The following thesis presents the results and analysis of three distinct experiments. The first features an experimental auction market designed to resemble eBay and other such peer-to-peer markets, including the presence of a reputation mechanism. The results presented suggest that the presence of a reputation mechanism will improve consumer welfare. Further, having a greater number of possible feedback ratings available leads to even further improvements in consumer welfare. The second features a repeated auction that also involves Bayesian uncertainty, about the 'type' of the seller. In addition, we present the predictions of a theoretical model that extends the existing sequential equilibrium literature into multi-player, market-based games. We find that reputational concerns remain an important consideration in such settings. The final experiment examines the role of within group heterogeneity (in the endowment and marginal return) in public goods games. The novel experimental designed allows for a full schema of relationships between the endowment and marginal return. The results presented suggest that there are significant behavioural differences depending on the relationship between the endowment and marginal return. When they are inverse, subject’s absolute contributions are not different. When the two are proportionally related, relative contributions are not different.

The aim of this PhD research is to address the role of Technology Orientation (TO) and Entrepreneurial Marketing (EM) in new firms within the energy service industry. It mainly focuses on how Entrepreneurial Orientation (EO), Market Orientation (MO) and TO (inclusive of digitally enhanced marketing activities) contribute towards young firms' EM performance. The Technology Entrepreneurship Marketing and Performance (TEMP) model is conceptualised and developed using extant theory and mixed qualitative methodologies including semi-structured interviews and observational web-based research. Findings identified several themes identified in earlier EM literature and five new emerging themes that offer insights into the potential relationship between EO, MO and traditional (administrative) marketing and digital marketing. From this, the research conceptualises technology driven marketing techniques as being a significant part of a firm's TO and this implicitly compliments the entrepreneur's ability to market the firm, products and services to customers. Implications include the implicit value of a combined EM approach which includes TO, and widening the research agenda to include new policy driven SMEs in 'green' technology industries.

This research advances an integrative approach to examining the complex interplays between various internal and external determinants to the firm, in order to provide a fuller understanding of the international performance of firms. Specifically, this research aims to enrich our understanding of the role of entrepreneurial orientation (EO) in driving the international performance of small- and medium-sized enterprises (SMEs). For this purpose, the research integrates the resource-based view (RBV) with the institutional perspective to explicate the dynamic interactions among EO - a core firm-specific resource - and two institutional factors, i.e. cultural dimensions and government regulations in explaining the international performance of SMEs. The research conceptualises and examines four core sets of associations that relate to: i) EO and international performance of firms; ii) cultural dimensions and EO; iii) government regulations on the association between EO and international performance; and iv) government regulations on the association between cultural dimensions and EO. The study employed a quantitative research method and conducted a large-scale, self-administered questionnaire survey in Malaysia. The statistical analysis of data of 203 internationalised SMEs confirms the positive impact of EO on the firms’ international performance. Moreover, analyses provide evidence of the association of cultural dimensions of high individualism, high masculinity and low uncertainty avoidance with EO; and of the premise that government regulations positively moderate the individualism-EO and masculinity-EO relationships. The incorporation of the RBV and the institutional perspective offers a fuller explanation of the international performance of SMEs. Specifically, it advances understanding of the importance of EO - a critical resource for firms, whose manifestation and strength are influenced by institutional factors - in the internationalisation of firms. The research also contributes to the institutional perspective in two ways. First, the focus on the macro institutional factors based on a micro perspective reflected through the perception of the key decision-maker advances the understanding of the entrepreneurship phenomenon. It explains that how firms perceive and respond to the institutional context within which they are embedded will, in turn, prompt the responding entrepreneurial behaviours and subsequently affect international performance. Second, it explicates the interacting and reinforcing effect of cultural dimensions and government regulations, which are an informal and a formal component of institutions, on the genesis of EO. Significant practical implications are derived accordingly for business practitioners and policy makers to promote SMEs’ international business development and growth.

