Research
You can also find my articles on my
Google Scholar profile.
Publications
(joint with Yao Amber Li and Tengyu Zhao) Published in Journal of Economic Behavior and Organization, 2025
This paper examines the patterns of exchange rate pass-through (ERPT) among Chinese importers and the role played by credit constraints in shaping the ERPT. Using highly dis-aggregated firm-product-country-level transaction data from 2000 to 2007, we find that (1) the average level of ERPT into import prices in China is around 73%; (2) for importers in financially more constrained sectors, ERPT tends to be more complete; (3) a higher degree of import sourcing diversity leads to a less complete pass-through and partially offsets the effects of credit constraints. Our findings demonstrate the significance of credit constraints in governing ERPT into import prices. Furthermore, a more diversified import sourcing network can enhance the ability of importers to cope with exchange rate shocks and help alleviate the impact of financial constraints on international trade.
[Publication]
Working Papers
(joint with Yao Amber Li, Shang-Jin Wei and Jingbo Yao) Submitted
We find that an unanticipated tightening of US monetary policy tends to raise US import prices. This empirical “spill-back” pattern differs from the predictions of typical open-economy macro models. We also document a new empirical “spillover” effect: import prices of other countries also rise following an unexpected US monetary tightening. To understand the mechanism, we examine Chinese exporters and identify a borrowing cost channel - their liquidity conditions generally deteriorate after a US monetary tightening. Indeed, the output price response is greater for those firms facing higher borrowing costs or tighter liquidity conditions.
[Draft]
In Progress
Job Market Paper
This paper explores how import and export trade linkages can help firms hedge exchange rate risk. I provide empirical evidence that exchange rate shocks from the export market and the source of imports have opposite effects. Exchange rate movements at the destination of a firm’s exports are offset by exchange rate movements at the source of imports, and thus import-export linkages help mitigate the impact of exchange rate shocks on export performance. I will further discuss multilateral exchange rate correlations, where a firm’s mix of export markets and import sources will affect its effectiveness in hedging exchange rate risk. I will develop a trade model with nominal price and currency components. The exchange rate risk faced by a firm depends on its network of exports and imports.
