Economics Faculty Database
Arts & Sciences
Duke University

 HOME > Arts & Sciences > Economics > Faculty    Search Help Login pdf version printable version 

Publications of Daniel Yi Xu    :recent first  alphabetical  combined listing:

%% Journal Articles   
   Author = {Guner, N and Ventura, G and Yi, X},
   Title = {How costly are restrictions on size?},
   Journal = {Japan and the World Economy},
   Volume = {18},
   Number = {3},
   Pages = {302-320},
   Publisher = {Elsevier BV},
   Year = {2006},
   Month = {August},
   ISSN = {0922-1425},
   url = {},
   Abstract = {We develop a simple framework to address government policies
             that restrict the size of establishments in a particular
             sector. The economy we study is a two-sector extension of
             the span-of-control model of Lucas [Lucas, R.E., 1978. On
             the size distribution of business firms. Bell Journal 9,
             508-523]. In the model, production requires a managerial
             input, and individuals sort themselves into managers and
             workers. Since managers are heterogeneous in terms of their
             ability, establishments of different sizes coexist in
             equilibrium in each sector. We then study government
             policies that aim to change the size distribution of
             establishments in a given sector, such as Japan's Large
             Scale Retail Location Law. How costly are these policies?
             What is their impact on productivity, the number and size
             distribution of establishments? We find that these effects
             are potentially large. © 2005 Elsevier B.V. All rights
   Doi = {10.1016/j.japwor.2004.11.002},
   Key = {fds239257}

   Author = {Xu, DY},
   Title = {A Structural Empirical Model of R&D, Firm Heterogeneity, and
             Industry Evolution},
   Year = {2008},
   Key = {fds325963}

   Author = {Aw, BY and Roberts, MJ and Xu, DY},
   Title = {R&D investments, exporting, and the evolution of firm
   Journal = {American Economic Review},
   Volume = {98},
   Number = {2},
   Pages = {451-456},
   Publisher = {American Economic Association},
   Year = {2008},
   Month = {May},
   ISSN = {0002-8282},
   url = {},
   Doi = {10.1257/aer.98.2.451},
   Key = {fds239258}

   Author = {Guner, N and Ventura, G and Xu, Y},
   Title = {Macroeconomic implications of size-dependent
   Journal = {Review of Economic Dynamics},
   Volume = {11},
   Number = {4},
   Pages = {721-744},
   Publisher = {Elsevier BV},
   Year = {2008},
   Month = {October},
   ISSN = {1094-2025},
   url = {},
   Abstract = {Government policies that impose restrictions on the size of
             large establishments or firms, or promote small ones, are
             widespread across countries. In this paper, we develop a
             framework to systematically study policies of this class. We
             study a simple growth model with an endogenous size
             distribution of production units. We parameterize this model
             to account for the size distribution of establishments and
             for the large share of employment in large establishments.
             Then, we ask: quantitatively, how costly are policies that
             distort the size of production units? What is the impact of
             these policies on productivity measures, the equilibrium
             number of establishments and their size distribution? We
             find that these effects are potentially large: policies that
             reduce the average size of establishments by 20% lead to
             reductions in output and output per establishment up to 8.1%
             and 25.6% respectively, as well as large increases in the
             number of establishments (23.5%). © 2008 Elsevier Inc. All
             rights reserved.},
   Doi = {10.1016/},
   Key = {fds239259}

   Author = {Aw, BY and Roberts, MJ and Xu, DY},
   Title = {R&D investment, exporting, and productivity
   Journal = {American Economic Review},
   Volume = {101},
   Number = {4},
   Pages = {1312-1344},
   Publisher = {American Economic Association},
   Year = {2011},
   Month = {June},
   ISSN = {0002-8282},
   url = {},
   Abstract = {This paper estimates a dynamic structural model of a
             producer's decision to invest in R&D and export, allowing
             both choices to endogenously affect the future path of
             productivity. Using plant-level data for the Taiwanese
             electronics industry, both activities are found to have a
             positive effect on the plant's future productivity. This in
             turn drives more plants to self-select into both activities,
             contributing to further productivity gains. Simulations of
             an expansion of the export market are shown to increase both
             exporting and R&D investment and generate a gradual
             within-plant productivity improvement. © The Nobel
             Foundation 2010.},
   Doi = {10.1257/aer.101.4.1312},
   Key = {fds239261}