This thesis presents an exploration of how biases stemming from the use of heuristic-‐based reasoning processes influence the internationalisation decisions made by the leaders of Small and Medium-‐Sized Enterprises (SMEs). Three types of internationalisation decisions are specifically addressed in this thesis, namely foreign market selection, entry mode and foreign market exit. The empirical context is that of Scottish SMEs from three main industries, namely Environmental and Recycling, Oil and Gas, and Textiles. Each of the case firms is involved in value-‐adding activities across national borders. The theoretical context is that of internationalising SMEs. The thesis draws on three main strands of the internationalisation literature: the Transaction Cost Approach, the Process Theory of Internationalisation and the International New Venture (INV) approaches. In investigating the decisional processes involved in internationalisation, the thesis takes a Bounded Rationality stance and assumes the use of Heuristics-‐based reasoning (Tversky and Kahneman, 1974) in internationalisation decisions. The level of analysis is the individual decision maker within the internationalising firm. The unit of analysis is the internationalisation decision, which is explored from a reasoning process perspective. A case study strategy is used. Data collection tools are semi-‐structured interviews and repertory grid elicitation. The data is analysed inductively through the construction of causal-‐cognitive maps. Findings show that heuristics are a useful tool to explain the reasoning processes employed in internationalisation decisions. The contribution that this thesis makes to extant literature on the internationalisation of smaller firms is threefold. Firstly, the thesis outlines the processes involved in an array of internationalisation decisions (country selection, entry mode, exit decisions) underpinning the cross-‐national border behaviour of firms. Secondly, by observing the processes of decision-‐making through a cognitive lens, the thesis contributes to the emerging cognitive approach in internationalisation. Thirdly, the thesis contributes to the literature on international entrepreneurial experience by explaining how experiential and vicarious knowledge are leveraged and used in the process of internationalisation decision-‐making. III Propositions are advanced and further research is invited to progress current understanding of the making of internationalisation decisions in SMEs.

The thesis examines advertising behaviour and quality-setting behaviour at the firm level. In both cases economic theory is used to discover theoretically optimal behaviour patterns which may then be compared with the behaviour patterns exhibited by firms operating in the real world. The 'neoclassical' economic model of advertising is reviewed and a general version embodying the 'marketing mix' concept is developed. Possible means of testing for optimal advertising behaviour at the firm level are discussed. The usual method of testing for optimal advertising behaviour was shown to rely on a method which provided no information about the behaviour of firms, the usual test relies on a 'snapshot' comparison of values of the firm's discretionary variables and parameters of the demand function facing the firm. An alternative method of testing is developed the use of a stock-adjustment approach in conjunction VJith an loptimality rule' allows the construction of a test which views firms' behaviour. The test is applied to advertising data for the five major U. K. motor manufacturers during the period 1958-68. The 'quality' problem is analysed at the model or variety level. The problem of defining 'quality' is discussed, and it is suggested that if 'quality' is suitably defined there will be a useful relationship between the prices and 'qualities' of a varieties of a given product. The possible theoretical bases a price-quality relationship (and hence the 'Hedonic' technique) are analysed and shown to indicate different forms for the price-quality relationship. Appropriate methods of estimating the price-quality relationship are suggested. A model of variety demand allowing for quality differences by incorporating the residuals from the estimated price-quality relationship in the demand function is proposed. Price-quality relationships and demand functions are estimated using data for U.K. passenger cars.

Although the ‘endogenous growth’ theory links macroeconomic growth to firms’ R&D, still, there is no comprehensive and conclusive research showing how undertaking R&D affects individual firm performance. Using several market indicators such as size, exports and productivity, this study provides a valuable input in the UK context by analysing a panel of 956 firms during 2003/4 – 2013/14, employing an empirical approach. We find no significant relationship between a firm’s R&D stock of knowledge and its size (measured in terms of both absolute size and size relative to its industry) across ‘All-Firms’ dataset as well as a subset of only highly innovative firms. Employing the Generalised Structural Equation Modelling, we evidence two-way causality between a firm’s R&D stock of knowledge and its exports, both positively affecting each other, depending on firm productivity. In line with Bravo-Ortega et al. (2013), we find that at a firm-level, R&D stock of knowledge affects productivity by two channels; directly and indirectly through export levels. However, we find no evidence of ‘selection’ bias in both export and R&D activities. Contrary to the ‘learning by exporting’ hypothesis, we evidence a negative relationship between a firm’s labour productivity and its export intensity (running in both directions).

