Papers in Progress
"State Intervention and Corporate Internationalization: Evidence From Chinese Infrastructure Contractors."
With their rapid internationalization, emerging market firms have become increasingly important players. Contrary to traditional economic theories, political factors, such as state interests, often drive their internationalization process. This paper examines one of the most important cases, China’s infrastructure companies under the Belt and Road Initiative (BRI). I argue that Chinese state has effectively influenced corporate contracting behaviors with its energy-oriented agenda. To test my main hypotheses, I apply both quantitative and qualitative methods. Leveraging an original database that tracks foreign contracted projects of listed infrastructure companies from 2006 to 2016, I conduct panel data analyses and estimate difference-in-difference specifications. The empirical results indicate a significant increase in contracting preferences over energy endowments, accompanied by marginalized economic considerations. Further support comes from a most-different comparison between China Railway Group Limited and Zhejiang Fuchunjiang Hydropower Corporation. These two firms differ in ownership, size, location, and other aspects, but both are influenced by state interventions through multiple channels, including leader visits, party guidelines, and financial incentives. This study contributes to the growing literature about internationalization strategies of emerging market firms, as well as the impacts of China’s state-business interactions on the regional and international political economies.
With David Steinberg. "Does Democracy Promote Business In Developing World? Evidence from Firm Surveys."
The scholarly debate over the effect of regime type on economic growth has been notoriously inconclusive. I argue that pro-development environment is probable when political elites face institutionalized constraints or monopolize political power. On the contrary, their counterparts in hybrid regimes are most likely to prioritize political survival at the expense of economic environment. To test this argument, I propose a firm-centered approach that brings back the micro-level agents connecting political institutions and economic outcomes. Leveraging firm-level responses in developing countries from the World Bank Enterprise Survey (2006-2015), I find that firms express the most negative opinions of the business environment and are least likely to see their sales grow at intermediate levels of democracy. The subsequent survey experiment also shows that firms in developing economies have no inherent preference over democratic or autocratic regimes. Overall, the evidence suggests that regime type does not have the unambiguous effect on the main economic actors that is often posited.
With Ling Chen. "Strategic Taxation in Local China: Evidence from Cities and Firms."
How do political incentives impact tax policies in authoritarian countries? Past works have examined how party politics and electoral cycles influence tax policies in democracies. In authoritarian regimes, where there are few constituent pressures, the political effects of tax policies remain intriguing. In the case of China, we argue that city officials manipulated tax break policies based on career incentives and cadre evaluations. They strategically provided tax breaks for firms in order to attract investment, build visible projects, and promote economic growth. Pairing city official panel data and industrial firm data between 1995 and 2007, we found that the offer of tax incentives fluctuated with the tenure of city mayors, with the greatest likelihood peaking in the middle years of their tenure and declining at the beginning and the final stages of mayors’ tenure. Evidence from a regression discontinuity design indicates that there was a sharp decrease in tax incentives offered by mayors when the starting age of the mayor position approached the age limit for promotion. These different forms of evidence suggest that local officials in China were politically motivated when implementing tax policies. Although rulers are typically revenue maximizers, local level officials have to balance the mandate of extraction with the need to build political achievements, which they do by periodically loosening tax rates based on the timing of their political career.
With their rapid internationalization, emerging market firms have become increasingly important players. Contrary to traditional economic theories, political factors, such as state interests, often drive their internationalization process. This paper examines one of the most important cases, China’s infrastructure companies under the Belt and Road Initiative (BRI). I argue that Chinese state has effectively influenced corporate contracting behaviors with its energy-oriented agenda. To test my main hypotheses, I apply both quantitative and qualitative methods. Leveraging an original database that tracks foreign contracted projects of listed infrastructure companies from 2006 to 2016, I conduct panel data analyses and estimate difference-in-difference specifications. The empirical results indicate a significant increase in contracting preferences over energy endowments, accompanied by marginalized economic considerations. Further support comes from a most-different comparison between China Railway Group Limited and Zhejiang Fuchunjiang Hydropower Corporation. These two firms differ in ownership, size, location, and other aspects, but both are influenced by state interventions through multiple channels, including leader visits, party guidelines, and financial incentives. This study contributes to the growing literature about internationalization strategies of emerging market firms, as well as the impacts of China’s state-business interactions on the regional and international political economies.
