Prof. Heiwai Tang, Ph.D.

“Communication Costs, Direct Flights and International Trade”

In this CESifo Working Paper, Heiwai Tang and his co-authors build a general equilibrium model of endogenous communication, quality control and trade. They derive a structural gravity equation from the model and show that exogenous communication costs raise the costs of quality control and have a larger impact on products with a lower elasticity of substitution. In their empirical application, they estimate the impact of direct flight connectedness on communication costs using the gravity equation. They find that air connectedness increases trade, especially for products with a low elasticity.

Mr. Tang’s research interests span a wide range of theoretical and empirical topics in international trade, with a specific focus on production networks, global value chains, and China. His research has been published in leading journals in economics, including American Economic Review and Journal of International Economics. His research and opinions have been covered by BBC, Financial Times, New York Times, Al Jazeera, Foreign Policy, South China Morning Post, and various think tanks such as the Brookings Institution and the Peterson Institute for International Economics.
Heiwai Tang is Victor and William Fung Professor in Economics, Director of the Asia Global Institute and HKU APEC Study Center, as well as Hong Kong Institute of Economics and Business Strategy at the University of Hong Kong (HKU). Prior to joining HKU, he was tenured Associate Professor of International Economics at the School of Advanced International Studies (SAIS) of Johns Hopkins University. He is a CESifo Research Network Fellow. He is also affiliated with the Federal Reserve Bank of Dallas , the Kiel Institute for the World Economy and the Globalization and Economic Policy Center (UK) as a research fellow. He has been a consultant to the World Bank, the International Finance Corporation, the United Nations, and the Asian Development Bank; and held visiting positions at the IMF, Stanford, MIT, Harvard. He is currently an associate editor of the Journal of International Economics, the Journal of Comparative Economics and the China Economic Review. Heiwai Tang holds a PhD in Economics from MIT and a Bachelor of Science in Mathematics from UCLA.