   Author = {Lederman, D and Rodríguez-Clare, A and Xu, DY},
   Title = {Entrepreneurship and the extensive margin in export growth:
             A microeconomic accounting of Costa Rica's export growth
             during 1997-2007},
   Journal = {The World Bank Economic Review},
   Volume = {25},
   Number = {3},
   Pages = {543-561},
   Publisher = {Oxford University Press (OUP)},
   Year = {2011},
   Month = {December},
   ISSN = {0258-6770},
   url = {},
   Abstract = {Successful exporting countries are often seen as successful
             economies. This paper studies the role of new exporting
             entrepreneurs-defined as firms that became exporters-in
             determining export growth in a fast growing and export
             oriented middleincome country i.e., Costa Rica during
             1997-2007. It provides a detailed description of the
             contribution of export entrepreneurs in the short and long
             run, and comparing the observed patterns with an emerging
             literature on the role of the "extensive" margin in
             international trade. On a year-by-year basis, the rate of
             firm turnover into and out of exporting is high, but exit
             rates decline rapidly with age (i.e., the number of years
             the firm has been exporting). On average, about 30 percent
             of firms in each year tend to exit export activities, and a
             similar percentage of firms enter. The exiting and entering
             firms tend to be significantly smaller than incumbent firms
             in terms of export value (e.g., entrants export about 30
             percent less on average than incumbent firms). These
             findings are consistent with existing evidence for other
             middle income Latin American countries. However, in the long
             run new product-firm combinations (i.e., product-firm
             combinations not present in 1997) account for almost 60
             percent of the value of exports in 2007. Surviving new
             exporters actively adopted new products (for the firm, but
             not necessarily new for the country) and abandoned weaker
             existing products they start with, and their export growth
             rates were very high during a period (1999-2005) when those
             of incumbent exporting firms were actually negative. © The
             Author 2011. Published by Oxford University Press on behalf
             of the International Bank for Reconstruction and
             Development/The World Bank. All rights reserved.},
   Doi = {10.1093/wber/lhr031},
   Key = {fds239260}

   Author = {Roberts, M and Xu, DY and Fan, X and Zhang, S},
   Title = {The Role of Firm Factors in Demand, Cost, and Export Market
             Selection for Chinese Footwear Producers},
   Publisher = {National Bureau of Economic Research},
   Year = {2012},
   Month = {January},
   url = {},
   Doi = {10.3386/w17725},
   Key = {fds328794}

   Author = {Dunne, T and Klimek, SD and Roberts, MJ and Xu, DY},
   Title = {Entry, exit, and the determinants of market
   Journal = {The Rand Journal of Economics},
   Volume = {44},
   Number = {3},
   Pages = {462-487},
   Publisher = {WILEY},
   Year = {2013},
   Month = {September},
   ISSN = {0741-6261},
   url = {},
   Abstract = {This article estimates a dynamic, structural model of entry
             and exit for two US service industries: dentists and
             chiropractors. Entry costs faced by potential entrants,
             fixed costs faced by incumbent producers, and the toughness
             of short-run price competition are important determinants of
             long-run firm values, firm turnover, and market structure.
             In the dentist industry entry costs were subsidized in
             geographic markets designated as Health Professional
             Shortage Areas (HPSA) and the estimated mean entry cost is
             11 percent lower in these markets. Using simulations, we
             find that entry cost subsidies are less expensive per
             additional firm than fixed cost subsidies. © 2013,
   Doi = {10.1111/1756-2171.12027},
   Key = {fds239256}

   Author = {Midrigan, V and Xu, DY},
   Title = {Finance and misallocation: Evidence from plant-level
   Journal = {American Economic Review},
   Volume = {104},
   Number = {2},
   Pages = {422-458},
   Publisher = {American Economic Association},
   Year = {2014},
   Month = {February},
   ISSN = {0002-8282},
   url = {},
   Abstract = {We use producer-level data to evaluate the role of financial
             frictions in determining total factor productivity (TFP). We
             study a model of establishment dynamics in which financial
             frictions reduce TFP through two channels. First, finance
             frictions distort entry and technology adoption decisions.
             Second, finance frictions generate dispersion in the returns
             to capital across existing producers and thus productivity
             losses from misallocation. Parameterizations of our model
             consistent with the data imply fairly small losses from
             misallocation, but potentially sizable losses from
             inefficiently low levels of entry and technology adoption.
             Copyright © 2014 by the American Economic
   Doi = {10.1257/aer.104.2.422},
   Key = {fds239255}

