Research

Publications 

• Elite capture or exclusion? Insights from China's targeted poverty alleviation strategy, with Jie Tang and Xia Li, Scottish Journal of Political Economy (2026) e70027. Presentations: 98th WEAI  Annual Conference 2023.

• Local protectionism and firms' ESG choices: Evidence from the judicial independence reform, with Jiayin Li and Keyi Zhao, Scottish Journal of Political Economy (2025) e70042. Presentations: SUFE workshop 2023.

• The impact of fiscal inequality on economic growth: Evidence from shifts in China's fiscal system, FinanzArchiv/European Journal of Public Finance  80.4 (2024): 1-27. Preprint Presentations: 76th IIPF Virtual Conference 2020 and Dissertation Seminar 2021 at Graduate Center, CUNY.

• Local fiscal competition and deficits in China, with Timothy J. Goodspeed, International Tax and Public Finance (2024): 1-16. Preprint Presentations: 57th MVEA Virtual Conference 2020, 96th WEAI Annual Conference 2021, 77th Annual Congress of the IIPF 2021, Dissertation Seminar 2021 at Graduate Center, CUNY, 91st SEA Annual Conference 2021, and 79th Annual Congress of the IIPF 2023.

• Carbon emissions from the perspective of regional competition: Evidence from China’s low-carbon city policy, with Meng-Ting Chen and Shiyan Zhang, The Annals of Regional Science (2024): 1-25. Preprint

• Political hierarchy spillovers: Evidence from China, with Meng-Ting Chen, Economic Inquiry 62.1 (2024): 329-348. Preprint  Presentations: 96th WEAI Virtual International Conference 2021, 85th MEA Annual Conference 2021, the 100 Years of Economic Development Conference 2022,  WRSA’s 62nd Annual Meeting 2023, and AAG 2023 Annual Meeting. 

• The effect of population aging on pension enforcement: Do firms bear the burden?, with Renjie Zhao, Economic Inquiry 60.4 (2022), 1644-1662. Preprint

• Effect of public expenditure on fertility intention to have a second child or more: Evidence from China's CGSS survey data, with Jie Tang and Xia Li, Cities 128 (2022): 103812. Preprint

• Rent-tax substitution and its impact on firms: Evidence from housing purchase limits policy in China, with Renjie Zhao, Regional Science and Urban Economics 96 (2022): 103804. Preprint Presentations: 15th Economics Graduate Student Conference (EGSC) 2020 and 90th SEA  Annual Conference 2020. 

• Local judicial system reform and corporate investment: Evidence from unified management of local courts below the province,  with Renjie Zhao, China Economic Quarterly International, 2.4 (2022): 290-303. 

Working Papers

How Does Land Use Policy Affect Local Labor and Housing Markets? with Meng-Ting Chen  (under review, PDF)

Presentations (including scheduled):  IEAS Research Workshop (Academia Sinica, Taiwan) 2022, Soochow University Seminar (Taiwan) 2022, 98th WEAI  Annual Conference 2023, Soochow University Seminar (Suzhou) 2023, Hehai University Seminar 2023, University of New Mexico Seminar 2023, National Sun Yat-sen University Seminar (Taiwan) 2023, WRSA’s 63rd Annual Meeting 2024, New Mexico Tech Research Colloquium 2024, AAG 2024 Annual Meeting, National Central University (Taiwan) 2024, Renmin University of China Seminar in 2024, Shandong University Seminar 2024, Northwest University of Political Science and Law Seminar 2024, Northwest University Seminar 2024, SMU-Jinan Conference on Urban and Regional Economics 2024,  CES NA conference 2026, 10th Urbanization and Development Conference 2026. 

Amid China’s rapid urbanization, local governments face the challenge of allocating scarce land to balance development and housing affordability. Using sensitivity instruments that interact city responsiveness with provincial land policies, we identify causal effects of land-use allocation. A 10-percentage-point increase in productive land share reduces unemployment by 0.66 percentage points but raises housing prices by 4.63 percent, worsening affordability. To interpret mechanisms and welfare impacts, we develop a spatial equilibrium model with labor market frictions, housing development with land constraints, and local public finance. Calibrated to the Chinese urban system, the model shows that such a shift lowers average welfare by 0.46 percent, as higher housing costs outweigh wage and employment gains. Counterfactual analyses under three governance regimes reveal that political distortions dominate spatial externalities in generating inefficiency. Inverting the model uncovers heterogeneous political weights across three city types, highlighting the trade-off between growth and affordability and pointing to reforms that realign local incentives with welfare.

