My main research interests are in the areas of international trade and economic development, but I also enjoy working at the intersection of these areas with other fields such as environmental economics, industrial organization and labor economics. So far, my applied work has focused on recent developments in China, where the country’s transition from a closed command economy to an open market economy has provided ample opportunities to study the evolution of markets in a changing policy environment.
I currently have three active research programs related to China. Two of them relate to problems with the provision of credence goods in China's weak regulatory environment. Credence goods are those where consumers value their quality, but are not able to observe their quality directly. One application of this concept is to food safety. Although consumers value safe food, it can be very difficult to tell if food is tainted or spoiled. I have been working on this topic with Peng Liu, a professor in the School of Public Policy at Renmin University. We have recently published an analysis of the regulatory institutions governing food safety in China, emphasizing how the rural-urban enforcement gap increases risk to China's entire food system. We are also working on an empirical project using data collected from media reports to understand what drives inter-provincial differences in food safety.
Another application of the credence good problem is to environmental protection. Consumers are willing to pay more for products produced in a "sustainable" way, but they can't observe the sustainability of firms' production practices directly. I study certification to the ISO 14001 voluntary environmental management standard as a way to solve this problem in China. I show that certification to the standard acts as a signaling device, providing a market-based incentive for firms to adopt "greener" production practices in a setting where environmental regulations are ineffective. I have also done theoretical work demonstrating the connection between certification to voluntary standards like ISO 14001 and participation in export markets. One implication of my model is that lower barriers to trade can encourage certification to voluntary standards. My theoretical work, along with my empirical work in China, suggests that globalization can be "green", even when regulators are tempted to "race to the bottom."
I have also worked extensively on the connection between growth and innovation in China. I have published work with Belton Fleisher demonstrating that China's domestic industries have experienced substantial gains to productivity thanks to investments in intangible knowledge capital, mostly through research and development. We explain this in the context of so-called Schumpeterian growth theory: firms continuously innovate in order to capture economic rents, and this process of continuous innovation drives economic growth. We also use Schumpeterian growth theory to highlight the importance of further institutional reform for China's continued growth. Competition and innovation thrive in a regulatory environment that respects property rights and reduces barriers to entry.
I am also developing a research program focused here in Washington State. I am working on a project to measure local residents' willingness to pay (WTP) for the preservation or restoration of environmental amenities. We are especially interested in the phenomenon of "payment vehicle bias", the tendency for stated WTP to vary depending on how the payment would be collected (e.g. a property tax vs. a utility fee). We believe understanding more about this phenomenon will help bridge the gap between valuation studies and actual policy-making. Understanding residents' preferences over payment vehicles will help policymakers secure strong public support for the provision of a wide range of public goods.