From May 28th to 29th, 2019, the 3rd Workshop on Firms in Emerging Economies was held at IESR, Jinan University. This is an annual workshop hosted by IESR and its Research Center for International Trade and Firms (CITF) since 2017.

This year, workshop brought together scholars from various renowned universities at home and abroad to present their latest research in industrial trade, industrial organization, development economics and other fields. It was also a great opportunity for researchers to discuss the data and policies in the age of globalization and industrial development across different emerging economies around the world.

Over the two-day workshop there were 9 presentations on a variety of topics given by Hugo Hopenhayn (UCLA), Lauren Bergquist (UMich), Yuhei Miyauchi (BU), Mike Dickstein (NYU), Kevin Lim (UToronto), Bee-Yan Roberts (PSU), Kevin Donovan (Yale), Daniel Bjorkegren (Brown) and Mitsuru Igami (Yale). In addition, there was a China and Rwanda-focused data benchmarking by Kevin Lim, Daniel Bjorkegren and Yuhei Miyauhchi.

As part of the workshop, a local company visit was arranged to the participants here in Guangzhou. Scholars had a chance to visit GAC Toyota Motor Co., Ltd., one of the biggest automobile manufacturing companies in the area, and thus gain a better understanding of the policy effects on local firms in China. 

Some of the scholars also attended Guangzhou International Tea Expo 2019, a large scale and market-oriented professional tea exhibition in the industry. After the tea expo, they had an exceptional opportunity to pay a visit to a few famous local clothing markets (Liuhua Clothing Wholesale Market; Hongmian International Clothing Market) and thus spend some of their free time enjoying the city of Guangzhou. 

You can find detailed program of the workshop here.

A few moments from this year's workshop

During the workshop, IESR team had an exceptional opportunity to speak with some of this year’s workshop participants. Mitsuru Igami, Kevin Donovan, Hugo Hopenhayn and Bee-Yan Roberts briefed us in about their research, shared their impressions of this year’s Workshop on Firms in Emerging Economies, and revealed how do they really see the ongoing trade war between China and the United States.

Could you briefly introduce yourself and tell us more about your research?

Mitsuru Igami: I’m empirical IO (Industrial Organization) economist at Yale University and my research focuses on strategic industry dynamics. In the paper that I will be presenting tomorrow I’m looking into Chinese industry dynamics at the turn of century, 2000, asking such macro questions as how productivity changed with privatization and different types of ownership of firms – questions that are normally asked in development economics or macroeconomics, but the statistical methods developed in empirical IO are suitable for answering these questions. So, in my research, micro topics meet micro methods.

Kevin Donovan: I’m an Assistant Professor at Yale School of Management. My research is primarily an intersection of development economics and macroeconomics – it’s about how to see changes in the developing world, what is it that keeps poor countries from growing richer, and how do those things manifest at a country level.

Hugo Hopenhayn: I’m a Professor of Economics at UCLA. I’m working in several research areas that intersect industrial organization, macroeconomics and economic theory. My most important contributions are related to firm dynamics, the evolution of the population of firms as they grow and age, the entry and exit of firms, and the role external firms as well as the growth and contraction of firms play in relocation of resources across firms.

Bee-Yan Roberts: I’m a Professor at Penn State University in the U.S. and my area of research focuses on the development of emerging economies using firm level micro data, although, my original area of focus is on international trade. My past papers have combined international development with IO questions looking at firm productivity, for instance, how does the upgrading or exporting effect productivity. Lately, I’ve been looking at the effects of R&D, that is – innovation activities of firms and what impact it has on the performance of export success.

How are you feeling here in the workshop so far? What do you expect to gain from it?

Mitsuru Igami:  Well, initially I wasn’t sure because firms in emerging economies can mean many different things, but once I saw the program – it made sense. Apart from Hugo Hopenhayn (one of my main advisors at UCLA where I did Ph.D.), who is an IO and macro person, and then me – an empirical IO person who is more on a macro side, here are also people working in development, trade, and urban economics. It’s a nice mixture of fields, approaches to questions surrounding emerging market firms, so I take this as an opportunity to cross-fertilize across fields.

Kevin Donovan: It has been really terrific! Firms – it is a topic that cuts across a lot of different fields of economics. It’s been really great having here IO people, macro people, and development people who are thinking about the same questions but with very different tools, and also see the complementarity between these different ideas that come out of workshop.

Hugo Hopenhayn: I met very nice people here, people that I have not known before. I also really connected with some of the talks because they are close to my own research. Others maybe a little bit less, but in general, talks were very interesting – I learned a lot from it. But, I think, what was really valuable is the opportunity to interact with other people, getting to talk to them.

Bee-Yan Roberts: The strength of this workshop is that is small, yet very focused on high quality research – every paper can offer an insight into an important question both in IO and trade. Participants are very knowledgeable and really good, while conference itself is very well organized and was able to pull together people from pretty diverse backgrounds to share their research ideas as well as give comments on other papers that have been presented. I think, the conference has done a pretty great job in terms of generating all these spillovers from individual researches. We are very fortunate to be participants in such a high-quality conference.

