A inovação é reconhecida como o processo de renovação da firma, garantindo sua sobrevivência e sucesso. Devido ao ambiente constantemente em mudança, na era digital, as empresas exigem inovação tecnológica e resposta gerencial para se manterem competitivas. Embora, combinar e recombinar todos os recursos não é uma tarefa fácil. Em um mundo ideal e utópico, uma empresa seria composta por trabalhadores com conhecimentos iguais e completos sobre todas as operações, métodos, processos e técnicas das atividades da empresa. A crescente onda de empresas que cooperaram trouxe sucesso a algumas empresas, mas não a todas. Estudos como os de Nesheim (2015), Chatterji (2014) e Mina (2014) nos mostram que o conhecimento é complicado de se gerenciar e é comum que os pesquisadores identifiquem um conhecimento obtido de origem externa preso em certas unidades. Os autores argumentam que esse fenômeno pode acontecer devido a aspectos comportamentais, mas também devido a padrões de processo ou organizacionais. Do ponto de vista intra-firma, Paruchuri (2010) argumenta que uma empresa que melhore a difusão do conhecimento internamente ira aprimorar sua atividade inovadora. Aalbers (2015), refletindo sobre a governança do compartilhamento de conhecimento dentro das organizações, sugere que o conhecimento pode ser difícil de transferir por causa da dinâmica das interações. Essas dinâmicas podem criar uma relutância em compartilhar conhecimento com pessoas de outras unidades. Vários autores, como Hansen (1999 e 2002) e Cross (2003 e 2004) argumentam que os pesquisadores, em grande parte, que se concentraram no fluxo de conhecimento dentro de uma empresa, têm focado apenas nos indivíduos, independentemente da sua posição na organização, e acabam muitas vezes ignorando os limites das unidades da empresa, como possíveis obstáculos para que o conhecimento seja transferido. Devido a esta dinâmica, centrada na inovação, é importante criar novas formas de analisar e desenvolver as atividades da empresa, visando aprimorar seu desempenho e compreender melhor os facilitadores de soluções para que se gere inovação. Portanto, surge a questão da pesquisa: Como as empresas podem gerenciar interações intra-firma para melhorar as atividades inovadoras? Assim, este trabalho tem seu núcleo nas interações intra-firma para fins de inovação. Em outras palavras, exploramos fatores-chave que podem nos permitir analisar melhor as atividades inovadoras da empresa em uma perspectiva intra-firma. O principal objetivo é apresentar os aspectos chave na coordenação intra-firma, baseada nas interações, capaz de melhorar o fluxo de conhecimento para a inovação dentro da empresa. Assim, elaboramos e realizamos um estudo qualitativo com 8 FAI (Firmas Altamente Inovadoras), 4 localizadas no Brasil e 4 localizadas na França. 11 Utilizamos as dimensões e os papéis de corretagem adaptados de Aalbers (2015), Tsang (2015) e Indarti (2010) para desenvolver um instrumento semiestruturado para as entrevistas. Analisamos as interações de um projeto de desenvolvimento de produto em cada empresa e as interações foram classificadas de acordo com: Hierarquia (Horizontal ou Vertical); Alcance (unidade ou unidade cruzada); Tipo (Formal ou Informal) e utilizamos a Intensidade (Frequência) como base para a análise. Nossos resultados demonstram três formas de coordenação intra-firma usadas pelas empresas em suas atividades relacionadas a inovação e um mecanismo específico para a gestão do fluxo de conhecimento com o uso das interações intra-firmas. A primeira forma teve a hierarquia como base para a estrutura organizacional utilizada no projeto, centralizando o controle das interações no coordenador da unidade de desenvolvimento. A segunda forma foi orientada para as interações, os indivíduos com alta posição hierárquica estavam conscientes da importância do fluxo de conhecimento para os processos inovadores. As interações foram centralizadas e depois descentralizadas, em um movimento de interações que seguia o fluxo baixo para cima e cima para baixo. A terceira forma foi chamada de Coordenação do Fluxo de Conhecimento, pois seguiu uma sequência de interações inter-unidades e intra-unidades, usando interações informais para reunir as informações e as interações inter-unidades verticais formais para divulgar a informação. Além disso, as empresas adotaram uma nova abordagem, única para suas atividades inovadoras, atribuindo uma pessoa designada para reportar as atividades aos altos gerentes em uma interação formal, mas coletando informações com o uso de ferramentas para interações informais. A dinâmica das interações teve mudanças relevantes nas empresas analisadas. O compartilhamento de conhecimento sempre deve ser promovido, mas sem destruir o foco na inovação. No entanto, se é mais proveitoso formalizar as interações para o trabalho de ideação ou tentar usar interações informais de maneira mais sutil é uma questão que cada empresa deve responder. Esperamos que o nosso estudo forneça insights importantes sobre a inovação nas empresas. A definição das tipologias de interações foi um primeiro passo e mostrar a coordenação intra-firma, em um desenvolvimento de inovação, pode ajudar as empresas a entender o poder que as interações têm para gerenciar os processos de compartilhamento de conhecimento. / Innovation