Prof. Xiao received Ph.D. from University of Toronto. He is an economist with research interest in the fields of empirical industrial organization, environmental economics and China economy. His recent work has focused on the Chinese automobile industry and explored such topics as the competition structure, the welfare effect of environmental policies and the vertical restraints of this industry. Before joining UTS Business School, Prof. Xiao taught at the Chinese University of Hong Kong, Fudan University and Shanghai University of Finance and Economics respectively. He was awarded the German DFG Fellowship in 2001 and Hong Kong RGC grant in 2016.
Empirical Industrial Organization, Environmental Economics, Health Economics, Marketing
Empirical Industrial Organization, Microeconomics, Econometrics
Tan, J, Xiao, J & Zhou, X 2019, 'Market equilibrium and welfare effects of a fuel tax in China: The impact of consumers' response through driving patterns', Journal of Environmental Economics and Management, vol. 93, pp. 20-43.View/Download from: UTS OPUS or Publisher's site
© 2018 Elsevier Inc. We investigate the market equilibrium and welfare effects of a fuel tax in China relative to an alternative policy instrument that rations the number of new automobile sales through auctioned quotas. Unlike those of previous studies, our modeling approach incorporates both household car purchase and utilization decisions, the latter of which have been ignored in previous studies on China's fuel tax. Ignoring this margin of choice will underestimate the fuel tax's ability to mitigate externalities. Using detailed household-level panel data and a fixed effects econometric specification, we estimate the fuel price elasticity of vehicle miles traveled is 0.59 on average. The results of the counterfactual analysis suggest that a 51% increase in tax-inclusive gasoline prices will reduce car sales by 24.9% but increase social welfare to a degree that depends on vehicles' lifetime. We find that compared to auctioned quotas, the fuel tax results in greater car sales but higher social welfare.
Lu, Q, Pattnaik, C, Xiao, J & Voola, R 2018, 'Cross-national variation in consumers' retail channel selection in a multichannel environment: Evidence from Asia-Pacific countries', Journal of Business Research, vol. 86, pp. 321-332.View/Download from: UTS OPUS or Publisher's site
© 2017 Elsevier Inc. This study examines the impact of cross-national variation in culture on the selection of retail channels in a multichannel environment in eight Asia-Pacific countries. In contrast to the prior literature, which examined the intention to purchase through online channels, we study the actual purchase decisions made by consumers by comparing online and telephone channels. We adopt Hofstede, Hofstede, and Minkov's (2010) six cultural dimensions (power distance, uncertainty avoidance, individualism/collectivism, masculinity/femininity, long vs. short-term orientation, and indulgence vs. restraint) to examine the impact of cross-national variation in culture on online vs. telephone retail channel selection. The empirical findings suggest that countries with high uncertainty avoidance and long-term orientation are less likely to adopt online channels rather than telephone channels, whereas countries with high individualism, high masculinity, and high indulgence are more likely to adopt online channels. These findings highlight the importance of cross-nation al variation of culture on retail channel selection.
This article presents a welfare analysis of the vehicle quota system of Shanghai, China. The empirical findings suggest that the quota system leads to both welfare loss as a result of reduction in vehicle transactions and welfare gain because of less externality of auto consumption. The net effect depends on the shadow price of the marginal externality, the assumption of vehicle lifetime, and market conditions such as consumers' intrinsic preference for vehicles. Compared to a progressive tax system, the quota system is less effective in vehicle control but more efficient in improving social welfare.
Xiao, J & Ju, H 2016, 'The determinants of dealership structure: Empirical analysis of the Chinese auto market', Journal of Comparative Economics, vol. 44, no. 4, pp. 961-981.View/Download from: Publisher's site
© 2016 Association for Comparative Economic Studies This paper investigates the factors that affect manufacturers' decisions to grant local monopoly to a dealer and the factors that determine the dealer's status of sole dealership in the Chinese automobile market. Our empirical findings suggest that manufacturer decisions depend on dealers' retail network: manufacturers are inclined to choose a sole dealer for their brands if that dealer also has retail outlets for substitute brands in the local market and to choose multiple dealers otherwise. These findings can be explained by the theory proposed by [Mathewson, G. F., Winter, R. A., 1994. Territorial restrictions in franchise contracts. Economic Inquiry 32 (2), 181–192.], who suggest that manufacturers transfer the exclusive right of resale from themselves to dealers only if dealers' contribution is crucial to the vertical relationship. When dealers also have extensive retail channels for other brands, their retail efforts and experience become crucial to brand success, and thus manufacturers are more likely to offer them sole resale rights. Moreover, our empirical findings suggest that manufacturers also consider product quality and market conditions when making their decisions.
The automobile market in China has seen unprecedented expansion during the past decade with rapid model turnover and dramatic price decline. This paper aims to document the evolution of price and investigate the sources of price decline, paying attention to both market structure and cost factors. We estimate a market equilibrium model with differentiated multiproduct oligopoly using marketlevel sales data in China together with information from household surveys. Our counterfactual simulations show that (qualityadjusted) vehicle prices have dropped by 33% from 2004 to 2009. The decrease in markup from intensified competition accounts for about one third of this change and the rest comes from cost reductions through learning by doing and other channels. In addition, our simulations show that the price decline would have been larger had it not been for the growth of household income during this period.