This thesis aims at providing rigorous micro-foundations for explaining detailed firm and product level trade flows. In this research I investigate the mechanisms by which firms break into foreign markets and the impact of “\(entry\)” on \(growth\), \(further\) \(entry\) and \(exit\), as well as the potential biases when measuring the export growth of firms using annual data. Specifically, I introduce Quarter-Year, Month-Year and Week-Year estimations and examine whether there are certain countries that act as launch pads for Argentinean firms to target exports. My results provide an accurate measure of export growth and have implications for trade policy. I introduce the concept of “trade liberalisation externalities” whereby bilateral trade liberalisation can lead to an expansion of trade to third countries via the process of sequential exporting. This research also deals with the relationship between exporting, importing and product quality.

Unprecedented movements in real exchange rates during the 1980s led to suspicions of instability in the exchange rate - trade relationships in the UK and elsewhere. 1be research in this thesis investigates the sensitivity of UK trade volumes to movements in the real exchange rate, and considers various interpretations of the alleged parameter instability: econometric misspecification; theoretical inadequacy due to the neglect of possible hysteresis effects and/or the neglect of supply side factors; and the Lucas critique effects of a changed policy regime on expectations formation. Against the background of UK experience we examine specific questions of theory and evidence within partial equilibrium frameworks. These share a common concern: considering the (macro economically important) case of mean reversion in real exchange rate expectations. Clapters two and three introduce mean reversion into Dixit's (1989a) theory model of sunk cost hysteresis in trade. This research uses both analytic and numerical methods to characterise solutions with mean reversion in greater detail than elsewhere and uncovers some striking and unexpected results. Most important is the possible reversal of the stochastic and perfect foresight triggers under asymmetric sunk costs which reflects the essential difference between costly reversibility and strict irreversibility in investment Uncertainty does not always delay action, because the possibility of reversal must be allowed for. Chapter four explores the wider significance of the analysis for similar stochastic saddlepoint models such as the analysis of exchange rate target zones. Chapters five and six consider the significance of the short run dynamic specification of quarterly UK manufactured export volumes equations to the reported instability in estimates of the long run competitiveness elasticity in the light of evidence that UK competitiveness measures follow stationary processes within an institutionally identified policy regime. Hausman specification tests, show that the long run competitiveness elasticity is misspecified and underestimated in recent (error correction mechanism) specifications of UK manufactured export volume equations. This inadequacy reflects the omission of long 'smoothing' lags on the competitiveness variable Subsequently, chapter seven considers simulation evidence from the Dixit model as to the potential relevance of such effects to the UK experience under the large shock to competitiveness of 1980-1 but emphasises that the aggregate implications are not clear cut chapter eight considers whether the expectational effects of the 1979 Thatcher government's change in policy regime can be separated out from the other influences at work behind reduced form models but finds that the data do not support the particular approach adopted. Concluding. we emphasise that the potential importance and complexity of expectational factors and theory combines with the our empirical findings to suggest that exchange rate uncertainty may be crucial to trade behaviour and that macroeconomic adjustment may be inhibited by excess exchange rate uncertainty. Overall export performance may also reflect supply factors which are not captured in existing models, such as hysteretic exit. or expected cost changes. But we doubt whether future research will achieve a data consistent aggregate econometric model of UK trade which is fully grounded in appropriate optimising economic theory with realistic adjustment costs. We may have to settle for approximations to the data generation process which do not employ recent theoretical insights. In that event. the use of such models in policy design should be circumscribed due to the possibility of Lucas critique effects, hysteresis mechanisms and supply side factors.