With David Steinberg. "Does Democracy Promote Business In Developing World? Evidence from Firm Surveys."
The scholarly debate over the effect of regime type on economic growth has been notoriously inconclusive. I argue that pro-development environment is probable when political elites face institutionalized constraints or monopolize political power. On the contrary, their counterparts in hybrid regimes are most likely to prioritize political survival at the expense of economic environment. To test this argument, I propose a firm-centered approach that brings back the micro-level agents connecting political institutions and economic outcomes. Leveraging firm-level responses in developing countries from the World Bank Enterprise Survey (2006-2015), I find that firms express the most negative opinions of the business environment and are least likely to see their sales grow at intermediate levels of democracy. The subsequent survey experiment also shows that firms in developing economies have no inherent preference over democratic or autocratic regimes. Overall, the evidence suggests that regime type does not have the unambiguous effect on the main economic actors that is often posited.
With Ling Chen. "Strategic Taxation in Local China: Evidence from Cities and Firms."
How do political incentives impact tax policies in authoritarian countries? Past works have examined how party politics and electoral cycles influence tax policies in democracies. In authoritarian regimes, where there are few constituent pressures, the political effects of tax policies remain intriguing. In the case of China, we argue that city officials manipulated tax break policies based on career incentives and cadre evaluations. They strategically provided tax breaks for firms in order to attract investment, build visible projects, and promote economic growth. Pairing city official panel data and industrial firm data between 1995 and 2007, we found that the offer of tax incentives fluctuated with the tenure of city mayors, with the greatest likelihood peaking in the middle years of their tenure and declining at the beginning and the final stages of mayors’ tenure. Evidence from a regression discontinuity design indicates that there was a sharp decrease in tax incentives offered by mayors when the starting age of the mayor position approached the age limit for promotion. These different forms of evidence suggest that local officials in China were politically motivated when implementing tax policies. Although rulers are typically revenue maximizers, local level officials have to balance the mandate of extraction with the need to build political achievements, which they do by periodically loosening tax rates based on the timing of their political career.
Academic Publications
3. Projecting Political Power: China's Changing Maritime Strategy. With Kejin Zhao. Chinese Journal of International Politics 12(2), (2019): 229-261.
2. China's Rise as a Normative Power: Developmentalism in China's Economic Diplomacy, SAIS China Studies Review 4, (2018): 3-14.
1. The Changing System of East Asia and Dynamic East Asian Policy of China. With Caizhen Han. Jiaoxue yu yanjiu (Teaching and Research) 1, (2016): 49-55 (In Chinese).
2. China's Rise as a Normative Power: Developmentalism in China's Economic Diplomacy, SAIS China Studies Review 4, (2018): 3-14.
1. The Changing System of East Asia and Dynamic East Asian Policy of China. With Caizhen Han. Jiaoxue yu yanjiu (Teaching and Research) 1, (2016): 49-55 (In Chinese).
Conference Presentations
Midwest Political Science Association (MPSA) - Annual Meeting (April. 2019), Chicago, IL, U.S.
American Political Science Association (APSA) - Annual Meeting (Aug. 2018), Boston, MA, U.S.
UPenn China and International Relations Graduate Student Workshop (Nov. 2017), Philadelphia, PA, U.S.
International Studies Association - West Annual Conference (Sept. 2017), Pasadena, CA, U.S.
Yousei Conference on the Regional Order in Northeast Asia (May 2016), Seoul, South Korea
Third Asian Political Methodology Conference (Jan. 2016), Beijing, China
Forum for American-Chinese Exchange at Stanford (Apr. 2014), Stanford, CA, U.S.
American Political Science Association (APSA) - Annual Meeting (Aug. 2018), Boston, MA, U.S.
UPenn China and International Relations Graduate Student Workshop (Nov. 2017), Philadelphia, PA, U.S.
International Studies Association - West Annual Conference (Sept. 2017), Pasadena, CA, U.S.
Yousei Conference on the Regional Order in Northeast Asia (May 2016), Seoul, South Korea
Third Asian Political Methodology Conference (Jan. 2016), Beijing, China
Forum for American-Chinese Exchange at Stanford (Apr. 2014), Stanford, CA, U.S.