is recognized as the process of renovation of the company, ensuring its survival and success. Although, to combine and recombine all these aspects is not an easy task. In an ideal and utopic world, a firm would be composed by workers with equal and complete knowledge about all the operations, methods, processes and techniques enrolled in the firm’s activities. To the intra-firm perspective, Paruchuri (2010) argues that a firm that can improve the diffusion of knowledge internally will enhance its innovative activity. Aalbers (2015), reflecting on the governance of knowledge sharing inside organizations, suggests that knowledge may be difficult to transfer because of the boundaries dynamics. Due to this dynamic, innovation centered, it is important to create new ways of analyzing and developing the firm’s activities, aiming to enhance its performance and to better understand solution enablers for the new challenges to come. Therefore, the research question emerges: How can firms manage intra-firm interactions to enhance the innovative activities? To answer this question, we designed and performed a qualitative study with 8 HIFs (Highly Innovative Firms), 4 located in Brazil and 4 located in France. We used the dimensions of interactions and brokerage roles adapted from Aalbers (2015), Tsang (2015) and Indarti (2010) to develop a semi-structured instrument for the interviews. We analyzed the interactions during a project of product development in each firm, and the interactions were classified according to: Hierarchy (Horizontal or Vertical); Reach (Unit or Cross-unit); Type (Formal or Informal) and we used Intensity (Frequency) as the base for the analysis. Our results of the firms’ intra-firm coordination for innovative processes showed us three different forms of intra-firm coordination and one specific mechanism for the intra-firm coordination. We hope that this thesis can provide insights to the innovation studies, defining the interactions was a first step and showcasing the intra-firm coordination, at a product development, might help the firms to understand the power that the interactions have to manage the knowledge sharing processes.

Preface: For anyone standing on the ridge of the Witwatersrand on a spring day in September 1886 the sight immediately to the south represented a hive of activity and hope. Nearly a hundred years later ample evidence stretches away on both sides of the watershed to confirm the fulfilment of those early sentiments. It is, nevertheless, all too easy to ignore the struggles and failures which marked the beginnings of the world's greatest gold field in the light of its subsequent abundant success. Only when attention is turned to the individual companies formed to exploit the discovery does the true picture emerge of the lack of adequate technological and managerial knowledge amongst the early pioneers and of the financial frailty of their companies. The object of this thesis is to shed light on these beginnings by reviewing the histories of four of the earliest companies established to work the main reef. The approach adopted is to scrutinize the material available with a view to determining the motivations and actions of the managements of the various companies with regard to their economic environment, whether within or without the individual company. Clearly, the availability of information is a major determinant of the success of any such venture and this was particularly so in the case of the companies considered. With the exception of the Barlow Rand Limited holding of the H. Eckstein and Company Archives, which offers an integral coverage of that firm's dealings with the emerging industry, and which is certainly the most comprehensive source of information available to the researcher, little material relating to specific gold mining companies has survived. Under these circumstances it was necessary to rely heavily for information on the local press. These newspapers proved an invaluable source in this regard. As a mining camp with a limited capacity for generating newsworthy incidents, the newspapers of early Johannesburg found an eager readership for information about the industry which lay at the heart of the community. For their part, the managements of the various mining companies found in the pages of the local press an outlet for intelligence both true and false; the press was a useful vehicle for the publication of directors' and annual reports to meet a wider audience, but similarly it could be and was used to disseminate 'spectacular' reports calculated to influence the status of a company's stock on the local share market. As a research source the press has thus to be approached with caution but its value, if the warning is heeded, is in no way diminished. Beyond these two sources the next most valuable accumulation of data on the early industry is "The Gold Fields Collection" housed in the Cory Library for Historical Research at Rhodes University. As a collection it is far from complete and it is to be hoped that the donors will in future see fit to augment it with further material as this becomes available. It neverthess proved an invaluable source for the investigation of at least one of the companies of the study and for a general background to the industry.

