Professor of Economics
University of Pittsburgh
Pittsburgh, PA 15260
2006-: Professor of Economics and Public Policy, University of Pittsburgh
2007-: Co-editor of the Journal of Comparative Economics
Spring 2011 and 2012: Visiting Senior Faculty, Tsinghua University
Fall 2009 and 2010: Visiting Professor, City University of Hong Kong
2009-2010 Searle-Kauffman Fellow in Law, Innovation and Growth
“Do Property Rights Matter? Evidence from a Property Law Enactment” (with Chen Lin and Yue Ma), the Journal of Financial Economics, Forthcoming in 2015
“Bank Privatization, Finance and Growth” (with Mark Hoekstra and Koen Schoors), the Journal of Development Economics 110: 93-106, 2014 – (http://www.sciencedirect.com/science/article/pii/S0304387814000698)
"Valid Tests When Instrumental Variables Do Not Satisfy the Exclusion Restriction" (with Andres Riquelme and Mehmet Caner), the Stata Journal 13(3): 528-546.
"The Validity of Instruments Revisited" (with Mehmet Caner and Ying Fang), the Journal of Econometrics 166(2): 255-267, 2012
"The Evolution of a Nation: How Geography and Law Shaped the American States" (with Karen B. Clay), book project, Princeton University Press, January 2012 (for endorsements and chapter 1 see http://press.princeton.edu/titles/9626.html)
"Law, Trade, and Development" (with Johannes Moenius), the Journal of Development Economics 96: 451-460, 2011
"Do Elite Private High Schools Improve Academic Performance? Evidence from Admissions Data" (with Mark Hoekstra), the Economics of Education Review 30(2): 280-288, 2011
"Growth in Post-Soviet Russia: A Tale of Two Transitions?" (with David N. DeJong), the Journal of Economic Behavior and Organization 79: 133-43, 2011
"Are Nearly Exogenous Instruments Reliable?" (with Mehmet Caner and Ying Fang) Economics Letters 101: 20-23, 2008.
"Law, Trade and the Asian Miracle," (with Johannes Moenius), Asian Pacific Journal of Accounting and Economics 15(3): 291-315, 2008; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1133263
"The Effect of Judicial Independence on Courts: Evidence from the American States," (with Karen B. Clay) the Journal of Legal Studies 35(2): 399-400, June 2006.
"Entrepreneurship and the Evolution of Income Distributions in Poland and Russia," (with John E. Jackson), the Journal of Comparative Economics 34(2): 338-356, June 2006.
"Trade, Law and Product Complexity," (with Johannes Moenius and Katharina Pistor), the Review of Economics and Statistics 88(2): 363-373, May 2006.
"Economic Fragmentation in Russia: The Influence of International Trade and Initial Conditions," (with David N. DeJong), Economics of Governance 6(3): 253-268, November 2005.
"American Civil Law Origins: Implications for State Constitutions and State Courts," (with Karen B. Clay), American Law and Economics Review 7(1): 62-84, 2005.
"Entrepreneurship and Post-Socialist Growth,", Oxford Bulletin of Economics and Statistics (with David N. DeJong) 67 (1): 25-46, 2005.
" Legal Institutions and International Trade Flows," (with Katharina Pistor and Johannes Moenius), Michigan Journal of International Law 26(1): 163-198, Fall 2004.
"Integration: An Empirical Assessment of Russia," the Journal of Urban Economics (with David N. DeJong) 53: 541-559, 2003.
"The Transplant Effect," the American Journal of Comparative Law (with Katharina Pistor and Jean-Francois Richard) 51(1): 163-204, 2003.
"Policy Reform and Growth in Post-Soviet Russia," European Economic Review (with David N. DeJong) 47(2): 141-156, 2003; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=400680
"Economic Development, Legality and the Transplant Effect," European Economic Review (with Katharina Pistor and Jean-Francois Richard) 47(1): 165-195, 2003; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=183269
"Accounting for Post-Soviet Russia's Growth," Regional Science and Urban Economics (with David N. DeJong) 32(2): 221-239, 2002; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=46084
"Does Privatization Enhance or Deter Small Enterprise Formation?" Economics Letters (with Jonathan Holland) 74(1): 53-60, 2001; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=270421
"The Evolving Pattern of Internal Market Integration in Russia," Economics of Transition (with David N. DeJong) 9(1): 87-104, 2001; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=264842
"Tax Rights in Transition Economies: A Tragedy of the Commons?," Journal of Public Economics (with Wei Li) 76 (3): 369-398, 2000;
"Russia's Internal Border," Regional Science and Urban Economics (with David N. DeJong), 29 (5): 633-649, 1999; http://papers.ssrn.com/sol3/papers.cfm?abstract_id=134408
"Quantifying Price Liberalization in Russia," Journal of Comparative Economics (with David N. DeJong and Steven Husted), 26 (4), 735-60, 1998.