What are your impressions of IESR?

Mitsuru Igami:  It’s the first time I come to Guangzhou or even Guangdong province, and I had zero information about the institute prior to this. But knowing that Daniel Yi Xu is one of the leading organizers of this workshop, I have very high expectations. This must be a great place!

Kevin Donovan: The institute is so young, but what, you hired 40 people in the last 3 years? That’s fantastic! I was talking to the dean yesterday and he was mentioning the American style of tenure here, and things like that. As somebody personally who is in the department where there is a lot of hiring of junior faculty going on – it’s just a great place to be. And, getting a bunch of people in the workshops like this one, learning about the institute and vice versa – it’s terrific.

Hugo Hopenhayn: Well, I don’t know much about the institute but, as a new institution it has the talent of getting its name known and attracting people to come here – the fact that you got involved and people like Daniel says a lot about this place. I’m actually a co-other of one paper with Daniel – I know his work, and I really respect him. I think, getting in touch with such people and bringing them in as part of the institute is absolutely essential.  

Bee-Yan Roberts: Because it is so young, it is really good that the resources are being put into opening it up and making sure that the people who have been hired are exposed to the best researchers in the world – and this conference is a step into that direction. I hope, in the future there will be more conferences like this, because that is something what makes the place very vibrant. I have talked to many faculty members and they all seem very happy and highly productive in the areas they work in – I have been very impressed with the quality of people and the IESR ability to support young researchers. At Penn State, we always have graduates who are returning to China and IESR would be definitely a place that we would recommend our graduates consider very seriously.

Given many years of experience that you gathered over the years, perhaps there is something that you would like to recommend our faculty and especially all those young scholars who are just at the beginning of their careers?

Hugo Hopenhayn: They have to study hard, talk to people, listen, and try to participate in seminars as much as possible. It’s also important to take advantage of any opportunity they have to interact with people, maintain their network, and overtime push themselves and have the courage to ask even more important and deeper questions.

Bee-Yan Roberts: I have been talking with a couple of researchers here and they mentioned that, even though they are very happy here, it’s very hard work – it’s hard to get tenure and thus have more permanent position here. My advice to them: hard work is an investment which is very important in the beginning of their career, and it’s absolutely worth it because in the end, once you get tenure, you are able to work on deeper questions and have much longer-term perspective. Being academic is really one of the best jobs in the world!

What is your view on U.S.–China trade war?

Mitsuru Igami:  Obviously, any reasonable economist would say that it’s a bad idea. But then, being a Japanese, it makes me kind of smile because I have seen this kind of episode before in the 80s [referring to the U.S.–Japan trade war]. I think, it’s a typical phase in history where an emerging economy like China becomes one of the leading countries in the world – it’s inevitable that another country like the U.S., which now takes China very seriously, would take actions. That kind of confrontation happens but, hopefully, things will get resolved peacefully.

Kevin Donovan: I have a lot of thoughts about it [laughing]. So, it’s stupid, I suppose. I think, at the fundamental level, at least from what I’ve heard from the U.S. government, it has been driven by the lack of understanding of what it means to have a trade deficit – the whole thing seems totally misguided and now we are trying to change something that we don’t really need to change. One thing that, I think, all economists agree on, is that free trade in some sense is good. There are, of course, distributional issues that you have to work out with trade but that’s where the discussion needs to be. Like, taken the U.S. perspective, how do we compensate coalminers or steel plant workers who lose their jobs from the gains of the Silicon Valley – gains that come from that trade? To me, that is a real question. But the idea whether or not we should have trade is not something that anyone disagrees on.

Hugo Hopenhayn: It’s very damaging for both countries. It might benefit some of the firms protected by tariffs in the countries, but ultimately it will just raise costs and prices for everybody. It is hard to justify something that stands in the way when the world is moving towards more openness and integration. It has always been the case – whenever there is a transition, there is always those who try to stop it. Openness has contributed a lot to the productivity and countries’ growth, to their cultural, ideological integration, and so on. So, I think it’s a very bad move.

Bee-Yan Roberts: As an economist, and more specifically as a trade economist, I think it’s very unfortunate that a trade war is even considered as a good thing. Economically, it’s costly both for the U.S., China, and the rest of the world to have trade wars going on because it raises prices, tension and, most importantly, it raises uncertainty about the investment and how people should plan for the future. Now, they cannot plan anything and that becomes a big cost as things develop.

I also see trade war as something very political – something where one side has political motivation trying to convince the other side that it is in the interest to continue bargaining and fighting but, I think, in the end, both consumers and producers in both of these countries, as well as global economy itself, are going to lose. Also, countries like Singapore (where I come from) that are very open and depend on international trade and large countries like China and the U.S. are going to suffer. I hope, this trade war will not last for very long. I hope, both sides can politically agree to end trade war and go back to much more open international market because it is in the advantage of global community.

Workshop on Firms in Emerging Economies 2019 participants