Research

• Capability, Consumption, Competition: China's Leapfrogging in Electric Vehicles (Draft coming soon!)

with Ufuk Akcigit, Yong Wang, Lijun Zhu

CICM 2025 Best Paper Award 

Abstract: Over the past two decades, Chinese electric vehicle (EV) firms have transformed from industry laggards into global leaders. This paper documents that this growth is backed by a structured and sequenced development policy framework through three stages: Capability, Consumption, and Competition. To evaluate the mechanisms and welfare consequences, we develop and estimate a two-country, two-technology industry-equilibrium model with directed and step-by-step innovation in both final and intermediate goods, while explicitly incorporating nine primary policy instruments. The results reveal that (i) China’s initial gap to foreign frontier is much smaller in EV technology than in GV technology. This smaller gap reduced the cannibalization costs for incumbents, rationalizing the rapid technological switching; (ii) the sequenced policy package delivers large long-run welfare gains at home and positive global spillovers through consumer surplus and global emissions benefits, despite substantial short-run welfare costs; (iii) the 3C policy stages are both static and dynamic complements. Policy sequencing and timing is critical to long-term effectiveness of development policy.

• Green Growth in Innovation and Production Networks

with Zhe Fu, Zikun Liu, Murtaza Syed, Yong Wang

AIIB Working paper 2026 

Abstract: How does industrial policy shape economic growth and the green transition in an economy characterized by production linkages and knowledge spillovers? Using global patent data, we first empirically document that green technologies generate significantly higher knowledge spillovers than non-green technologies and tend to emerge in sectors central to the economy’s production network. To study the implications of these findings, we develop an endogenous growth framework featuring directed technical change, a multi-sector production network, and an innovation network, while explicitly incorporating an energy sector with fossil fuel and renewable energy sources and resource-specific infrastructure. We analytically characterize the optimal second-best policy and derive policy impacts using sufficient statistic matrices. Calibrating the model to the Chinese economy, we numerically solve for the transition path under both observed and optimal policy regimes. Our results show that: (i) production and innovation networks significantly amplify the impact of green industrial policies; and (ii) shifting to an optimal policy package accelerates both the growth rate and the green transition by reallocating resources toward high-centrality sectors.

• Technology Sanctions and the Mobility of Talents across Firms

with Bocong Liu 

Abstract: Talent mobility serves as a crucial linkage between individual knowledge accumulation and knowledge diffusion between firms. This paper exploit the US technology sanctions to Chinese firms as a quasi-natural experiment to examine the talent mobility across firms, offering a new perspective for understanding the causes of inter-firm talent mobility and its impacts on firm's performances. We construct a novel dataset tracking the employment history of executives in Chinese listed companies to identify inter-firm talent mobility. We employ a shift-share approach to measure the intensity of US technology containment faced by firms. Results reveal that US sanctions drive talent to flow toward firms subject to higher sanction intensity. We further identify technology-seeking motives and supply chain restructuring motives as the primary mechanisms driving this trend.

• The External Multiplier Effect of Foreign Direct Infrastructure Investment 

with Yong Wang, Sifan Xue, Zitong Zhang

Abstract: This paper explores the mechanisms of how public foreign direct infrastructure investment (FDII) affects the home country welfare. We develop a three-country general equilibrium model with FDI and infrastructure compatibility, in which the middle-income country's government makes the investment decision to maximize welfare. Our model shows that investment to infrastructure in South countries could benefit the middle-income country through three channels: crowding in private investment and increasing real income, while this multiplier effects only apply to countries with sufficiently large share of world's production. We extend the baseline model to include trade policies and apply to China's Belt and Road Initiative to quantify the external multiplier effect of outward infrastructure investments.

• Returnees and the Human Capital Origin of China's Rise in Innovation

with Ufuk Akcigit, Linyi Cao, Dongbo Shi, Lijun Zhu

• Transition to Clean Technology in International Competition

with Yong Wang, Shenghao Yu and Lijun Zhu

• Sourcing the Frontier: Supply Chain Sophistication and Innovation Dynamics

• Integration and Coordination in the Development of China’s Electric Vehicle Industry: Mechanisms and Policy Implications

with Yong Wang and Qiyuan Hu

China Economist, Vol.19, No.6, 2024. 

• Looking Ahead on the US Banking Crisis: Causes, Consequences, and Prospects

with Feibiao Xu

Contemporary International Relations, Vol. 33 No. 5  2023.

• Sino-Japanese Cooperation in the Belt and Road Initiative: Motivation and Future Prospect

Contemporary International Relations, Vol. 30, No. 2, 2020.