Research

You can also find my articles on my Google Scholar profile.

Publications

1. Exchange Rate Pass-Through and Importers’ Credit Constraints: Evidence from China

   (joint with Yao Amber Li and Tengyu Zhao)

   Published in Journal of Economic Behavior and Organization, 2025[Publication] [PDF] [Slides]

   Highlights

   • The average exchange rate pass-through (ERPT) into import prices in China is around 73%.
   • Tighter financial constraints of importers amplifies ERPT into import prices.
   • In opposite, greater sourcing diversity of importers reduces import ERPT.
   • We develop a model of bilateral negotiation to rationalize empirical patterns.

   Summary

   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.

   DOI: 10.1016/j.jebo.2025.107044

   Presentation

   • 2025* Young Economist Society (YES) Annual Conference, Hohhot, China
   • 2024* Global Economic Order and Regional Cooperation conference at SUFE, Shanghai, China
   • 2024 Australasian Trade Workshop (ATW), Christchurch, New Zealand

   * presented by co-authors

Working Papers

1. The Spill-back and Spillover Effects of US Monetary Policy: Evidence on an International Cost Channel

   (joint with Yao Amber Li, Shang-Jin Wei and Jingbo Yao)

   Revise and Resubmit for Journal of Monetary Economics, 2025[NBER WP] [PDF] [Slides]

   Summary

   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.

   DOI: 10.3386/w33811

   Presentation

   • 2025 China Economics Annual (CEA) Conference, Beijing, China
   • 2025 World Congress of the Econometric Society (ESWC), Seoul, South Korea
   • 2025 International Conference on Empirical Economics (ICEE) at PSU Altoona, Pittsburgh, USA
   • 2025* Chinese Economists Society (CES) China Annual Conference, Guangzhou, China
   • 2025* HKIMR-ECB-BOFIT Joint Conference, Hong Kong, China
   • 2024 China Trade Research Group (CTRG) Annual Meeting, Hong Kong, China
   • 2024* Melbourne Annual Macro Policy Meeting, Melbourne, Australia
   • 2024* NBER Chinese Economy Working Group Meeting, Shenyang, China
   • 2024 Asia Meeting of the Econometric Society (AMES) East & Southeast Asia, Ho Chi Minh City, Vietnam
   • 2024* China International Conference in Finance, Beijing, China
   • 2024* HKUST-Fudan-SMU Conference on International Economics, Hong Kong, China
   • 2024* Asia Meeting of the Econometric Society (AMES) in China, Hangzhou, China
   • 2024 Asian Finance Association (AsianFA) Conference, Macau, China
   • 2024 International Association for Applied Econometrics (IAAE) Annual Conference, Xiamen, China
   • 2024* NBER East Asian Seminar on Economics, Hong Kong, China
   • 2024* International Economics Joint Conference, Shenzhen, China
   • 2024* Australasian Trade Workshop (ATW), Christchurch, New Zealand
   • 2024* Empirical Investigations in Trade and Investment (EITI) Conference, Jakata, Indonesia

   * presented by co-authors

2. Import-Export Linkages as a Channel for Exchange Rate Hedging

   Job Market Paper, 2025[PDF] [Slides]

   Summary

   This paper shows that firms hedge exchange rate risk through their import–export linkages. Using Chinese customs micro data, I document that exchange rate shocks from import origins and export markets have opposite effects on export growth, and that these elasticities are markedly attenuated for two-way traders. Moreover, greater overlap between a firm’s supplier and destination portfolios further dampens the shock transmission. I develop a quantitative trade framework with risk aversion under mean–variance trade-off. Multilateral currency covariance and firm network shares jointly shape exposure of price competitiveness and cost channels. In an exact-hat linear system, exchange rate uncertainty creates risk-adjusted pricing premia and reallocates firms’ import shares toward currencies that offset revenue exposure. I also provide tractable counterfactual analyses on alternative trade structure and exchange rate environments.

   Presentation

   • 2025 HKUST CEP Brownbag Seminar, Hong Kong, China
   • 2025 Columbia Student Research Breakfast, New York, USA

   * presented by co-authors

In Progress

1. Global Sourcing with Two-Sided Bargaining: A Unified Framework

   (joint with Yao Amber Li and Tengyu Zhao)

   In Progress

2. Multi-Layer Trade Network and Exchange Rate Dynamics

   In Progress

3. The US Monetary Policy Spillover and Exporter Misallocation

   (joint with Yao Amber Li and Jingbo Yao)

   In Progress

   Presentation

   • 2024 HKUST CEP Brownbag Seminar, Hong Kong, China

   * presented by co-authors