Chapter 1 ---Does the party of government influence the amount and type of inward foreign investment? The results of a number of correlational studies provide inconsistent evidence. However none of these studies - for any level of government or any jurisdiction - have used methods that allow them to speak to causal effects. Regression discontinuity (RD) method is applied to a set of narrow-margin US gubernatorial elections. Over the course of a four-year term the election of a Republican governor causes a 21% boost in the growth of manufacturing-oriented FDI stock, compared to a Democrat. This effect is robust to a series of challenges. However, the same approach provides no evidence that partisanship matters for the overall level of FDI. Chapter 2 ---Does an economic shock open a window of opportunity for reform, and if it does, how does the institution of a state play a role? The paper investigates how economic shocks affect the structural reforms in various institutions. This paper addresses this issue by using the exogenous variation in the international price of large commodity goods to generate the exogenous change in national income. The analysis relies on a unique mapping between new annual data from 1962 to 2005 on economic shocks from commodity prices and structural reforms in 111 countries. I find significant heterogeneous effects across sectors in autocratic countries. In autocracies, positive economic shocks promote reforms in real sectors, but deter reforms in financial sectors. However the impact of economic shocks on structural reform in democratic countries is nil. Chapter 3 ---The deregulation of branch banking across the United States substantially increased the availability of credit to existing borrowers and others who has previously been excluded. Exploiting the staggered timing of changes across states for identification it is estimated that deregulation caused a 3.3% increase in rates of suicide and a 4.7% increase in rates of divorce. This is consistent with a large body of evidence linking excess debt to various measures of individual and relationship distress. Results are in most cases statistically significant at levels much higher than 1%, and prove resilient in a battery of robustness checks and falsification exercises.

In Chapter 1, the staggered nature of the adoption of interstate bank branching deregulation in the United States is utilized as an exogeneous shock to investigate the managerial incentives involved in corporate socially responsible (CSR) activities. Using Kinder, Lydenberg, and Domini Research & Analytics, Inc. for our CSR measures, we find a significant negative relation between the extent of deregulation and CSR practices, which implies that deregulation-led rising competition in product market makes the non-financial firms more concerned about protecting interests of shareholders than other stakeholders. Specifically, firms with low pricing power tend to significantly reduce their CSR activities. Our results are robust using alternative empirical specifications and CSR measures. Chapter 2 investigates the interaction between price stability and financial stability for “Fragile Five” countries. In the first step, we investigate the causation linkage between price stability and financial stability indicators. In the second step, we analyze the effect of financial stability instruments, lending rate and required reserve ratio, on price stability. We then test the price stability instrument policy rate on financial stability. Empirical findings, in the first step, indicate that there is no meaningful relationship between policy objectives in the short run, while the relation between financial stability and price stability occurs in the longer time frequencies. However, the situation is not valid for all economies. In the second step, we measure the effects of monetary policy tools employed by the central bank of each of the Fragile Five countries. The findings from the analysis that investigates the effects of each policy instrument imply that the policy rate instrument implemented to achieve the inflation target does not affect the financial stability goal. Similarly, the reserve requirement ratio instrument to achieve the financial stability goal does not affect the price stability goal. On the other hand, results give some implication about the negative effects of the lending rate instrument on the inflation targeting objective.

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