Shifting Employment and Investment Structures Towards Environmental Sustainability with Meng-Ting Chen, Juin-Jen Chang, Jhy-Yuan Shieh, and Jhy-Hwa Chen (under review, paper) 

Presentations (including scheduled):  the IEAS Research Workshop (Academia Sinica, Taiwan) 2024, Soochow University Seminar (Taiwan) 2024, and WRSA’s 64th Annual Meeting 2025.

This paper examines the labor market and investment effects of China's Environmental Protection Tax (EPT) reform, focusing on the reallocation of employment and market share between heavy-polluting and non-heavy-polluting industries. Empirical results show that the EPT reform significantly reduces employment in heavy-polluting industries while moderately increasing aggregate employment. Moreover, the reform drives green investment primarily in non-heavy-polluting industries. To complement these findings, we develop a structural model that quantifies employment reallocation and green investment dynamics before and after the reform. The model reveals that higher labor substitutability and consumer responsiveness to environmental policies enhance the positive employment effects while moderating the decline in welfare. These results offer valuable policy insights for economies seeking to balance environmental governance with sustainable economic development.

Policy Credibility and Expectation-Driven Housing Demand: Evidence from China’s Housing Purchase Restrictions with Meng-Ting Chen  (under review, PDF)

Presentations (including scheduled):  100th WEAI Annual Conference 2025, the ODU real estate research symposium 2025, WRSA’s 65th Annual Meeting 2026.

This paper quantifies expectation-driven demand in China using a quasi-experiment based on the housing purchase restriction (HPR) policy. We adopt a spatial difference-in-differences approach to identify both the direct and spillover effects of the policy. The results show that the HPR lowered housing prices by about 9% in treated cities and 5.33% in neighboring cities, while having no significant effects on transactions, completed areas, rents, fiscal revenues, or other local fundamentals. This pattern suggests that the policy curbed anticipatory behavior by dampening expectation-driven demand, which constitutes a substantial share of total demand. Furthermore, we develop a simple dynamic framework in which downward rigidity in expected resale prices generates a pecuniary externality, clarifying why the credibility of the first round of the HPR policy was pivotal in curbing the expectation-driven component of demand. 

VAT Distortion and Corporate Tax Avoidance with Renjie Zhao and Binbin Tian (Draft available upon request)

Presentations (including scheduled): 58th MVEA Virtual Conference 2021 and 97th WEAI Annual Conference 2022

Excess input VATs cannot be refunded in China, which causes a heavy financial burden for firms. Using the China National Tax Survey Database (NTSD), this paper explores the relation between input VAT credit carryovers and corporate income tax avoidance behavior. We find that the ratio of input VAT credit carryovers (IVCCs) scaled to cash inflow is negatively associated with effective corporate income tax rates (ETRs). In addition, we find that the tax avoidance activities of firms can be carried out by increasing their costs deducted before tax to underreport their profits. Finally, to explore the causal effect of input VAT credit carryovers on corporate income tax avoidance, we investigated the impact of a recent VAT reform that allowed VAT refunds for excess input VAT credits in 18 industries in 2018 using the China Stock Market & Accounting Research Database (CSMAR). The results indicate that refunding excess input VAT credits could improve corporate tax compliance.

Selected Work in Progress

Political connections, tax refund acquisition, and resource misallocation: Insights from China's tax bureau merger reform  with Renjie Zhao

Estimating speculative demand: Evidence from spillover effects of China’s housing purchase restriction policy with Meng-Ting Chen

The Impact of eliminating pecuniary externality in China's housing market with Meng-Ting Chen

The economic consequences of drifting wildfire smoke with Meng-Ting Chen and Shiyan Zhang