his study aims to estimate whether the international linkage exists positive spillovers from international linkages or not and how to influence the output growth by international technology spillovers. According to the previous literatures, there are few focuses on firm¡¦s cost and the source of output growth. In here, 2000-2005 years panel data are analyzed to illustrate how the manufacturing sectors of Taiwan and China are influenced by their multinational corporation through via international trade activities. I suggest that technology destination countries are not possible to absorb all international technology at once from technology source country. This is mainly because absorption capacity depends on the binary structural similarity index and the absorption capacity index. The empirical results show that international technology spillovers has a significant positive effect in output growth, technology and human capital of China¡¦s manufacturing sectors via international trade activities with Taiwan. On the other side, the empirical results show that Taiwan manufacturing sectors have no significant positive effect in output growth, technology and human capital from international technology spillovers via international trade activities with China nevertheless.

Doctor of Philosophy / Department of Economics / Steven P. Cassou, Wayne Nafziger / This dissertation comprises three essays in open economy and international macroeconomics. The first essay investigates the propagation mechanism of real exchange rate shocks to key real sectors that constitute U.S. foreign trade. The analysis is carried out by decomposing the U.S. trade balance into agriculture, manufacturing and services and evaluating how these sectors respond through the monetary policy channel to a shock in the real exchange rate. A VAR model is constructed using quarterly data of the U.S. foreign trade from 1976Q2 to 2005Q1. The results show that a shock to the real exchange rate has a greater impact on manufacturing and services net trade relative to agriculture. Moreover, the results also indicate, at the sectoral level, that exports are more sensitive to the real exchange rate shocks than are imports. These results are important to researchers using dynamic stochastic general equilibrium (DSGE) models of small open economies because they show transmission features of real exchange rate and monetary policy disturbances to key sectoral components of exports, imports and the trade balance. The second essay employs a dynamic stochastic general equilibrium framework to an open economy setting in order to investigate the mechanism through which the key sectors of agriculture, manufacturing and services are affected by shocks in the real exchange rates. The essay investigates exchange rate movements as deviations from purchasing power parity, disregarding the changes in the prices of non-tradable goods relative to tradable goods among countries. The results suggest that exchange rate movements are a function of structural parameters that constitute the three sectors of agriculture, manufacturing and services such as labor shares and the elasticity of substitution between domestic and foreign goods. The third essay examines the key forces driving innovation among entrepreneurs of ICT (information and communications technology) firms within Bangalore, India’s leading software city. The essay employs the multinomial logistic technique on qualitative variables related to education, social strata, experience, and diaspora of Indian software entrepreneurs to show empirically their relevance in explaining Schumpeterian innovation in the Indian software industry. This study not only looks at the impact of years of schooling on innovation, but also the types of education received by an entrepreneur, such as technical or commercial type of education, whether the last degree was received from India or from abroad and whether the entrepreneur attended the Indian Institute of Technology. The empirical results indicate that, the level of education, in terms of number of years of schooling and types of education received by an Indian software entrepreneur are statistically significant in explaining innovation in the Indian software industry. The results also show that, more years of experience in the software industry by an entrepreneur, increases the probability that they become innovators and reduces the likelihood of imitation. Moreover, the likelihood of adaptation is invariant to years of experience in the industry. We also investigate whether exposure to foreign technology increases the likelihood of innovation in the industry by examining three types of diaspora networks, that is, living abroad, working abroad and being a CEO abroad at least 6 months before establishing a software company in India. The results suggest that this foreign exposure increases the likelihood of innovation and reduces imitation and adaptation. Among studies of Indian entrepreneurs examining caste, this study is unique in that caste has no statistical significance in explaining entrepreneurship.

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This study focuses on four Asia Pacific countries ¡V Australia, Japan, Korea, and Taiwan ¡V and analyses how the other three influence one¡¦s domestic manufacturing sectors through international trade and FDI activities. To reveal the truth that different industrial structures and absorption capacity may affect each country's efficiency to assimilate spillovers, the index of capture parameter is built in the dynamic adjustment model. By applying the unbalanced panel data from 1990-2003, it is found that both trade and FDI serve as important channels of international technology diffusion. With all sectors are considered, Korea is the country that benefits the most from international trade and FDI activities. For Australia and Japan, FDI spillovers bring more sectors with positive effects than what trade spillovers do. Taiwan, on the other hand, receives beneficial spillovers from both trade and FDI in two sectors. While the positive spillovers effect occurs in every manufacturing sector, negative relationship between domestic sectors¡¦ productivity and international spillovers can be found in some sectors as well. This phenomenon can be accounted for the lack of technology capture ability and the occurrence of market-stealing effect or asymmetric bargaining power.

