Research

Publications

Innovation, Firm Size Distribution, and Gains from Trade, with Wen-Tai Hsu and Shin-Kun Peng, 2022, accepted at Theoretical Economics. Full text available here. Earlier version. Online appendix.

The Market Structures in Trade Intermediation with Heterogeneous Manufacturing Firms, with Shin-Kun Peng and Tsung-Sheng Tsai, International Review of Economics and Finance, 75, Sep. 2021, 501-523, DOI: https://doi.org/10.1016/j.iref.2021.04.013.

Learning by Supplying and Competition Threat, with Alireza Naghavi and Shin-Kun Peng, Review of World Economics, 157, Feb. 2021, 121-148, DOI: https://doi.org/10.1007/s10290-020-00386-y.

How Expert are Experts? A Model for Expertise Cultivation, with Tsung-Sheng Tsai, Academia Economic Papers, 44, Sep. 2016, 295-331. Full text available here.

Working Papers

More to come...

Work in Progress

Labor Market Participation, Income Distribution, and Welfare Gains from Trade, with Pao-Li Chang and Wen-Tai Hsu

Abstract This paper studies a household model in which households consume both goods available from the markets and a home good and allocate their time between working and home production. Households differ in their skills and hence income. The household model predicts a monotonic relationship between household labor participation rate and skill/income, and the direction depends on whether the market-good composite and the home good are substitutes or complements. We test the model predictions with Taiwanese household income survey data. The empirical evidence is in support of the theory for the case where the market and home goods are substitutes instead of complements. In contrast to the trade literature, in which most models feature inelastic labor supply, we study the role of the labor-participation mechanism by embedding the household model into the Ricardian trade model of Eaton and Kortum (2002). Our calibrated model suggests that the welfare gains from trade is only 46% of those in the Eaton-Kortum model, showing a strong dampening effect due to this mechanism.

Labor Market Implications of Taiwan's Accession to the WTO: A Dynamic Quantitative Analysis, with Pao-Li Chang, Wen-Tai Hsu, and Xin Yi.

Abstract We study the effects of Taiwan's accession to the WTO in 2002 on the labor market dynamics in Taiwan during 1995-2020. Based on the dynamic hat algebra of Caliendo, Dvorkin and Parro (2019), we modify the framework to allow for differently skilled labor inputs (low, middle, high) and sector-skill dynamic choice by workers. We map the model to the labor-market transition data in Taiwan (based on quasi-longitudinal household surveys), the country-sector-specific skill shares in production, and the bi-lateral trade flows and import tariffs, for 61 economies and 22 sectors for the period 1995-2007. We study the counterfactual dynamics if the bilateral tariffs related to Taiwan's imports and exports were rolled back to their levels in 1995, and calculate the cumulative effects on the employment shares and on the welfare of workers by sector and skill. We find the tariff reductions during this period to explain very much the observed expansion of Taiwan's MCEE and business services sectors in their employment shares, and the growing share of high-skilled workers in Taiwan's labor composition. We also conduct alternative counterfactuals to evaluate the effects of bilateral tariff concessions between Taiwan and China only, China's WTO accession, and combined accessions by both Taiwan and China. We find bilateral tariff concessions to account for the bulk of the effects of Taiwan's WTO accession, illustrating the importance of China to Taiwan in the latter's trade structure.

Rapid Growth of a Regulated, Colonial Industry: the Japanese Camphor Monopoly in Taiwan, with Shao-Yu Jheng