This file contains replication material for both theoretical model and empirical part.

Model part:

There are 2 dynare codes and 1 online technical appendix.

Model.mod is used to generate the simulation results of Table 1 of the paper.
Model_alternative.mod is used to generate the simulation results for the model with alternative constraints in the technical appendix.
red_linyeshi_appendix is the online technical appendix, which discuss the analytical mechanism and the model with alternative constraints.

The mod codes are run at dynare (matlab) software 4.43 and matlabR2010a. The estimated computing time is less than 1 minute.


Empirical part:

There are 3 stata datasets and a stata code file for producing Figures 1-3 and Tables 2-8 of the paper.

Dataset aggregate.dta is used to produce Column (1) of Table 2.
Dataset exportersector.dta is used to produce Column (5) of Table 4
The main dataset, data.dta, is used to produce all figures and other regression results.
statacodes.doc contains Stata codes for producing Figures 1-3 and Tables 2-8.

Software and oprating system used for generating Figures 1-3 and Tables 2-8: Stata 15 MP (64bit).
Each regression takes about 15-20 minutes to run, but those in Talbe 7 take substantially longer machine time.
Total estimated machine time for generating Figures 1-3 and Tables 2-8 is about 7-10 days depanding on speed.