Young Researcher Workshop

The Allocative and Welfare Effects of Disrupting Supply Chains: The Case of Local Content Requirements in China

Speaker: Xiangyu Shi, Ph.D. Candidate in Economics at Yale University

Local content requirement (LCR) protects local interests and disrupts buyer-supplier chains, since it requests local firms to buy the outputs of other local firms as inputs. Hence, it affects firms' location choices, as buyer-supplier chains affect cost-effectiveness. I find that LCR shapes the spatial distribution of firm entry and exit through this mechanism. Favoritism by local career-driven leaders under economic decentralization is the driver of the effects. A novel spatial quantitative model indicates that eradicating LCR enhances welfare, by reducing mismatch between buyers and suppliers and mismatch between firms and locations.

About the Workshops

The SCCEI Young Researcher Workshops are a bi-weekly series of presentations from scholars around campus who are working on issues related to China’s economy and institutions. The aim of the series is to bring together young scholars by providing a platform to present new research, get feedback, exchange ideas, and make connections. Each session features a single presenter who may present a new research plan, share results from preliminary data analyses, or do a trial run of a job talk or conference presentation. The Workshop Series is an opportunity to give and receive feedback on existing research, get to know other researchers around campus who are working on or in China, and be a testing ground for new ideas, data, and presentations.

Workshops are held every other Thursday from 1 - 2 pm. Afternoon refreshments will be provided! 

Visit the Young Researcher Workshops webpage for more information on the content and format of the series and to learn how to sign up to present.