XIAN JIANG

I am an Assistant Professor at University of California, Davis. I study firm behavior in response to technology improvements and government policies. I am affiliated with the CESifo.

Research interests: Trade, Firm dynamics, Regional economics

Here is my CV.

You can contact me at xian.jiang@ucdavis.edu.

RESEARCH

WORKING PAPERS

Information and Communication Technology and Firm Geographic Expansion, May 2023

Urban Economics Association Student Prize (Honorable Mention)

This paper studies how information and communication technology (ICT) affects the firm geographic organization and its implications on aggregate efficiency. ICT can widen firms' geographic span of control by reducing their internal communication costs. Empirical evidence from confidential US Census data shows that firms with more advanced technology have both higher within-firm communication and larger geographic coverage. I then develop a quantitative spatial equilibrium model in which firms endogenously adopt ICT, choose multiple production locations, and trade domestically. I estimate the model by exploiting natural experimental variation from the Internet privatization of the early 1990s. The model quantifies that privatization led to an overall efficiency gain of 1.3%, two-fifths of which came from firm geographic expansion. The distribution of these gains across locations is shaped by multi-unit firms' location choices. Policy simulations show that, in reducing the digital gap, a coordinated national policy leads to larger efficiency gains than local policies.

PUBLICATIONS

Tax Policy and Lumpy Investment: Evidence from China VAT Reform

(with Zhao Chen, Zhikuo Liu, Juan Carlos Suarez-Serrato and Daniel Yi Xu), Review of Economic Studies, Volume 90, Issue 2, March 2023, Pages 634-674

A universal fact of firm-level data is that investment is lumpy: firms either replace a considerable fraction of their existing capital (spike) or do not invest at all (inaction). This paper incorporates the lumpy nature of investment into the study of how tax policy affects investment behavior. We show that tax policy can directly impact the lumpiness of investment and that the effectiveness of tax incentives in stimulating investment depends crucially on interactions with investment frictions. We illustrate these results by studying one of the largest tax incentives for investment in recent history: China's 2009 VAT reform. Using administrative tax data and a difference-in-differences design, we document that the reform increased investment by 36% and that this effect is driven by additional investment spikes. We then simulate the fiscal cost of stimulating investment through different tax policies using a dynamic investment model that is consistent with the reduced-form effects of the reform. Policies that directly reduce the likelihood of firm inaction (e.g., investment tax credits) are more effective at stimulating investment than policies that only reduce the tax cost of investment (e.g., corporate income tax cuts).

WORK IN PROGRESS

R&D Mobility (with Rahul Gupta and William Kerr)
The Adoption of Non-Rival Inputs and Firm Scope (with Hannah Rubinton)
Information and Communication Technology and Firm Product Scope