Research

Competition and Investment: Empirical Evidence from the Hotel Industry (under major revision)

This paper studies the relationship between competition and investment incentives in the Taiwanese hotel industry. Using detailed firm-level investment, revenue, and sales data, I estimate a discrete choice model for consumer demand, then incorporate these estimates into a dynamic model for investment and entry. I use this model to evaluate the welfare effects of competition policies. Counterfactual analysis shows that a 20% reduction in entry costs leads to more hotels and lower prices; however, investments decrease by 13%, and thus the overall average quality of hotels decreases. This indicates that consumers may not actually benefit from more competitive market structures.

Shirking with Good Reputation? Evidence from Hotel Industry

This paper empirically examines the impact of online reputation on investment in hotel industry. Recent theory suggests that reputation could have ambiguous effects on investments. Using detailed firm-level data on investment expenditures, and online consumer ratings from Taiwanese hotels, I adopt a regression discontinuity design based on TripAdvisor’s rating display system and identify treatment effects. The regression discontinuity estimates show that that higher ratings negatively impact investment expenditures while lower ratings tend to encourage investment. The findings are consistent with Board and Meyer-ter-Vehn (2013), in which their good news model predicts that firms shirk when they have good reputation.

The Impact of Sharing Economy: New Evidence from Airbnb in Taiwan (with Hsin-Hsi Shih)

We investigate the impact of Airbnb on incumbent hotels’ revenue in Taiwan. Combining listing information scraped from Airbnb website with a panel of hotel revenues, we propose a novel set of instrumental variables to identify the casual impact. Relative to OLS estimate, IV-2SLS estimates indicate larger negative effects from Airbnb. Furthermore, smaller and lower quality hotels are heavily affected by Airbnb listings.

The Impact of Volkswagen Dieselgate on the Taiwanese Automotive Market (with Liang-Hong Shu)

We investigate the effects of 2015 Volkswagen diesel emissions scandal in the Taiwanese new car market. Using a difference-in-differences empirical strategy and administrative data on new car registrations, we find that quarterly sales of Volkswagen fell by more than 20% in self-use market. But sales of Volkswagen quickly recovered after one year. In B2B market, business buyers did not respond to the emissions scandal. For collective reputation, we do not find evidence of spillovers to other German brands, indicating that environmental concerns in Taiwan did not extend to other brands within the same country.