Knowledge, learning, and innovation are vital elements in facilitating economic development and growth. Technological change, which is a synonym for generating knowledge, the diffusion thereof, and subsequent application in the marketplace in the form of novel products and processes, i.e. innovations, has a strong effect on the collective wealth of regions and nations. Knowledge spillovers, which are unintended knowledge flows that take place among spatial (geography) and sectoral (industry) units of observation, provide a rationale for diverging growth rates among spatial units, well beyond what might be explained by variations in jurisdictional factor endowments, and thus are of particular interest in this context. Measuring and quantifying the creation and diffusion of knowledge has proven to be a challenging endeavor. One way to capture technical and economically valuable knowledge is by means of patent and patent citation analysis. Following this approach, and utilizing a novel patent database that has been specifically developed for this purpose, the present dissertation investigates the spatio-sectoral patterns of knowledge spillovers in the Canadian economy over the time period 1983 to 2007. The employed research methodology addresses existing limitations in this stream of research, and contributes to the continuing debate regarding the significance of sectoral specialization versus diversity, and local versus non-local knowledge spillovers as the main driver of knowledge formation processes leading to innovation at the sub-regional scale. The findings indicate that knowledge spillovers are localized, and furthermore, that this localization effect has increased over time for both spillovers within a particular industry, as well as between industry sectors. The analysis of micro-geographic industry specific spatio-sectoral knowledge formation processes, and the inquiry into local sectoral knowledge spillover patterns, outlines how regional evolutionary technology trajectories potentially shape the rate and direction of technological change, and consequently influence economic growth, at a particular place.

This study investigates whether there are technology spillovers through foreign direct investment (FDI) in Turkish manufacturing industry. Before the econometric estimation, theoretical and empirical literature on FDI and technology spillovers especially by transnational corporations (TNCs) is analyzed in detail. Also, historical perspective of FDI and review of the related literature for Turkey constitutes an important part of the study. To test the spillover effects of FDI, the dataset including sectoral level determinants of 89 different sectors, according to ISIC (International Standard of Industrial Classification) 4-digit industrial classification, in Turkish manufacturing industry is used. The dataset is obtained from Turkish Statistical Institute (TurkStat) for the period 1983-2001. Sectoral market shares of foreign firms are used as spillover variables / and horizontal spillovers are tested. Although some specifications of variables produce negative and insignificant results, the significant regression results show that there are positive spillover effects from foreign firms to domestic firms through horizontal spillovers. In this estimation, six different proxies of capital stock are used to test the robustness of the results / and also, spillovers are tested in terms of low-technology-using (Low-Tech) sectors and high-technology-using (High-Tech) sectors.

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The purpose of this research is to analyze the dynamics of innovation and technological diffusion from the channels of international linkage at the microeconomic level. We specify and want to learn about the effects of sectoral innovation and technology transfer with international linkages: Imported technology, Information and Communication Technology, Foreign direct investment and its spillovers and trade. We apply a dynamic factor demand model to analyze the relationship between four channels of international technology transfer and diffusion, allowing for heterogeneous international linkages and their contribution to productive performance on Taiwan¡¦s manufacturing industries. We adopt the econometric method of the Generalized Method of Moment (GMM) to estimate the parameters of related equations. Throughout the empirical analysis, we hope to understand how degree of effects the four channels of technology transfer have on firm¡¦s productivity performance and the adjustment process of quasi-fixed input, capital, because of technology transfers. We found that:(1) It has the highest output level in Electrical and Electronic Manufacturing in Taiwan¡¦s manufacturing industry.(2) The exogenous technical change has a positive effect on output growth. As for the channels of international linkage, imported technology and R&D all have positive contribution to productivity. FDI has a negative impact on output growth except for Petroleum & Coal Products Manufacturing, but the effect of the FDI spillover has a positive contribution in the Taiwan¡¦s manufacturing industry.