"Regional Income and Secession: Center-Periphery Relations in Emerging Market Economies," Regional Science and Urban Economics, 27 (1), 17-45, 1997.
"On the Persistence of Rationing Following Liberalization: A Theory for Economies in Transition," European Economic Review 40 (6), 1259-1280, 1996.
"Atavistic Dynamics in a Two Sector Economy," Journal of Economic Theory, 62, 238-252, 1994.
"A Simple Model of an Oligopolistic Parallel Market," Journal of Comparative Economics, 17 (1), 92-112, 1993.
"Fiscal Decentralization in the Soviet Economy," Comparative Economic Studies (with Beth Mitchneck) 34 (2), 1-18, 1992.
"Sequence of Techniques," Economics of Planning, 25: 191-217, 1992.
“Recasting the Iron Rice Bowl: The Evolution of China’s State-Owned Enterprises” (with Hong Ma and Shuichiro Nishioka), mimeo, March 2015
Abstract: The profitability of China's state owned enterprises (SOEs) sharply increased following the enactment of reforms in the mid-1990s. Rapid growth in profitability could indicate that SOEs restructured; however, it might also indicate that the state used its standard tools including product market protections, input subsidies and financial bailouts for its SOEs that in fact enable SOEs to avoid restructuring (Kornai, 1990; and 1992, Part III). This paper shows that SOE profitability grew for two reasons. First, the elasticity of substitution between capital and labor in 136 3-digit Chinese manufacturing sectors is generally estimated at above unity: thus, as the cost of capital for SOEs fell, the capital-intensity and profitability of SOEs dramatically increased. Second, our estimates show that over time SOEs were under less political pressure to hire excess labor. While the productivity of SOEs improved due to the policy of "grasping" the big ones and "letting go" of the small ones, it still lagged foreign and private firms. Overall, our results indicate that SOE restructuring was limited.
“Can Partisan Governments Influence the Income of Affluent Citizens? Theory and Evidence from Affluent Citizens in the American States” (with George Krause), mimeo, May 2105
Abstract: When can governments influence income gains going to its most affluent citizens? A theory of governance is advanced to explain how state capacity can offset partisan politicians’ efforts at altering income gains of its most affluent citizens. The theory’s empirical implications are analyzed using market income data derived from IRS tax returns from the American states during the 1986−2008 period. These data cover a period reflecting where rising income inequality is most acutely observed among the most affluent citizens. Empirical evidence supporting the theory indicates that only low levels of state capacity allows unified Republican (Democratic) state governments to enhance (curtail) the incomes of its most affluent citizens. Moreover, state capacity becomes an increasingly potent counterbalance to electoral institutions as the level of affluence rises. Therefore, robust state capacity serves as a powerful constraint on majoritarian policymaking by partisan politicians in the absence of divided party government.
“Declining Labor Shares and Heterogeneous Firms” (with Hong Ma and Shuichiro Nishioka), mimeo, May 2015
Abstract: The stability of labor's share of national income is a fundamental pattern documented in studies of long term country-level growth (Kaldor, 1961; Gollin, 2002). However, there is substantial evidence showing that labor's share has been declining in many countries since the 1980s. While theoretical explanations for declining labor shares use models with representative firms, this paper proposes a model in which firms can be heterogeneous in terms of capital-intensity, market power, ownership, and productivity. Using detailed data from Chinese manufacturing firms during the period of 1998-2007, we find that the main contributors to declining labor shares are the rightward shift in the distribution of market power for private firms, the rightward shift in the distribution of capital intensity for private and state owned firms, and the declining political pressure on state owned firms to protect jobs. Moreover, while globalization may have affected labor shares through its impact on firm level distributions, decomposition analysis indicates that globalization had no direct effect.
“Re-estimating the Capital-Labor Substitution Elasticity” (with Hong Ma and Shuichiro Nishioka), in progress
"The Evolution of an Economic and Political Middle Class in Transition Countries," with John E. Jackson, August 2005.
There is emerging work in progress on property rights, institutions, politics and outcomes in USA and China