This dissertation investigates how competition among heterogeneous firms affects R&D in quality enhancement in a quality-ladder type framework for a Cournot oligopolistic industry. The research also analyzes the welfare implications of various policies that promotes R&D. Some of the theoretical predictions are then tested empirically using firm-level data for Bangladesh from the World Bank's enterprise survey. Chapter 1 shows that a rise in the cost of production of the competitor will induce a firm to invest more in R&D if and only if the quality difference between the existing product and the product emerging from R&D activities is sufficiently large. Also, welfare-reducing effect of helping a `minor' firm is lower in the presence of possible quality differences. Empirical results supports the theoretical findings. Chapter 2 shows that protecting domestic industry of high quality goods encourages firms to invest more in R&D. The size of the optimal tariff depends on the degree of product differentiation and market share of the foreign firms and is not necessarily positive. Chapter 3 shows that a small tariff imposed by the trading partner on the high quality good will deter R&D. However, as the tariff gets bigger, the relationship changes sign. The size of an R&D subsidy depends on the market share of the firms. Empirical results provide support to the theoretical findings.

abstract: Existing literature consistently documents a relationship between book-tax differences and future financial performance. Specifically, large book-tax differences are associated with lower earnings persistence. I contend that one reason the tax information contained in financial statements is informative about future earnings is that the relationship between book income and taxable income captures information about a firm's life cycle stage. Using a life cycle measure from the literature, I use fundamental analysis to group firm-year observations into life cycle stages and document a link between book-tax differences and firm life cycle. I build on prior studies that find a relation between earnings persistence and book-tax differences, and earnings persistence and firm life cycle. I find that after controlling for firm life cycle stage, the association between large positive book-tax differences and lower earnings persistence does not hold. My results offer an economic theory based explanation for the relation between book-tax differences and earnings persistence as an alternative explanation to findings in prior research. / Dissertation/Thesis / Ph.D. Accountancy 2012

Shareholders can utilize internal and external governance mechanisms to minimize agency costs. Internal governance mechanisms purport to improve the alignment between shareholders' interests and those of management by empowering the board of directors, setting value-maximizing compensation packages, employing leverage, and using other internal policies. Extensive discussion on corporate governance and regulations has motivated financial experts to conduct research on governance mechanisms and their relations to firm value. This study is focused on one particular aspect of corporate governance, which is executive compensation. Specifically, this study investigates executive compensation restrictions during the regulatory period and their effect on the performance of firms that received Troubled Asset Relief Program (TARP) funds. TARP is a U.S. government program intended to restore the U.S. economy by purchasing assets and equities from troubled institutions. This study is important since it showcases the efficacy of government regulations to revamp unsound executive compensation and governance practices. It also contributes to the governance and regulatory literature by showing whether the public and shareholders benefit from the compensation rules. Using a clean sample of 84 public TARP firms that received at least $50 million from the government, with the period of analysis from 2003 to 2010, I find that firm performance is positively and significantly related to total compensation as well as to both of its components, i.e., equity-based pay and cash-based compensation. However, the magnitude of the relationship between cash compensation and firm performance is much lower than that for equity-based compensation. Testing the pay-for-performance sensitivity in three sub-periods of analysis, the findings show that the relationship between executive compensation and firm performance was significantly positive in the pre-crisis period. However, during the financial crisis and the regulatory periods, this relation was not statistically different from that during the pre-crisis period. During the crisis period, TARP firms did not make necessary adjustments to executive compensation despite the fact that they had been faced with financial difficulties. I also find that the change in firm value is negatively and significantly related to the change in total compensation for TARP firms that have paid back their debts to the government by December 11, 2009, but this relation is less negative than that for TARP firms that have not repaid the bailout money.