<p>This thesis analyses the effect of FDI induced technology transfer and spillover on economic growth in the CEE countries and the Baltic States. We develop a framework were FDI and R&D are seen as sources of technological progress (A). Transition economies, due to the need to catch up quickly with more advanced economies, rely on FDI as a major channel through which they can tap the needed technology.</p><p>Whether or not technology spills over to the entire economy depends on the ability of the countries to diffuse the advanced technology transferred by FDI. We test using panel data analysis, if FDI alone can spur growth or whether the FDI induced technology spillover effect is enhanced by the level of R&D.</p><p>Empirical evidence is found that FDI and R&D as an interaction term have helped the CEE countries and the Baltic States to accelerate growth by modernizing the economy through an upgrading process.</p>

This dissertation consists of three essays in international trade. The first chapter analyzes integration strategies of Korean firms that involve producing final products and providing post-production services for serving geographically separate foreign markets: high-income and low-income countries. I present a model in which heterogeneous firms must provide services for products through their subsidiaries in host countries, but can produce output in different locations. The model shows that the firm's equilibrium decision depends on its own productivity level and economic variables that affect production location and providing services. Using plant- and firm-level data of Korean firms, the empirical analysis provides the results that support the model's predictions. The second chapter analyzes the effects of regional economic integrations on investment patterns among Korean multinational firms. Using Korea's middle-income status, we develop a model in which heterogeneous firms in a middle-income country decide on the optimal FDI strategies for serving different regions: a developed (EEA) and a developing (AFTA) trade integrated regions. Following reduced trade costs between countries inside the trade integrated region, our model predicts that integrating into a regional economic zone affects firms with low productivity levels to enter the region via complex FDI strategies. Depending on the size of the region, however, complex FDI strategies differ such that firms investing in developed region tend to undertake local and export sales to the third country, whereas firms investing in developing region are more likely to engage in not only local and export sales to the third country, but also export sales to the parent country. The empirical analysis confirms the effect of different regional economic integrations on the strategy of firms with different productivity levels. The last chapter examines the conditions under which technology spillovers through workers' movement occur between foreign affiliates in the host country and determine whether such spillovers can affect the exporters' decisions to switch their strategies to serve foreign markets via FDI. Developing a simple two-period duopoly model, I find that the occurrence of technology spillovers is dependent on firm and host country characteristics such that spillovers are more likely to arise when firms have similar technology capabilities and in countries that incur low cost of training local workers. Under these circumstances, exporters are more likely to switch to FDI for serving foreign markets. However, I find that transport costs of goods have ambiguous effect on the occurrence of spillovers and thus, do not play a marginal role in exporters' decision. / text

This dissertation consists of three essays on topics in macroeconomics. In the first chapter, I construct a macroeconomic model with a heterogeneous banking sector and an interbank lending market. Banks differ in their ability to transform deposits from households into loans to firms. Bank size differences emerge endogenously in the model, and in steady state, the induced bank size distribution matches two stylized facts in the data: bigger banks borrow more on the interbank lending market than smaller banks, and bigger banks are more leveraged than smaller banks. I use the model to evaluate the impact of increasing concentration in US banking on the severity of potential downturns. I find that if the banking sector in 2007 was only as concentrated as it was in 1992, GDP during the Great Recession would have declined by 40% less it did, and would have recovered twice as fast. In the second chapter, my co-author and I investigate the impact of firm capacity constraints on aggregate production and productivity when the economy is driven by aggregate and idiosyncratic demand shocks. We are motivated by three observed regularities in US GDP: business cycles are asymmetric, in that large absolute changes in output are more likely to be negative than positive; capacity and capital utilization are procyclical, and increase the procyclicality of measured productivity; the dispersion of firm productivity increases in recessions. We devise a model of demand shocks and endogenous capacity constraints that is qualitatively consistent with these observations. We then calibrate the model to aggregate utilization data using standard Bayesian techniques. Quantitatively, we find that the calibrated model also exhibits significant asymmetry in output, on the order of the regularities observed in GDP. The third chapter explores the role of distance in equilibrium selection. I consider a model economy with multiple steady state equilibria where a high productivity and a low productivity technology are available for use in production. The high productivity technology requires a fixed set up cost for production. Sectors are linked by localized production complementarities. I consider selection under a learning rule in which agents imitate their most successful neighbor. As distance between neighbors decreases, the possible profits from industrialization increase, and the likelihood that the learning rule process converges to a steady state matching the H equilibrium increases. The result suggests that, in the presence of localized technology spillovers, there may be important gains to economic growth from infrastructure development. / text