The empirical literature in international macroeconomics and finance reveals a growing interest in the use of nonlinear models. Their attractiveness is clear, as these models allow capturing discontinuity in the data-generating process and, by estimating endogenously transition probabilities and variables, avoid the a priori identification of regimes and their timing, thereby enhancing the extent of flexibility in the analysis. This thesis makes use of nonlinear techniques in order to model two different economic issues, which have been at the centre of the economic debate in the last years. The first analysis refers to the issue of debt sustainability and, in particular, tries to test empirically some of the leading interpretations that have been advanced to account for the financial turmoil that characterised the run-up to the Brazilian presidential elections in 2002. We test for financial contagion from the Argentine crisis and the impact of factors including IMF intervention and political uncertainty in raising the probability of crisis. The empirical investigation employs a Markovswitching model with endogenous transition probabilities. The second part of the thesis is devoted to the analysis of current account imbalances in G7 countries. We find evidence of threshold behaviour in current account adjustment, such that the dynamics of adjustment towards equilibrium depend upon whether the current-account/ net-output ratio breaches estimated country specific current account surplus or deficit thresholds. Both the speeds of adjustment and the size of the thresholds are found to differ significantly across countries. We complement the univariate analysis by disentangling the domestic components of the current account according to the national income identity with a view to shed light on the role of savings (both public and private) and investment. Evidence of shifts in means and variances of exchange rate changes - that coincide with the current account adjustment regimes identified by the model - suggest scope for further research on the role of the real exchange rate in determining the nonlinear behaviour of the current account. We extend the threshold methodology to a bivariate context and find evidence of a strict link between current account adjustments and deviations of a country real exchange rate from its long run equilibrium, such that beyond a certain appreciation/depreciation of the real exchange rate, a country CA imbalance would start reverting towards its mean value. Finally, we run a nonlinear test of the present value model of the current account, encouraged by the evidence of nonlinear adjustment in the current account. However, in line with the literature, we reject the test for all countries also in this new nonlinear framework.

This dissertation consists of the three essays; in these three essays I study different areas of trade integration among Gulf Cooperation Council Countries (GCC) by examining the effect of GCC Free Trade Agreement (GCC FTA) on trade among GCC countries during the 1983-2010 period. In the three essays, different variations of the gravity model of international trade are applied to a set of bilateral trade flows among 54 countries representing GCC countries and their major trade partners during the 1978-2010 period. The first essay is presented in chapter two, where I investigate the effect of GCC FTA on aggregate trade among GCC countries. The findings of chapter two suggest that GCC FTA has resulted in trade creation among GCC countries during the 1983-2010 period. The second essay is presented in chapter three, where I investigate the effect of GCC FTA on intra-industry trade among GCC countries. Investigating GCC FTA effects for disaggregate trade is important, as the aggregate results may suffer from aggregation bias. Also, it helps identify the sectors that benefit more from GCC FTA which is an important issue for GCC countries that are seeking diversification of their economies. Chapter three results suggest that GCC FTA trade creation was more concentrated in sectors that exhibit lower shares of GCC intra-trade during the 1983-2010 time period. The third essay is presented in chapter four where I investigate whether GCC FTA trade creation/destruction effect (aggregate and intra-industry trade) among GCC countries was attributed mainly to new trade relations (extensive margin) or to existing trade relations (intensive margin), and whether GCC FTA led to an increase in new trade relations among GCC countries. Chapter four results suggest that GCC FTA trade creation is attributed mostly to trade along the intensive margin while GCC FTA has a negative effect on trade along the extensive margin for most trade sectors. Overall, the results of the three essays suggest that trade integration among GCC countries is not very deep. Although GCC FTA is effective at the aggregate level, however GCC FTA failed to promote trade among GCC countries in larger intra-trade industries and failed in creating trade in new products among GCC countries. GCC countries have plans for a unified currency, since a unified currency requires deeper levels of economic integration than those needed for an FTA, the shallow level of trade integration maybe a sign that GCC economies are not yet ready to adopt a unified currency.