A inovação é reconhecida como o processo de renovação da firma, garantindo sua sobrevivência e sucesso. Devido ao ambiente constantemente em mudança, na era digital, as empresas exigem inovação tecnológica e resposta gerencial para se manterem competitivas. Embora, combinar e recombinar todos os recursos não é uma tarefa fácil. Em um mundo ideal e utópico, uma empresa seria composta por trabalhadores com conhecimentos iguais e completos sobre todas as operações, métodos, processos e técnicas das atividades da empresa. A crescente onda de empresas que cooperaram trouxe sucesso a algumas empresas, mas não a todas. Estudos como os de Nesheim (2015), Chatterji (2014) e Mina (2014) nos mostram que o conhecimento é complicado de se gerenciar e é comum que os pesquisadores identifiquem um conhecimento obtido de origem externa preso em certas unidades. Os autores argumentam que esse fenômeno pode acontecer devido a aspectos comportamentais, mas também devido a padrões de processo ou organizacionais. Do ponto de vista intra-firma, Paruchuri (2010) argumenta que uma empresa que melhore a difusão do conhecimento internamente ira aprimorar sua atividade inovadora. Aalbers (2015), refletindo sobre a governança do compartilhamento de conhecimento dentro das organizações, sugere que o conhecimento pode ser difícil de transferir por causa da dinâmica das interações. Essas dinâmicas podem criar uma relutância em compartilhar conhecimento com pessoas de outras unidades. Vários autores, como Hansen (1999 e 2002) e Cross (2003 e 2004) argumentam que os pesquisadores, em grande parte, que se concentraram no fluxo de conhecimento dentro de uma empresa, têm focado apenas nos indivíduos, independentemente da sua posição na organização, e acabam muitas vezes ignorando os limites das unidades da empresa, como possíveis obstáculos para que o conhecimento seja transferido. Devido a esta dinâmica, centrada na inovação, é importante criar novas formas de analisar e desenvolver as atividades da empresa, visando aprimorar seu desempenho e compreender melhor os facilitadores de soluções para que se gere inovação. Portanto, surge a questão da pesquisa: Como as empresas podem gerenciar interações intra-firma para melhorar as atividades inovadoras? Assim, este trabalho tem seu núcleo nas interações intra-firma para fins de inovação. Em outras palavras, exploramos fatores-chave que podem nos permitir analisar melhor as atividades inovadoras da empresa em uma perspectiva intra-firma. O principal objetivo é apresentar os aspectos chave na coordenação intra-firma, baseada nas interações, capaz de melhorar o fluxo de conhecimento para a inovação dentro da empresa. Assim, elaboramos e realizamos um estudo qualitativo com 8 FAI (Firmas Altamente Inovadoras), 4 localizadas no Brasil e 4 localizadas na França. 11 Utilizamos as dimensões e os papéis de corretagem adaptados de Aalbers (2015), Tsang (2015) e Indarti (2010) para desenvolver um instrumento semiestruturado para as entrevistas. Analisamos as interações de um projeto de desenvolvimento de produto em cada empresa e as interações foram classificadas de acordo com: Hierarquia (Horizontal ou Vertical); Alcance (unidade ou unidade cruzada); Tipo (Formal ou Informal) e utilizamos a Intensidade (Frequência) como base para a análise. Nossos resultados demonstram três formas de coordenação intra-firma usadas pelas empresas em suas atividades relacionadas a inovação e um mecanismo específico para a gestão do fluxo de conhecimento com o uso das interações intra-firmas. A primeira forma teve a hierarquia como base para a estrutura organizacional utilizada no projeto, centralizando o controle das interações no coordenador da unidade de desenvolvimento. A segunda forma foi orientada para as interações, os indivíduos com alta posição hierárquica estavam conscientes da importância do fluxo de conhecimento para os processos inovadores. As interações foram centralizadas e depois descentralizadas, em um movimento de interações que seguia o fluxo baixo para cima e cima para baixo. A terceira forma foi chamada de Coordenação do Fluxo de Conhecimento, pois seguiu uma sequência de interações inter-unidades e intra-unidades, usando interações informais para reunir as informações e as interações inter-unidades verticais formais para divulgar a informação. Além disso, as empresas adotaram uma nova abordagem, única para suas atividades inovadoras, atribuindo uma pessoa designada para reportar as atividades aos altos gerentes em uma interação formal, mas coletando informações com o uso de ferramentas para interações informais. A dinâmica das interações teve mudanças relevantes nas empresas analisadas. O compartilhamento de conhecimento sempre deve ser promovido, mas sem destruir o foco na inovação. No entanto, se é mais proveitoso formalizar as interações para o trabalho de ideação ou tentar usar interações informais de maneira mais sutil é uma questão que cada empresa deve responder. Esperamos que o nosso estudo forneça insights importantes sobre a inovação nas empresas. A definição das tipologias de interações foi um primeiro passo e mostrar a coordenação intra-firma, em um desenvolvimento de inovação, pode ajudar as empresas a entender o poder que as interações têm para gerenciar os processos de compartilhamento de conhecimento. / Innovation is recognized as the process of renovation of the company, ensuring its survival and success. Although, to combine and recombine all these aspects is not an easy task. In an ideal and utopic world, a firm would be composed by workers with equal and complete knowledge about all the operations, methods, processes and techniques enrolled in the firm’s activities. To the intra-firm perspective, Paruchuri (2010) argues that a firm that can improve the diffusion of knowledge internally will enhance its innovative activity. Aalbers (2015), reflecting on the governance of knowledge sharing inside organizations, suggests