Advanced technology plays a more and more important role in economic growth. With increasing international transactions, technology spillover between countries is becoming more important for especially developing countries. The main objective of this essay is to investigate the relationship between labor productivity and technological spillovers measured by Foreign Direct Investments (FDI), import and Research and Development expenditure (R&D). We use data covering 41 developing countries for the time period 2005 to 2008 to assess the extent to which technological spillovers from US influence labor productivity in the selected developing countries. Our results show that the relationship between technological spillovers and labor productivity in developing countries are highly sensitive to model specification and estimation techniques. Simple pooled data estimations revels a clear relation between technological spillover an labor productivity while more complex models such as  dynamic panel data models fails in this task.

This dissertation comprises two essays in financial economics. They study how firms finance and invest in innovative and intangible assets. The first essay examines the impact of technology spillovers on corporate financing decisions for innovative firms. I find that greater technology spillovers lead to higher leverage in innovative firms. Furthermore, in firms with greater technology spillovers, equity is more costly relative to debt. I find that these financing effects are generated by at least three related mechanisms: information asymmetry, asset redeployability, and equity undervaluation. All three mechanisms lead firms to substitute away from equity and toward debt. The results are robust to exploiting variation in RandD tax credits to identify the causal effect of technology spillovers. The second essay is coauthored with Ambrus Kecskés at York University and Sattar Mansi at Virginia Tech. My coauthors and I enter the long-lived debate about whether stakeholder capital investment increases shareholder value. We argue that long-term investors are natural monitors that can ensure that managers choose stakeholder capital investment to maximize shareholder value. We find that long-term investors increase the value to shareholders of stakeholder capital investment, not as a result of higher cash flow but rather of lower cash flow risk. Also following prior work, we use indexing by investors and the staggered adoption of state laws on stakeholder orientation for identification. Our findings suggest that firms can create value for shareholders by investing in stakeholder capital as long as managers are properly monitored by long-term investors. / Ph. D.

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.

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

The inflow of the foreign direct investments (FDI) is often associated with existence of externalities which are created by influence of multinational companies with higher technology level on domestic companies. It is hard to prove some effect of the technology spillovers and other externalities by empirical calculations. Moreover, various results of these actual papers support real discussions among economists about this topic. The goal of my thesis is shed light on this problem by using the sector analysis of the automobile industry which is significant recipient of the government incentives in the Czech republic. I chose the example of the TPCA company. I focused on impacts of the entrance of this automobile maker not only on its suppliers, but also on wage changes in this sector. The conclusions of this analysis should not be considered generally acceptable for all industries. However, the magnitude of the importance of the automobile industry for Czech economy determinates a relevancy of my findings for the total look on the externalities of FDI in the Czech republic.

This thesis investigates conditions under which the activities of multinational enterprises (MNEs) impact upon innovation performance in host-country firms. Three specific sub-questions are addressed: 1) Do MNE subsidiary characteristics influence FDI spillovers on host-country firms? 2) Does the external technological environment in individual industries influence spillover effects? 3) Do such technology spillovers follow a linear relation with the scale of FDI? Individual empirical analyses, using firm-level data extracted from two waves (2002 and 2005) of the Korean Innovation Survey (KIS) in the Republic of Korea (South Korea), are used to examine these questions. The first finding is that FDI spillovers vary depending on the subsidiary’s heterogeneous role. In this regard, we build on recent theoretical contributions made by the network-based view of MNEs, distinguishing heterogeneous subsidiary roles into either competence-creating (CC) or competence-exploiting (CE). Our results show that CC subsidiaries generate negative horizontal and positive backward spillovers, but no forward spillovers. Against this, CE subsidiaries generate positive horizontal and forward spillovers and negative backward spillovers. The second finding concerns the moderating role assumed by the type of business environment in the host country during foreign entry, especially in terms of environment velocity. We build on strategic management literature that the behaviour and performance of a firm is influenced by environment velocity, finding that environment velocity affects backward (negatively) and forward spillovers (positively), but not horizontal spillovers. The third finding concerns non-linear (linear) impacts of FDI spillover across different scales of FDI in a sector, building on existing studies predicting a changing marginal effect of horizontal spillovers. We took this a step further by comparing horizontal spillovers on local rivals and vertical spillovers on local partners, either suppliers or clients. The key contributions are two-fold: firstly, this thesis proposes revising implicit assumptions in the extant literature by identifying conditions of FDI spillovers concerning subsidiary heterogeneity and business environment type, and also by confirming the non-linear effect of horizontal and backward FDI spillovers. Secondly, it provides a glimpse of FDI spillovers in a technologically capable host country in East Asia. The findings stress various implications, including the usefulness of international business theories for assessing the role of MNE activities in host economies.