Hu, WM, Xiao, J & Zhou, X 2014, 'Collusion or competition? Interfirm relationships in the chinese auto industry', Journal of Industrial Economics, vol. 62, no. 1, pp. 1-40.View/Download from: Publisher's site
The Chinese passenger-vehicle industry contains a large number of manufacturers. Some of them are members of big corporate groups centered around state owned enterprises. These corporate relationships may facilitate collusion. This paper applies the non-nested hypothesis test methodology to data on passenger vehicles to identify whether price collusion exists within corporate groups or across groups. Our empirical results support the assumption of Bertrand Nash competition in the Chinese passenger-vehicle industry: We find no evidence for within or cross-group price collusion. Our policy experiments show that indigenous brands will gain market shares and profits if within-group companies merge. © 2014 The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd.
Xiao, J & Ju, H 2014, 'Market equilibrium and the environmental effects of tax adjustments in China's automobile industry', Review of Economics and Statistics, vol. 96, no. 2, pp. 306-317.View/Download from: Publisher's site
This paper explores the effects of consumption-tax and fuel-tax adjustments in the Chinese automobile industry. Applying the model and simulation method of Berry, Levinson, and Pakes (1995), we conduct a comparative static analysis of equilibrium prices and sales, fuel consumption,and social welfare before and after tax adjustments. For the first time, we compare the progressivity of both taxes. Our empirical findings suggest that the fuel tax is effective in decreasing fuel consumption at the expense of social welfare, while the consumption tax does not significantly affect either fuel consumptionor social welfare. © 2014 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Wei, L & Xiao, J 2013, 'Are points like money? An empirical investigation of reward promotion effectiveness for multicategory retailers', Marketing Letters, vol. 26, no. 1, pp. 99-114.View/Download from: Publisher's site
© 2013, Springer Science+Business Media New York. Point-based frequency reward programs are widely used by retailers as a sales promotion strategy. To promote a specific product category, retailers offer more favorable reward ratios so that members can earn extra points. This paper examines the impact of reward ratio variations on sales in a multicategory setting and compares the effectiveness of the reward and price promotion strategies. We estimate a multivariate probit model using scanner data of member purchases in four categories, grouped into two category pairs. We found that increasing the reward ratio in a category positively affected its choice probability and that the presence of rewards promotions also had positive impact on the choice probability of nonpromoted but closely related category within the same category pair. As forms of sales promotion, price discounts and reward promotions were shown to substitute for each other. We constructed and computed a measure, the rate of substitution, to quantify the effects of substitution. The financial implications of holding reward promotions are computed and discussed.
Wei, L & Xiao, J 2012, 'Factors affecting the take-off of innovative technologies: Evidence from digital cameras', Applied Economics, vol. 44, no. 32, pp. 4143-4152.View/Download from: Publisher's site
While technological innovations are important for many industries, takeoff sales for innovative products can have long lead times due to a variety of factors. This article identifies the main parameters affecting digital camera take-off sales in the US between 2001 and 2004. The study constructs an empirical model for film and digital camera shipments and finds that digital cameras primarily served as a substitute for low-end film compacts rather than high-end film Single-Lens Reflex (SLR) cameras. Also, growth in household PC ownership and Windows XP market share were the main contributing factors to the decline of film cameras, with PC penetration rate as the most important factor for digital camera diffusion. © 2012 Taylor & Francis.
This paper examines the model launch and withdrawal decisions of the major digital camera makers for the period 1996-1999. These manufacturers produce differentiated products and some have the experience of participating in a similar market-the film camera market. This paper investigates to what extent the following four factors affect firms' decisions to launch a new model of digital camera: the effects of competition with "within-brand" models; the effects of competition with "cross-brand" models; the level of experience in the film camera market; and market conditions. The empirical findings suggest that good market conditions can accommodate more products, which has a positive effect on product launches. On the other hand, existing cross-brand models have a negative effect on product launches, while within-brand models and experience in similar markets have an ambiguous effect on product launches. © 2008 Elsevier B.V. All rights reserved.
This paper examines the characteristics attributed to the success of digital cameras by studying both the demand and the supply sides of the digital-camera market. A discrete choice model is employed to investigate consumer preferences over digital camera characteristics during the period 1996-1998. The empirical findings reveal that Sony's 'Easy-to-Use' storage system contributes significantly to Sony's demand advantage and profitability. Also, the welfare analysis demonstrates that 'Easy-to-Use' attributes significantly contribute to social welfare improvement. © Springer Science + Business Media, LLC 2008.
This paper proposes a method to analyze how the manufacturers make product launch decisions in a multi-product oligopoly market, and how the heterogeneity in their products affects the manufacturers' decisions on model launch and withdrawal. © 2007 Higher Education Press and Springer-Verlag.