   Author = {Eslava, M and Fieler, AC and Xu, DY},
   Title = {(Indirect) input linkages},
   Journal = {American Economic Review},
   Volume = {105},
   Number = {5},
   Pages = {662-666},
   Publisher = {American Economic Association},
   Year = {2015},
   Month = {January},
   ISSN = {0002-8282},
   url = {},
   Doi = {10.1257/aer.p20151122},
   Key = {fds239254}

   Author = {Edmond, C and Midrigan, V and Xu, DY},
   Title = {Competition, markups, and the gains from international
   Journal = {American Economic Review},
   Volume = {105},
   Number = {10},
   Pages = {3183-3221},
   Publisher = {American Economic Association},
   Year = {2015},
   Month = {January},
   ISSN = {0002-8282},
   url = {},
   Abstract = {We study the procompetitive gains from international trade
             in a quantitative model with endogenously variable markups.
             We find that trade can significantly reduce markup
             distortions if two conditions are satisfied: (i ) there is
             extensive misallocation, and (ii ) opening to trade exposes
             hitherto dominant producers to greater competitive pressure.
             We measure the extent to which these two conditions are
             satisfied in Taiwanese producer-level data. Versions of our
             model consistent with the Taiwanese data predict that
             opening up to trade strongly increases competition and
             reduces markup distortions by up to one-half, thus
             significantly reducing productivity losses due to
   Doi = {10.1257/aer.20120549},
   Key = {fds290828}

   Author = {Fieler, AC and Eslava, M and Xu, DY},
   Title = {Trade, quality upgrading, and input linkages: Theory and
             evidence from Colombia},
   Journal = {American Economic Review},
   Volume = {108},
   Number = {1},
   Pages = {109-146},
   Publisher = {American Economic Association},
   Year = {2018},
   Month = {January},
   url = {},
   Abstract = {A quantitative model brings together theories linking
             international trade to quality, technology, and demand for
             skills. Standard effects of trade on importers and exporters
             are magnifed through domestic input linkages. We estimate
             the model with data from Colombian manufacturing frms before
             the 1991 trade liberalization. A counterfactual trade
             liberalization is broadly consistent with postliberalization
             data. It increases skill intensity from 12 to 16 percent,
             while decreasing sales. Imported inputs, estimated to be of
             higher quality, and domestic input linkages are
             quantitatively important. Economies of scale, export
             expansion, and reallocation of production are small and
             cannot explain post-liberalization data.},
   Doi = {10.1257/aer.20150796},
   Key = {fds331945}

   Author = {Xu, DY},
   Title = {Comments on “Innovation and product reallocation in the
             great recession”},
   Journal = {Journal of Monetary Economics},
   Volume = {93},
   Pages = {21-23},
   Publisher = {Elsevier BV},
   Year = {2018},
   Month = {January},
   url = {},
   Doi = {10.1016/j.jmoneco.2017.10.002},
   Key = {fds331308}

   Author = {Chen, Z and Liu, Z and Suárez Serrato and JC and Yi Xu,
   Title = {Notching R&D Investment with Corporate Income Tax Cuts in
   Year = {2018},
   Month = {June},
   Key = {fds343255}

   Author = {Cabral, L and Wang, Z and Xu, DY},
   Title = {Competitors, complementors, parents and places: Explaining
             regional agglomeration in the U.S. auto industry},
   Pages = {1-29},
   Publisher = {Elsevier BV},
   Year = {2018},
   Month = {October},
   url = {},
   Abstract = {© 2018 Elsevier Inc. Taking the early U.S. automobile
             industry as an example, we evaluate four competing
             hypotheses on regional industry agglomeration:
             intra-industry local externalities, inter-industry local
             externalities, employee spinouts, and location fixed
             effects. Our findings suggest that in the automobile case,
             inter-industry local externalities (particularly from the
             carriage and wagon industry) and employee spinouts
             (particularly due to the high spinout rate in Detroit) play
             important roles. The presence of other firms in the same
             industry has a negligible or negative effect. Finally, local
             inputs account for some agglomeration in the short run, but
             the effects are much more profound in the long
   Doi = {10.1016/},
   Key = {fds338620}