that knowledge may be difficult to transfer because of the boundaries dynamics. Due to this dynamic, innovation centered, it is important to create new ways of analyzing and developing the firm’s activities, aiming to enhance its performance and to better understand solution enablers for the new challenges to come. Therefore, the research question emerges: How can firms manage intra-firm interactions to enhance the innovative activities? To answer this question, we designed and performed a qualitative study with 8 HIFs (Highly Innovative Firms), 4 located in Brazil and 4 located in France. We used the dimensions of interactions and brokerage roles adapted from Aalbers (2015), Tsang (2015) and Indarti (2010) to develop a semi-structured instrument for the interviews. We analyzed the interactions during a project of product development in each firm, and the interactions were classified according to: Hierarchy (Horizontal or Vertical); Reach (Unit or Cross-unit); Type (Formal or Informal) and we used Intensity (Frequency) as the base for the analysis. Our results of the firms’ intra-firm coordination for innovative processes showed us three different forms of intra-firm coordination and one specific mechanism for the intra-firm coordination. We hope that this thesis can provide insights to the innovation studies, defining the interactions was a first step and showcasing the intra-firm coordination, at a product development, might help the firms to understand the power that the interactions have to manage the knowledge sharing processes.

The increasing use of the internet has created a new opportunity for companies to disseminate different types of information to their current and potential investors via the internet. This type of voluntary disclosure, Corporate Internet Reporting (CIR), can improve the disclosure quality and the transparency to satisfy all users’ needs. Furthermore, corporate governance has attracted considerable global attention, especially after the collapses that have occurred in the financial markets. Recently, a growing interest has evolved in exploring corporate governance in emerging markets due to the increased demand for transparency by stakeholders. To provide new insights, this study aims to explore the extent of CIR, examine its relationship with some corporate governance and firm characteristics variables, and to determine the impact of CIR on firm financial performance. These associations are investigated by employing a quantitative method dependant on a multi-theoretical framework. The study uses a self-constructed disclosure index, which includes 196 items, to measure the CIR of 170 Saudi listed companies. The findings indicate that the level of CIR is, on average, moderate compared to their counterparts in developed countries. Further, the empirical results reveal that firms which are large in size, with low liquidity rate, distribute dividends, have board which is meet less frequently and have less independent members in the audit committee are more likely to have high CIR level. In addition, the results indicate that firm growth, leverage, industry type, audit type, board size, board independence, role duality, block holder ownership, directors ownership, institutional ownership, government ownership, audit committee size and audit committee frequency of meeting appear to be insignificant predictors for CIR total. However, the findings show that the significance of these variables varies among the CIR components: content, presentation, timeliness, usability and audit. Finally, it is statistically evident that CIR has no significant impact on firm financial performance in Saudi listed companies. These findings suggest that further effort is required to enhance the awareness of good corporate governance and that other variables may be more relevant to CIR in the Saudi context.

A complex adaptive systems approach has been permeating organizational studies and the field of supply network management helping to describe and explain supply network dynamics and emergent inter-firm structures. This has improved our theoretical knowledge of the nature of supply networks transforming raw materials into products, within a constantly changing environment. From the early days of simple structures, describing bi-lateral, local arrangements between firms for the creation of relatively simple products, we are now in an environment of various supply network archetypes, describing different global sourcing regimes of highly integrated, sophisticated products within multi-tier networks. This thesis is a study of the coevolution of the firm and supply network in the commercial aerospace manufacturing sector producing jetliners of 100 or more seats. One of the contributions of this research is to demonstrate how the holistic approach of complexity science can be applied to describe, understand and gain new insight into the coevolution of the firm and the supply network. Based on the findings of multiple interviews and questionnaires in eight global aerospace firms across multiple supply chain tiers, this research finds high-performing clusters of inter-firm characteristics, plus the aspects of structure and integration which deliver the supply network performance. Practitioners can use these specific results to examine their own firms and the new coevolutionary conceptual framework developed in the thesis may aid future research studies of complex adaptive systems in practice. The simple survey design and analysis method used in the final research stage of this research, has the potential for use in other industries, markets and other complex adaptive systems generally to examine performance outcomes and the effects of having or adopting new inter-firm characteristics. Finally, implications for policy include the potential to legitimize supply networks in order to stimulate competition and innovation in the economy.

