Working Papers Transport Infrastructure, City Productivity Growth and Industry Reallocation: Evidence from China Abstract:This paper examines the impact of highway expansion on aggregate productivity growth and sectoral reallocation between cities in China. To do so, I construct a unique dataset of bilateral transportation costs between Chinese cities, digitized highway network maps, and firm-level census. I first derive and estimate a market access measure for cities in China from 1995 to 2005. I then examine the channels through which the highway infrastructure affected economic outcomes. Highways promoted aggregate productivity growth by facilitating entry of new firms and reallocation among existing firms. I estimate the aggregate economic impact of China's national highway system and find that eliminating all highways in China would decrease aggregate productivity by 3.2%. There is also evidence that the national highway system led to a sectoral reallocation between cities in China.
Cities, Heterogeneous Firms and Productivity(with Jan David Bakker, Alvaro Garcia, Andrei Potlogea and Nico Voigtländer) Abstract: We document a novel stylized fact: Using data for several countries, we show that export activity is disproportionately concentrated in larger cities--even more so than overall economic activity. We account for this fact by marrying elements of international trade and economic geography. We build a model with agglomeration economies where firms with heterogeneous productivity sort across city sizes and select into exporting. The model allows us to study the implications of trade policy for the within-country spatial configuration of economic activity. A central prediction is that within sectors, trade liberalization shifts employment towards larger cities. We structurally estimate the model using data for the universe of Chinese and French manufacturing firms and study the general equilibrium effects of trade liberalization and of urban policies. We find that the effects of these policies are quantitatively different from those predicted by trade models that ignore economic geography, and by economic geography models that omit international trade (both of which are nested in our framework).
Gender Equality: which Policies have the Biggest Bang for the Buck?(with Sonali Jain-Chandra, Kalpana Kochhar, Monique Newiak and Edda Zoli) Abstract: This paper analyzes the relationship between fiscal and structural policies and gender inequality in education and labor force participation for countries at different stages of development. Due to the substantial number of possible factors that link with gender inequality previously highlighted in the literature, we pay particular attention to addressing model uncertainty and using various statistical methods to find the variables with the strongest links to gender gaps. We find that higher public spending on education, better sanitation facilities, low adolescent fertility, and narrower marriage age gaps are significantly related to narrower gender gaps in education. We also find that better infrastructure, a stronger institutional environment, more equal legal rights, and low adolescent fertility rates are strongly associated with higher female labor force participation. When labor market protection is low, an increase in protection is associated with a narrowing of labor force participation gaps between men and women. But when labor market protection levels are high, an increase in protection is associated with a widening in labor force participation gaps.
Machinery Imports and Productivity Growth Abstract: Do firms in developing economies improve their productivity by importing foreign technology? If so, to what extent? In this paper, I examine the effects of machinery importing on firm productivity for Chinese manufacturing firms. To do so, I develop a new algorithm to merge the Chinese firm-level census data with the Chinese Customs data. I first employ a propensity score matching technique to identify the impact of machinery imports on firm productivity. I use an instrumental variable approach to address the endogeneity of importing decisions. Finally, I estimate a simple empirical model to examine the heterogeneous effects and to quantify the aggregate impact of machinery importing. I find that machinery and equipment imports improved firm productivity in China and could potentially generate large gains in aggregate productivity. The results suggest that importing foreign machinery goods is important for technology diffusion.