   Author = {Roberts, MJ and Xu, DY and Fan, X and Zhang, S},
   Title = {The role of firm factors in demand, cost, and export market
             selection for chinese footwear producers},
   Journal = {Review of Economic Studies},
   Volume = {85},
   Number = {4},
   Pages = {2429-2461},
   Publisher = {Oxford University Press (OUP)},
   Year = {2018},
   Month = {October},
   url = {},
   Abstract = {© The Author(s) 2017. Published by Oxford University Press
             on behalf of The Review of Economic Studies Limited. In this
             article, we use micro data on both trade and production for
             a sample of large Chinese manufacturing firms in the
             footwear industry from 2002 to 2006 to estimate an empirical
             model of export demand, pricing, and market participation by
             destination market. We use the model to construct indexes of
             firm-level demand, marginal cost, and fixed cost. The
             empirical results indicate substantial firm heterogeneity in
             all three dimension with demand being the most dispersed.
             The firm-specific demand and marginal cost components
             account for over 30% of market share variation, 40% of sales
             variation, and over 50% of price variation among exporters.
             The fixed cost index is the primary factor explaining
             differences in the pattern of destination markets across
             firms. The estimates are used to analyse the supply
             reallocation following the removal of the quota on Chinese
             footwear exports to the EU. This led to a rapid
             restructuring of export supply sources on both the intensive
             and extensive margins in favour of firms with high demand
             and low fixed costs indexes, with marginal cost differences
             not being important.},
   Doi = {10.1093/restud/rdx066},
   Key = {fds339234}

   Author = {Hu, MM and Yang, S and Xu, DY},
   Title = {Understanding the social learning effect in contagious
             switching behavior},
   Journal = {Management Science},
   Volume = {65},
   Number = {10},
   Pages = {4771-4794},
   Publisher = {Institute for Operations Research and the Management
             Sciences (INFORMS)},
   Year = {2019},
   Month = {January},
   url = {},
   Abstract = {© 2019 INFORMS We study the contagious switching behavior
             related to a consumer’s choice of wireless carriers, that
             is, that a consumer is more likely to switch wireless
             carriers if more of their contacts from the same carrier
             have switched. Contagious switching (or a positive network
             effect) can be driven by information-based social learning,
             as well as other mechanisms related to network size.
             Although previous marketing literature has documented the
             social-learning effect, most of the applications studied
             involve products in which consumers usually do not enjoy any
             direct benefits from a large network other than from
             information-based social learning. We explore the importance
             of the social-learning effect relative to other mechanisms
             that may also lead to the network effect. We propose a
             dynamic structural model with interpersonal interactions. To
             model the social-learning effect, a consumer uses feedback
             from his or her contacts who have switched from a focal
             carrier to update his or her quality expectations of
             alternative carriers. Our model further accounts for two
             unique aspects of consumer strategic learning: (i) the
             individual’s perception on the signal of alternative
             carriers from contacts who switch is systematically
             different according to whether the signal comes from a loyal
             contact; and (ii) that the perceived noisiness of the signal
             on alternative carriers from a contact who has switched
             depends on the strength of the relationship between the
             individual and the contact. The remaining network effect not
             captured through social learning is modeled as a function of
             the size of the network. We solve the model with a two-step
             dynamic programming algorithm, with the assumption that a
             consumer is forward-looking and decides whether to stay with
             the same service carrier in each period by maximizing the
             total utility received from that day onward. We apply the
             proposed model to the data set of a mobile network operator
             in a European country. We find that churning/switching
             behavior is contagious in the network context and that
             one-third of general network effects can be attributed to
             social learning. We also detect strategic learning by
             consumers from their contacts in two ways: the experience
             signal on alternative carriers from a more loyal contact who
             has switched from the focal carrier is perceived to be more
             positive than that from a less loyal contact; and the
             social-learning effect is stronger from an individual’s
             closest contacts. The simulation analysis demonstrates the
             value of our model in helping a company prioritize its
             customer relationship management effort.},
   Doi = {10.1287/mnsc.2018.3173},
   Key = {fds346772}

Duke University * Arts & Sciences * Economics * Faculty * Research * Staff * Master's * Ph.D. * Reload * Login