1.  Exchange Rate Pass-Through and Importers' Credit Constraints: Evidence From China, with Yao Amber Li and Lingfei Lu, 2025 [SSRN][ScienceDirect]

   • Journal of Economic Behavior and Organization 236 (2025): 107044 

   • Abstract:  The impact of exchange rate fluctuations on international trade prices is critical. This paper examines the patterns of exchange rate pass-through (ERPT) among Chinese importers and the role played by credit constraints in shaping the ERPT. Using highly disaggregated firm-product-country-level transaction data from 2000 to 2007, we find that (1) the average level of ERPT into import prices in China is around 73%; (2) for importers in financially more constrained sectors, ERPT tends to be more complete; (3) a higher degree of import sourcing diversity leads to a less complete pass-through and partially offsets the effects of credit constraints. Our findings demonstrate the significance of credit constraints in governing ERPT into import prices. Furthermore, a more diversified import sourcing network can enhance the ability of importers to cope with exchange rate shocks and help alleviate the impact of financial constraints on international trade. 

2. Bilateral Economies of Scope, with Yao Amber Li, Sichuang Xu and Stephen R. Yeaple, 2024 [NBER WP] [slides]

   • Forthcoming at The Review of Economics and Statistics 

   • Abstract: International transactions are costly because they require investments in logistics, contracts, and the acquisition of local institutional knowledge. We posit that a portion of the fixed cost of entering a specific export market can be used toward covering the cost of acquiring imported inputs from that same market, and vice versa. Using dis-aggregated transactions data for Chinese firms from 2000 to 2015, we document firm-level trading patterns suggesting such bilateral economies of scope. Through a structural model, we estimate that the simultaneous export and import in a given country reduce export and import fixed costs by around 42 and 35 percent, respectively. 

1. Two-Way Complementarity: Measurements and Welfare Implications, with Tomohiro Ara, 2026

• Under review

• Abstract: Firms’ export and import participation are positively correlated, a pattern known as two-way complementarity. In this paper, we refine its concept, develop empirical measures, identify its micro-foundations, and explore associated welfare implications. In a general equilibrium trade model with heterogeneous firms, we show that two-way complementarity emerges endogenously from the way trade costs align firms’ joint import and export decisions. We then derive an ACR-style gains-from-trade formula that incorporates this channel. Two-way complementarity amplifies aggregate trade elasticities, leading to smaller inferred welfare gains from a given decline in domestic trade shares after a trade reform. Using Chinese micro data, we document empirical support for the model predictions and find that failing to account for the complementarity overstates China’s gains from WTO accession by around 40%.

2. The Power to Price: Financial Intermediaries and Sovereign Bond Issuance in Emerging Economies, with Haichao Fan, Hao Tang, Huanhuan Wang, 2026

3. The Mechanics of Growing and Maintaining a Supplier Base: Evidence from Chinese Firms, with Yao Amber Li and Stephen R. Yeaple, 2025 [draft] [slides]

   • Presented at: the 2022 AMES (virtual), Tokyo, Japan; the 2022 Asia Pacific Trade Seminars (APTS) (virtual), Tokyo, Japan; the 2021 APTS (virtual), Tokyo, Japan. 

   • Abstract: This paper aims to improve our understanding of the constraints that heterogeneous firms face in expanding and maintaining their supplier base and in responding to unanticipated shocks to this base. Based on highly disaggregated firm-product-country trade data, we analyze the evolution of Chinese firms’ sourcing decisions in the wake of China’s entry into the WTO in 2001 and document three stylized facts using anti-dumping (AD) investigations as unanticipated trade shock. We next build a simple model of firm's sourcing search capacity to explain the observed supplier network adjustment among Chinese firms. To test the model predictions, we examine the impact of China's AD investigations towards other countries' exported goods on Chinese firms' import supplier network decisions (entry and exit of import origin markets, other than the targeted sourcing origins) for both targeted and non-targeted imports. We find that once subject to AD shock, firms are more likely to explore new origins and also more likely to exit existing origins for targeted imports, while they become more sluggish about entry and exit decision for non-targeted imports. Firms show more churning in import sourcing supplier network adjustment in terms of entry and exit for targeted imports, but the opposite pattern obtains for non-targeted imports. Moreover, the importing supplier network response to AD shock presents significant heterogeneity across firms. Combining trade data with firm-level production data, we find that small, less productive firms or firms with smaller supplier base more actively adjust import sourcing supplier network on both targeted and non-targeted imports when facing AD shock, while large, more productive firms or firms with greater supplier base show more modest churning in their sourcing supplier network adjustment. 

4. Breaking the Fences: Patent Purchase and Export Performance of Chinese Firms, 2023 [draft]

1. • Job Market Paper

   • Abstract: The burgeoning export activities of Chinese firms are accompanied by a marked surge in patent purchase across the globe. Using a novel database of firm-level patent transactions, I document several stylized facts regarding the connection between global patent purchase and export performance of Chinese firms. First, China's patent purchase is mainly targeted to the first patent filing in the corresponding patent family, conducted by a small number of Chinese firms, and concentrated in a few origins. Second, firms that select into patent purchase are larger in terms of export value and number of export destinations. Last but not least, the firm's patent purchase from a market is positively correlated with its future export and patent applications across the globe, mainly in the places where purchased patents have related family members. Then I develop a multi-market trade model allowing heterogeneous firms to purchase patents. Patent purchase from any origin could alter the firm's demand across global markets. Through the lens of my model, I structurally estimate the benefits and costs of patent purchase, and provide a quantitative assessment of patent purchase on bilateral trade flows. 

(* presented by co-authors)