This dissertation seeks to provide insight to how e-commerce adoption and utilization change the condition of U.S. Manufacturing establishments, by answering two interrelated questions: (1) What are the characteristics of manufacturing establishments that were early adopters of e-commerce activities?; (2) Once e-commerce is adopted, how has adoption affected employment within manufacturing establishments? The U.S. manufacturing industry was selected for analysis as manufacturing has been and continues to be an important sector for employment and the overall U.S. economy and has been the primary sector responsible for the majority of Business-to-Business e-commerce activity. Using two econometric models, seemingly unrelated regression (SUR) and three stage-least squares (3SLS), this dissertation confirms previous research pertaining to the characteristics of firms that were early adopters of e-commerce. However, this dissertation also provides insights for how manufacturing firms change after the implementation of e-commerce. Specifically, findings suggest that e-commerce adoption has a negative effect on manufacturing jobs between 1999 and 2005. Simultaneously, the loss in jobs does not translate into an increase in wages for those still employed. The findings of this dissertation also do not provide a positive outlook for a “spatially equitable landscape” to develop via the dissemination of e-commerce in the U.S. manufacturing industry. Rather, the results suggest that the application of e-commerce will continue to reinforce the geographical advantages of firms in urban areas verses those located in more rural areas.

This thesis investigates the role of classmates in the academic achievement of an individual student. I propose a new strategy to identify ability spillovers and combine this strategy with a unique data set to estimate peer effects in education. Using this innovative approach, I quantify the average effect of peers on own academic achievement in middle school and analyze heterogeneity of own response to peers along ability and gender lines. In Chapter 1, I provide a comprehensive empirical analysis of linear-in-means model of peer interactions and estimate the effect of the average quality of peers on academic progress of six-graders in Ontario public schools. I provide convincing evidence of the validity of my identification strategy and show that the average quality of classmates measured by their lagged test scores matters for individual academic achievement. I find positive, large and significant ability spillovers from peers in the same classroom. To reconcile the broad spectrum of peer effect's estimates in the literature, I also investigate the impact of peers in the same school and grade. I show that once a peer group is aggregated to a grade or class level, the effect attenuates towards zero. In Chapter 2, I relax the main assumption of linear-in-means model and compare alternative models of peer interactions with the empirical results from the first chapter. My findings imply that all students unambiguously benefit from the presence of high achieving peers. At the same time, academic progress of high-achievers does not suffer from the presence of low-achieving classmates. This finding provides important policy implications for ability grouping of students in schools. With the help of a policy experiment I demonstrate that spreading out high ability students across classrooms is an efficient strategy to increase the achievement level of every student. In the third chapter, I introduce gender dimension into the analysis of peer effects and investigate the role of class gender composition on individual academic achievement. I employ two different identification strategies and find that large share of girls in a class facilitates academic progress of both boys and girls. While he average quality of girls is one of the determinants of own achievement, peer-to-peer interactions and improved discipline in a classroom, when more girls are present, also play an important role.

This thesis investigates the role of classmates in the academic achievement of an individual student. I propose a new strategy to identify ability spillovers and combine this strategy with a unique data set to estimate peer effects in education. Using this innovative approach, I quantify the average effect of peers on own academic achievement in middle school and analyze heterogeneity of own response to peers along ability and gender lines. In Chapter 1, I provide a comprehensive empirical analysis of linear-in-means model of peer interactions and estimate the effect of the average quality of peers on academic progress of six-graders in Ontario public schools. I provide convincing evidence of the validity of my identification strategy and show that the average quality of classmates measured by their lagged test scores matters for individual academic achievement. I find positive, large and significant ability spillovers from peers in the same classroom. To reconcile the broad spectrum of peer effect's estimates in the literature, I also investigate the impact of peers in the same school and grade. I show that once a peer group is aggregated to a grade or class level, the effect attenuates towards zero. In Chapter 2, I relax the main assumption of linear-in-means model and compare alternative models of peer interactions with the empirical results from the first chapter. My findings imply that all students unambiguously benefit from the presence of high achieving peers. At the same time, academic progress of high-achievers does not suffer from the presence of low-achieving classmates. This finding provides important policy implications for ability grouping of students in schools. With the help of a policy experiment I demonstrate that spreading out high ability students across classrooms is an efficient strategy to increase the achievement level of every student. In the third chapter, I introduce gender dimension into the analysis of peer effects and investigate the role of class gender composition on individual academic achievement. I employ two different identification strategies and find that large share of girls in a class facilitates academic progress of both boys and girls. While he average quality of girls is one of the determinants of own achievement, peer-to-peer interactions and improved discipline in a classroom, when more girls are present, also play an important role.