Rowan Shi
I am an Assistant Professor of Economics at Toronto Metropolitan University in Canada.
research interests
International trade, urban/spatial economics, computational methods
contact
E-mail: rowanxshi@torontomu.ca
GitHub: rowanxshi
CV: web or PDF
Research
working papers
Combinatorial discrete choice, with Costas Arkolakis, Fabian Eckert
Revise and Resubmit, American Economic Review
Abstract
We introduce a general quantifiable framework to study the location decisions of multinational firms. In the model, firms choose in which locations to pay the fixed costs of setting up production, taking into account potential complementarities among production locations. The firm’s location choice problem is combinatorial because the marginal value of an individual production location depends on its complete set of production sites. We develop a computational method to solve such problems and aggregate optimal decisions across heterogeneous firms. We use our calibrated model to study Brexit and the recent sanctions war with Russia. In both counterfactuals, changes in the location decisions of multinationals are driving real wage responses.NBER WP, Julia Package and documentation
Non-traded gains from trade: Evidence from Brazil, with Rafael Parente
Abstract
We investigate the impact of trade shocks on the labor allocation within industries at the local labor market level. Using the Brazilian import liberalization of the 1990s as the empirical setting, we uncover a novel margin for impact of trade: industrial reorganization among non-traded producers. We begin by showing empirically that local labor markets more exposed to the policy experienced more job reallocation across firms within traded and non-traded industries compared to those less exposed. Moreover, small establishments were less likely to survive compared to large establishments; among survivors, they were less likely to grow. To explain these empirical regularities, we provide reduced-form evidence that non-traded producers select into importing: plants in high exposure regions were more likely to start importing, with new importers originating from the middle of the size distribution but growing the most over the liberalization period. Motivated by these findings, we develop a parsimonious model of heterogeneous producers incorporating this mechanism. The theory is consistent with the empirical findings, and implies that reallocation among non-traded producers is welfare-enhancing. In contrast, in a special case where all non-traded producers make the same importing decision, this reallocation effect disappears. To evaluate the welfare effects of our findings, we extend the model to a quantifiable framework which we discipline with our empirical estimates.Solving combinatorial discrete choice problems in heterogeneous agent models: theory and an application to corporate tax harmonization in the European Union, with Kathleen Hu
Abstract
This paper develops a solution method for computing optimal decisions to combinatorial discrete choice problems (CDCPs) in heterogeneous agent settings. With an arbitrary type distribution over any number of differentiated characteristics, it quickly computes the policy function mapping the entire type space to corresponding optimal actions. The binary decisions can display either supermodular or submodular interactions. Problems of this structure arise naturally ineconomic settings, especially in international trade and industrial organization. The proposed algorithm is particularly well suited for estimating or computing general equilibrium models incorporating heterogeneous agents solving CDCPs, including choices on plant locations, input sourcing partners, or export market entry. As an illustration of the algorithm in practice, the paper then turns to evaluating the effects of a counterfactual policy equalizing corporate tax rates across the European Union using a quantitative general equilibrium model where heterogeneous firms optimally select a set of countries in which to operate affiliates.works in progress
Place-based policy for national welfare, with Paula Donaldson, Fabian Trottner