Announcing IEMS Grants 2023


We are pleased to announce the funding results of IEMS Research Grants 2023.   Out of a total of 21 applications, 6 grants valued at about HKD420,000 were awarded. 


Bid-Rigging Effects on Real Non-Market Outcomes: The Case of Brazil

Alminas Zaldokas, FINA

Dimas Fazio, Department of Finance, National University of Singapore

Using granular auction data on 15 million item purchases in Brazilian public procurements between 2005-2021, we document a widespread pattern that the lowest bidder (“kamikaze”) does not satisfy required formalities after the auction is concluded, which allows the second-lowest bid to win the auction. Such a pattern is observed in up to 15-20% of procurement auctions and results in 15-17% higher procurement prices as compared to similar auctions procuring the same product or service items, organized by the same government institutions, and even having the same winning firm. We plan to use observed kamikaze behavior as a marker to measure how higher procured prices that come from bid rigging contribute to negative real non-market outcomes. We would like to take the case of changes in the hospital mortality data after an increased fraction of procurement auctions involving kamikazes or similarly road accidents following the road service contracts involving kamikaze firm.


Import Sourcing, Supply Chain Network, and Firm Competitiveness: Evidence from Chinese Firms

Amber Li, ECON

We propose an analysis of the impact of unanticipated negative trade shock on firms’ adjustment of supply chain network and firm competitiveness. In particular, we are interested in firms located in the Greater Bay Area (GBA) due to their active participation in the global value chain. Combining trade data with firm-level production data, we will explore how firms manage their foreign supplier base and the constraints that limit their ability to adjust to adverse trade shocks. First, we will test how the trade shock at product-country level would affect firms’ sourcing origins of their targeted imports and non-targeted imports, respectively. Second, we will explore whether there exists heterogeneous response between the GBA firms and non-GBA firms. Moreover, we will build at theoretical model to uncover the underlying mechanisms and to quantify the aggregate impact of the adverse trade shock on total trade flows through firms’ adjustment of their supplier network.


Medical Litigation and Doctors’ Defensive Medicine Behaviors: Evidence from China

Bryant Kim, ECON

This study aims to investigate the impact of medical litigation on doctors’ defensive medicine practices. While existing literature has focused on developed countries like the United States, little systematic knowledge exists in the developing world. Doctors in developing countries, such as China, lack protection from medical malpractice insurance and legal liability immunity, so their defensive practices are more common and impose a heavy burden on the government. To address this gap, we will collect new administrative data on Chinese court rulings related to medical damage liability since 2014,which covers over 75,000 cases, and match online patient visit records of more than900,000doctors.All data will be collected via web scraping.1)Examine how medical liability litigation against doctors affects their defensive medicine practices2)Identify the potential mechanisms.3)Conduct a back-of-the-envelope calculation of the economic cost.4)Propose optimal legal protection programs both for doctors and patients.


How Do Economic Sanctions Shape Global Value Chains?


Sibo Liu, Department of Accountancy, Economics and Finance, Hong Kong Baptist University

The last two decades have witnessed the increasing use of economic sanctions in world politics. What impact do economic sanctions have on the globalized production? To what extent do economic sanctions reshape global value chains (GVCs)? The proposed study aims to shed light on these questions by conducting a thorough empirical analysis to assess the impacts of economic sanctions on GVCs from 1990 to 2019. We will collect and assemble data from a wide array of sources to build a comprehensive dataset on economic sanctions and GVCs. Quasi-experimental research designs will be employed to rigorously evaluate changes in GVC participation in target countries before and after the imposition of economic sanctions. The findings of the proposed study will have crucial implications for understanding the geopolitical impact on trade, informing policy debates on economic sanctions, and envisioning the future of globalization,


The Dammed Gender? Dams and Female Schooling in Africa

Han Li, SOSC

While electrification in Africa may promote economic development, the associated constructionof large dams is often blamed for exacerbating water shortage and pollution in the downstream areas. As women traditionally take the role of fetching water and giving care within the household, dam construction tends to have more direct adverse impacts on women. In this project, we propose to use a difference-in-differences design to explore how childhood exposure to a large dam affected schooling by comparing the changes in the years of schooling of women residing within 50 km and between50-100 km from the dams in the downstream area, before and after the construction of the dams. We also compare the patterns in the downstream area with those upstream. Next we will explore whether the adverse effect is stronger in societies with strong patriarchal traditions. Thirdly, we investigate whether the effects arise from exacerbated water scarcity or water pollution



Barriers to structural transformation and the decline in female employment: a quantitative analysis of China

Rachel Ngai, London School of Economics
Jiajia Gu, The Inclusion and Gender Issues Unit/IMF

Recent data from the International Labor Organization reveals that female employment rates have been falling in many developing countries, including many African countries and the two largest economies–China and India. One salient feature of the early development stage is the decline in agricultural employment share. The labor movement out of agriculture often faces various forms of barriers. The aim of this research is to examine the relationship between the decline in agriculture and the decline in female employment, and how the relationship is affected by labor mobility barriers. We focus on the case of the hukou system in China. Using rich microdata, we first examine whether the decline in female employment rates is associated with the decline in agriculture, and whether the hukou system reinforces this relationship. We then propose a multi-sector model with gender and two locations and quantify the impact of mobility barriers by conducting counterfactual exercises.

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