PUBLICATIONS
"Navigating Geopolitical Risks: How U.S. Firms Adjust Supply Chains Amidst U.S.–China Rivalry''(with Jinyuan Song, Yifan Wei, and Jing Li). Journal of International Business Studies. [Full paper]
Abstract: We investigate how U.S. firms adapt their supply chains in China in response to geopolitical risks from the U.S.–China rivalry. We offer a legitimacy-efficiency balancing perspective to understand firm decisions. We hypothesize that to maintain legitimacy with the home government, U.S. firms in strategic industries are more likely than those in non-strategic industries to align with the U.S. government’s derisking strategy by limiting suppliers in China. However, we expect this tendency to weaken for firms with high economic dependence on China. Analyzing firm-level supplier data from 2009 to 2022, we find that the gap in the number of Chinese suppliers between strategic and non-strategic U.S. firms has widened since 2017 (the first Trump administration). Firms in strategic industries maintain fewer Chinese suppliers, potentially reflecting a more cautious approach. This disparity was initially pronounced only among Republican-leaning firms but later extended to firms across the political spectrum under the Biden administration. The gap diminished among firms with greater reliance on China for revenue or supplies, suggesting that efficiency considerations might temper the inclination to align with national strategies. Thus, U.S. firms might seek to balance political legitimacy at home with the economic benefits derived from China when making supplier decisions.
"China's Low-Productivity Innovation Drive: Evidence from Patents Production'' (with Yuen Yuen Ang, Nan Jia, and Kenneth G. Huang). Comparative Political Studies.
Abstract: Can China catch-up with the United States technologically by mobilizing its bureaucracy and assigning ambitious targets to local governments? We analyzed an original dataset of 4.6 million patents filed in China from 1990 through 2014 and paired this with a new, rigorous measure of patent novelty that approximates the quality of innovation. In 2006, China’s central government launched a national campaign to promote indigenous innovation and introduced bureaucratic targets for patents. Our analysis finds evidence that these targets, combined with political competition, pushed local governments to “game the numbers” by channeling relatively more effort toward boosting non-novel—possibly junk—patents over novel patents. Nationally, this is reflected in a surge of aggregate patents paired with a falling ratio of novel patents. China’s innovation drive is susceptible to manipulation and waste—it is enormous in scale but low in productivity.
"Move to Success? Headquarters Relocation, Political Favoritism, and Corporate Performance" (with Shuo Chen and Xun Yan). Journal of Corporate Finance.
Abstract: This study documents an unexplored corporate rent-seeking phenomenon in non-representative regimes—relocating headquarters (HQ) to the political center. Focusing on China, we find that firms that relocate their HQs to Beijing (the political center) enjoy increased political favors, but those that move to Shanghai or Shenzhen (the country's two main economic centers) do not. Although both groups of movers experience improved profitability, their sustainable growth paths diverge after relocating. Firm productivity and innovation worsen after relocating to Beijing, but improve after moving to Shanghai or Shenzhen. Overall, these findings support the argument that political favoritism benefits firms' profitability but impairs their productivity and innovation.
Please find my current research projects in my CV.