate the impact of shipping cost on development for landlocked developing countries (LLDCs) by constructing a novel country-specific measure of shipping cost, called HarpexCost, which is related to the global cost of container shipping. Using the estimated impact of HarpexCost on the LLDCs' development, we recover the actual estimate of the impact of shipping cost. Overall, we observe that shipping cost has large negative effects on the LLDCs. Building upon these results, we provide new estimates on the cost of landlockedness and how trade benefits their development.

"Gender Specific Effects of Exports on Work Decisions in Indonesia" with Tatyana Chesnokova and Jesmin Rupa (forthcoming) Journal of International Trade and Economic Development.

This paper looks at how globalization (as measured by exports) affects women's labor force participation. Here, we propose a novel identification approach, based on what we call exposure exposure index, to estimate the effect of exports that is unconfounded by unobserved household characteristics and macroeconomic shocks. As opposed to common wisdom, we find that exports encourage women to reduce participation in the labor force and increase family work. Using a simple model, we show that if women have a comparative disadvantage in market work relative to men, and if an increase in exports increases the gender wage gap, women's labor participation would be negatively related to an increase in exports as observed.

“Does the Presence of Foreign Firms Reduce Domestic Firms' Financial Constraints in Sub-Saharan Africa?” with Habtamu Tesfaye Edjigu (forthcoming) Journal of African Economies.

Firms in the SSAs (sub-Saharan African countries for short) often faced severe financial constraints. Using firm-level data spanning across 36 SSAs, this paper shows that an increase in the presence of foreign firms can help ease the financial constraints of domestic firms in the SSAs. One reason is that foreign-owned firms are less likely to compete for bank loans as they are less financially constrained. As such, greater foreigner ownership of firms may reduce credit competition, thus benefiting  the domestically owned firms.

“The Effect of Language on Foreign Direct Investment” with Xiaoyun Feng and Faqin Lin (accepted) Oxford Economic Papers.

This paper utilizes language measures from Melitz and Toubal (2014) to estimate a gravity model to examine how various aspects of language may influence bilateral FDI. It finds that FDI flows tend to be higher between countries that share a common official language, have common native languages, or languages that are linguistically proximate. Interesting, while common native language, which indicates ethnic ties and trust, is the strongest predictor of FDI, this association is driven mainly by countries sharing English as the native language but not by countries sharing the same non-English European native languages. 

“Why do the Econometric-Based Studies on the Effect of Warming on Agriculture Disagree? A Meta-Analysis” with Kaixing Huang (2018) Oxford Economic Papers 70: 392–416.

This paper conducts a meta-analysis based on 130 primary econometric-based studies to better understand the conflict among the existing estimates on whether warming has large negative effects on agriculture. It finds that differences in the latitude of the study sample, the temperature measure that was used, and the econometric approach that was applied can explain why the primary studies disagree. It also provides evidence of publication bias where negative effects of warming are more likely to be published than positive effects are. 

“Modeling the Dependence Structures of Financial Assets through the Copula Quantile-on-Quantile Approach” (2016) International Review of Financial Analysis 48: 31-45.

This paper considers a new approach of analyzing asset dependence by estimating how the distributions (in particular, quantiles) of assets are related. To do so, it combines quantile regression and copula, leading to a Copula Quantile-on-Quantile Regression (C-QQR) approach, to estimate the correlation that is associated with the quantiles of asset returns. The C-QQR approach can also be used for analyzing dependence structures in other settings, such as for studying how macroeconomic covariates are nonlinearly related by looking at the relationship between their quantiles. 

“Oil Prices, US Stock Return, and the Dependence Between Their Quantiles” with Hongtao Zhou (2015) Journal of Banking and Finance 55: 1-8.

This paper proposes a novel quantile-on-quantile (QQ) approach to estimate of the effect that quantiles of oil price shocks have on quantiles of the US stock return. This approach can capture nuances in how the distributions of oil price shocks and the US stock return are dependent. For instance, it shows that large, negative oil price shocks (i.e. low oil price shock quantiles) can affect US equities positively when the US market is performing well (i.e. at high US return quantiles). It also shows that while negative oil price shocks could affect the US stock market, the influence of positive oil price shocks is weak, which suggests that the relationship between oil prices on the US equities is asymmetric. 

“Astronomics in Action: The Graduate Earnings Premium and the Dragon Effect in Singapore” (2015) Economic Inquiry 53: 922-39.

This paper investigates the return to university education in Singapore using a new estimation strategy related to Chinese traditions where children born in the Year of the Dragon are believed to be superior. Because parents might time the arrival of their offspring on a Dragon year, this causes the Dragon cohort to be larger and university entry to be more competitive. The paper finds evidence of a negative “Dragon effect” on university educational attainment. Then, using it as an estimation strategy, it shows that university education has a ceteris paribus effect of raising earnings by at least 50% on average. 

“Trade, Income and the Baltic Dry Index” with Faqin Lin (2013) European Economic Review 59: 1–18. 

Estimating the effect of trade on income has been a difficult empirical issue. Focusing on the Least Developed Countries (LDCs) designated by the United Nations, this paper constructs a novel measure of trade cost, based on the Baltic Dry Index (BDI), as an instrument for trade. The BDI reflects the cost of utilizing dry bulk carriers, which are specially designed vessels for transporting primary goods internationally, where these goods dominate the output and export sectors of the LDCs. The paper shows that a 1% expansion in trade raises GDP per capita by approximately 0.5% on average, which is much larger the effects reported in the literature.