Papers under Review

    -"Destination Institutions, Firm Heterogeneity and Exporter Dynamics: Empirical Evidence from China" (with C. Hu).

    Abstract: Using a panel of Chinese firms, we study the effects of destination institutions and firm productivity on exporter dynamics in a heterogeneous firm setting. We find that quality of destination institutions has a positive effect on probability of entry and survival and that these effects are increasing in firm productivity. In contrast, firms have higher initial sales and faster growth in destinations with weaker institutions and this effect is decreasing in firm productivity. We also find that exporter performances are increasing in firm experience and in the level of foreign ownership whereas the importance of destination institutions is decreasing as firm experience and the level of foreign ownership increase. Lastly, while firms from regions with better institutions enjoy higher probability of entry, initial sales, survival and growth in markets with better institutions; the importance of productivity for exporter performance diminishes as the quality of local institutions improves.

    -"Exchange Rate Movements, Skill Content and Direction of Trade" (with M. Caglayan).

    Abstract: We examine real exchange rate effects on bilateral trade flows considering the skill-content and origin/destination of products. Exports with high-skill content are affected the least from exchange rate fluctuations. Yet, we show that who exports what and where matters. Exports from developing countries are affected by both the level and volatility of exchange rates. Furthermore, while trade flows between developed economies are also affected by exchange rate volatility, exports from developed to developing economies are not. These results hold for most skill-content categories except for high-skill goods. Overall, trade structure and economic development determine exchange rate effects on trade flows.

    -"Effects of Cultural Institutes on Bilateral Trade and FDI Flows: Cultural Diplomacy or Economic Altruism?" (with H. Im).

    Abstract: The number of cultural institutes from major developed and developing countries increased significantly in the last twenty years. In this paper, using cross sectional and panel data analysis on bilateral trade in goods and services, and FDI inflows and outflows, we examine the economic effects of 1,266 cultural institutes from China, France, Germany, Japan, Portugal, Spain, Turkey and the U.K. for the period of 1990-2015. The empirical results suggest that cultural institutes have a significantly trade enhancing effect on bilateral exports and imports of goods and services, and FDI outflows. The effects are stronger for services trade than goods trade, for goods exports than imports, and for FDI outflows than goods exports and imports. However, we do not find any effect of cultural institutes on FDI inflows. We also show that these effects are not homogenous across destinations and are stronger for developing than developed countries.

    -"Institutional Similarity, Firm Heterogeneity and Export Sophistication: Empirical Evidence from China" (with C. Hu).

    Abstract: We study the effects of institutional similarity and firm heterogeneity on export sophistication using a large panel of Chinese firms. We find that firms export more sophisticated products to destinations with more similar institutions. Furthermore, this effect is significantly lower for higher productivity firms. We also show that private, foreign, and joint-venture firms, and firms with lower export orientation are less sensitive to institutional similarity. Likewise, single-product firms and firms that export to more distant markets and have a higher export skewness are less affected by institutional differences. Lastly, the effect of institutional similarity is asymmetric and is weaker when exporting to countries with better institutions.

Work In Progress

  1. "Corporate Tax Competition and Competition for Bilateral FDI Flows" (with C. Rogers and C. Xiao).
  2. "Effects of Structural Adjustment Programs on Skills Upgrading of Exports."
  3. "Growth Effects of South-South FDI Flows" (with S. Lee).
  4. "Institutional Similarity and Export Diversification” (with C. Hu).
  5. "Aid, Spillovers and Growth in Sub Saharan Africa: What does a Sub-National Study Tell Us?" (with Y. Duan).