Published papers

Multinationals are often required to form joint ventures (JVs) with local firms when entering the host country market. Explicitly taking corporate control into account, we explore the relationship between technology transfer and foreign ownership regulation in the presence of technology spillovers from JVs to local firms. It is shown that foreign ownership regulations may facilitate both technology transfer and spillovers when the multinational has corporate control. Under corporate control by the local partner firm, however, such regulations may hamper technology transfer. © 2009 Economic Society of Australia.

An empirical finding by Trefler (2004, "The Long and Short of the Canada-U.S. Free Trade Agreement", American Economic Review, 94(4), 870-895) and others that industrial productivity increases more strongly in liberalized industries than in nonliberalized industries has been widely accepted as evidence for the Melitz ("The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity", Econometrica, 71, 1695-1725) model. We show that under fairly standard assumptions a multi-industry version of the Melitz model does not predict this relationship. Instead, it predicts the opposite relationship that industrial productivity increases more strongly in nonliberalized industries than in liberalized industries.

This paper studies how exporting and importing firms match based on their capability by investigating the change in such exporter-importer matching during trade liberalization. During the recent liberalization of the Mexico-U.S. textile and apparel trade, exporters and importers often switch their main partners as well as change trade volumes. We develop a many-to-many matching model of exporters and importers where partner switching is the principal margin of adjustment, featuring Beckerian positive assortative matching by capability. Trade liberalization achieves efficient global buyer-supplier matching and improves consumer welfare by inducing systematic partner switching. The data confirm the predicted partner-switching patterns.