Stepping Down from Life-long Posts: Layoffs, Fertility, and Educational Attainment in Urban China (with Junsen Zhang and Kang Zhou), Forthcoming , Journal of Labor Economics
The Cultural Origins of Family Firms (with Song Yuan), Journal of Comparative Economics, Volume 53, Issue 1, March 2025, Pages 1-24
Investments and Innovation with Non-Rival Inputs: Evidence from Chinese Artificial Intelligence Startups (with Kang Zhou), Revise and Resubmit, Review of Economics and Statistics
Abstract: Large technology firms have substantial advantages in data, a key non-rival input for developing AI technology. We argue that investments by large technology firms stimulate innovation by AI startups through the sharing of data, bringing more than money to the startups. We assemble a unique dataset containing (nearly) the universe of AI-inventing firms in China to examine the innovation effects of these investments. Our difference-in-differences estimation shows that, after receiving investments from large technology firms, AI startups increase the number of AI patent applications by 62% and the number of software products by 56%, relative to their mean values prior to the investments. Using a triple-differences strategy, we further find that the innovation impact of investments by large technology firms is stronger than that of investments by other firms without data advantages. We confirm these findings using an instrumental variables approach based on recent investments by large technology firms in peer startups. Finally, we provide novel evidence that the innovation effect works mainly through sharing non-rival data by leveraging our rich information on non-AI data-related patent applications and data-related online job postings.
Dying to Survive: Unintended Consequences of Environmental Regulations on Industrial Accidents (with Xiaowei Chen, Qiyue Shen, Xuebo Wang, and Zhilong Zhang)
Abstract: We investigate the impact of environmental regulations on industrial accidents by exploiting the 2014 revision of China’s Environmental Protection Law (EPL), heralded as “the strictest environmental law in China’s history.” These tightened regulations may have significantly financially constrained pollution-intensive firms, forcing them to reduce precautionary spending on production safety in order to survive, thereby potentially increasing the risk of industrial accidents. With a difference-in-differences strategy, we compare changes in industrial accidents between pollution-intensive and non-pollution-intensive industries at the prefecture level before and after the implementation of the revised EPL. Our estimates indicate that stricter environmental regulations led to an approximately 60.4% increase in the number of industrial accidents in heavily polluting industries. Furthermore, we demonstrate that the reduction in firms’ safety investments, caused by tighter financial constraints following the stricter regulations, is a plausible underlying mechanism. Our study highlights an additional hidden cost of environmental regulations that has been overlooked in the literature, suggesting that traditional estimates of the costs of environmental regulations may have significantly underestimated their broader societal impact.
Informal Institutions, Corporate Innovation, and Policy Innovation (with Bernard Yeung and Qinhong Yu)
Abstract: Informal institutions can play a crucial role in fostering corporate and policy innovation, especially when formal institutions are weak. However, their intangible nature makes them difficult to quantify. In this paper, we proxy the strength of kinship-based informal institutions using surname homogeneity among business owners, specifically, the extent to which they share a limited number of surnames within the same county. Our analysis reveals that a one-standard-deviation increase in the strength of informal institutions is associated with a 21.1% increase in patent filings and an 18.9% increase in policy innovation. We find that kinship-related informal institutions foster corporate innovation by compensating for weak formal institutions, enhancing protection for intellectual property rights, facilitating access to finance, improving public service delivery, and promoting supply chain cooperation. We also suggest that kinship-related informal institutions encourage local governments to engage in policy experimentation, which relies on the collaboration of business owners. This process is easier to coordinate and monitor in counties dominated by a few kinship networks. Both informal institutions and policy innovation contribute to economic development and foster entrepreneurial market entries. However, the positive impact of informal institutions declines over time as formal institutions strengthen in China.
The Digital Second Shift: Gender Gap in Parenting App Usage in China (with Huan Cai and Lu Dong)
Abstract: This paper examines gender disparities in parenting in the digital domain, using a novel dataset that records the gender composition of users across more than 6,000 app-level observations in China. Two patterns stand out. First, parenting apps are strongly feminized: women account for nearly two-thirds of users, compared to fewer than half for the typical non-parenting app. Second, the female share is highest in cities where women enjoy greater income and educational attainment, and lowest in areas marked by more entrenched gender inequality. The women most engaged in digital caregiving are therefore those best positioned to transcend traditional roles. Mechanism analysis suggests that this is not driven by broader digital fluency among affluent women, but rather reflects their intentional choice for intensive parenting practices.