Mae'r astudiaeth hon yn dadansoddi a dehongli hanes sefydlu Sianel Pedwar Cymru (S4C) fel sianel newydd yn nhirlun darlledu Cymru gan drafod, mewn manylder, gyfnod prawf y sianel rhwng 1981-1985. Mae'r astudiaeth yn archwilio paham yr oedd dirfawr angen sianel ar wahan ar gyfer rhaglenni teledu Cymraeg ac yn trafod sut aeth trigolion Cymru ati i'w hennill trwy ddulliau cyfansoddiadol ac anghyfansoddiadol. Prif ffocws y traethawd yw dadansoddi'r hyn a gafwyd yn dilyn yr ymgyrch hirhoedlog i sefydlu S4C, gan holi a sefydlwyd sianel a feddai ar y rhinweddau a ddeisyfwyd gan yr ymgyrchwyr. Mae'r astudiaeth yn ystyried y sialensiau a wynebwyd gan yr Awdurdod newydd, a chan swyddogion a staff y sianel wrth iddynt gynllunio a chyflwyno gwasanaeth teledu Cymraeg cynhwysfawr, y polisi'au a ffurfiwyd ganddynt a'r cydberthynasau a saemiwyd gyda'r BBC, HTV, Channel 4 a'r cynhyrchwyr annibynnol. Mae'r traethawd hefyd yn pwyso a mesur ymateb y gynulleidfa i'r gwasanaeth a'r rhaglenni ac yn ystyried sut yr aeth y Swyddfa Gartref ati i adolygu'r sianel ar ddiwedd ei chyfnod prawf ym 1985. Trwy gyfrwng ddadansoddiad manwl o gofnodion y sefydliadau darlledu ym Mhrydain, erthyglau o'r wasg a chyfweliadau gyda nifer o'r unigolion fu'n allweddol i fenter S4C, darlunnir sut y llwyddodd y sianel i newid tirlun darlledu Cymru yn llwyr. Bu'r partneriaethau unigryw a ffurfiwyd rhwng y sianel a'i chynhyrchwyr annibynnol a'r darlledwyr eraill yn fodd o gyflwyno bwrlwm newydd i'r diwydiant darlledu a'r arlwy cyfrwng Cymraeg, bywiogrwydd a fu'n allweddol i Iwyddiant y sianel gyda'i chynulleidfa yn ystod y cyfnod prawf Amlinellir hefyd sut y llwyddodd swyddogion y sianel weithredu strategaeth a wreiddiodd y sianel yn ddwfn yn ffyniant economaidd Cymru gan ei gwneud yn anodd os nad yn amhosibl ei diddymu wedi tair blynedd o arbrawf.

abstract: The dissertation consists of two essays in misallocation and development. In particular, the essays explore how government policies distort resource allocation across production units, and therefore affect aggregate economic and environmental outcomes. The first chapter studies the aggregate consequences of misallocation in a firm dynamics model with multi-establishment firms. I calibrate my model to the US firm size distribution with respect to both the number of employees and the number of establishments, and use it to study distortions that are correlated with establishment size, or so-called size-dependent distortions to establishments, which are modeled as implicit output taxes. In contrast to previous studies, I find that size-dependent distortions are not more damaging to aggregate productivity and output than size-independent distortions, while the implicit tax revenue approximately summarizes the effects on aggregate output. I also use the model to compare the effects of size-dependent distortions to establishments and to firms, and find that they have different effects on firm size distribution, but have similar effects on aggregate output. The second chapter studies the effects of product market frictions on firm size distribution and their implications for industrial pollution in China. Using a unique micro-level manufacturing census, I find that larger firms generate and emit less pollutants per unit of production. I also provide evidence suggesting the existence of size-dependent product market frictions that disproportionately affect larger firms. Using a model with firms heterogeneous in productivity and an endogenous choice of pollution treatment technology, I show that these frictions result in lower adoption rate of clean technology, higher pollution and lower aggregate output. I use the model to evaluate policies that eliminate size-dependent frictions, and those that increase environmental regulation. Quantitative results show that eliminating size-dependent frictions increases output by 30%. Meanwhile, the fraction of firms using clean technology increases by 27% and aggregate pollution decreases by 20%. In contrast, a regulatory policy which increases the clean technology adoption rate by the same 27%, has no effect on aggregate output and leads to only 10% reduction in aggregate pollution. / Dissertation/Thesis / Doctoral Dissertation Economics 2016