NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Jie Bai

Harvard Kennedy School
79 JFK Street
Cambridge, MA 02138
Tel: 617/495-3805

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NBER Program Affiliations: DEV
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Harvard University

NBER Working Papers and Publications

September 2019Collective Reputation in Trade: Evidence from the Chinese Dairy Industry
with Ludovica Gazze, Yukun Wang: w26283
Collective reputation implies an important externality. Among firms trading internationally, quality shocks about one firm’s products could affect the demand of other firms from the same origin country. We study this issue in the context of a large-scale scandal that affected the Chinese dairy industry in 2008. Leveraging rich firm-product level administrative data and official quality inspection reports, we find that the export revenue of contaminated firms dropped by 84% after the scandal, relative to the national industrial trend, and the spillover effect on non-contaminated firms is measured at 64% of the direct effect. Notably, firms deemed innocent by government inspections did not fare any better than noninspected firms. These findings highlight the importance of collective reputati...
September 2013Does Economic Growth Reduce Corruption? Theory and Evidence from Vietnam
with Seema Jayachandran, Edmund J. Malesky, Benjamin A. Olken: w19483
Government corruption is more prevalent in poor countries than in rich countries. This paper uses cross-industry heterogeneity in growth rates within Vietnam to test empirically whether growth leads to lower corruption. We find that it does. We begin by developing a model of government officials' choice of how much bribe money to extract from firms that is based on the notion of inter-regional tax competition, and consider how officials' choices change as the economy grows. We show that economic growth is predicted to decrease the rate of bribe extraction under plausible assumptions, with the benefit to officials of demanding a given share of revenue as bribes outweighed by the increased risk that firms will move elsewhere. This effect is dampened if firms are less mobile. Our empirical an...
 
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