Efficiency, Leverage and Exit: The Role of Information Asymmetry in Concentrated Industries This paper develops a real options model of imperfect competition with asymmetric information that analyzes firms' exit decisions. Optimal exit decision is linked to firm characteristics such as financial leverage and efficiency. The model shows that informational asymmetries can lead more efficient and less leveraged firms to leave the product market prematurely. It also demonstrates how firm efficiency can increase debt capacity relative to rival firms. The model also has implications for firm risk and asset returns. Specifically, the paper shows that, when there is information asymmetry among rivals, rival actions can have a "news effect" that change a firm's dynamic risk structure. Human Capital Investment and the Completion of Risky R&D Projects We consider a firm that employs human capital to make a technological breakthrough. Since the probability of success of the breakthrough depends on the current stock of human capital the firm has an incentive to expand its human capital stock. The present value of the patent is stochastic but can be observed during the R\&D phase of the project. The exogenous value of the patent determines the firm's decisions to invest in human capital, to abandon the project if necessary, and to invest in marketing the new product. We study the corresponding optimal stopping times, determine their value and risk consequences, and derive optimal investment in the stock of human capital. While optimal investment in human capital is very sensitive to its productivity do increase the probability of a breakthrough it is insensitive to changes in the volatility of the present value of the patent. The value of the firm is driven by fixed labor costs that occur until the breakthrough is made, the call option to invest in human capital and market the product, and the put option to abandon the project. These options together with labor costs' based operating leverage determine the risk dynamics. Risk varies non-monotonically with the stochastic value of the patent and is U-shaped. Migration Options for Skilled Labor and Optimal Investment in Human Capital This paper develops a model of optimal education choice of an agent who has an option to emigrate. Using a real options framework, we analyze the time evolution of human capital in the country of origin and investigate the role of migration possibilities in the accumulation of different types of human capital. The analysis shows that the accumulation of human capital depends crucially on the level of uncertainty and the transferability of human capital across countries. Government subsidies are an important determinant of the composition of different types of human capital and can be crucial in alleviating the brain drain problem. (author's abstract)

Four essays, or chapters, model the capital structure, governance, and investment decisions as part of a sequential game. Each chapter is separate in its context, assumptions, and conclusions. The titles of the chapters are below. Abstracts of each essay or chapter can be found at the beginning of each chapter. The titles of the chapters or essays are as follows: I. Managerial Ownership with Rent-Seeking Employees, II. Financing Professional Partnerships, III. Sunk Cost Efficiency with Identical Competitors, and IV. Business Stealing and Bankruptcy. With the exception of Chapter III, which is meant to complement Chapter IV, these essays argue that the structure of financial contracts can affect the real behavior of firms. The first chapter argues that financial governance policies affect the behavior of rank-and-file employees. In Chapter II, the governance and capital structure of professional service firms affects clients’ expectations of the firm’s quality. In Chapter IV, the enforcement of financial contracts by bankruptcy courts affects the number of firms that enter and exit the industry.

Empirical findings on knowledge transfers associated with business closures are limited (Hoetkerand Agarwal, 2007), and very few studies examine the search process of individuals and theirsearch for new solutions and ideas (Maggitti et al., 2013). The purpose of this paper is to fill theknowledge gap of knowledge spillovers and idea generation taking place while displacedemployees transition to entrepreneurship after business closure. This paper will examineAstraZeneca’s displaced employees that started their own businesses after AstraZeneca’sresearch and development facilities closed down in Lund (2010) and Södertälje (2012) inSweden. The research questions investigated were: What are the different factors and ideaprocesses that made the displaced employees start their own businesses? To what extent are theentrepreneurs utilizing their knowledge and experience gained at AstraZeneca in their currentbusinesses, and are they using contacts gained while working for AstraZeneca? To answer thesequestions both qualitative and quantitative research method were used in the form of surveys andinterviews. The results of this study showed that a knowledge spillover took place between thenew firms and the closing firm, while previous experience and expertise gained fromAstraZeneca greatly influenced the idea generation that took place amongst the displacedemployees while transitioning into entrepreneurship. Moreover, about 20% of theentrepreneurship was necessity based, whereas 70% were opportunity based. In regards to thetiming of the idea generation process, half of the participants came up with the business ideaafter learning about the closure, while the rest disagreed. Therefore, the idea generation processamongst the participants did not necessary start after the announcement of the displacement.

Cette thèse adopte une approche analytique interrégionale de trois régions économiques pour évaluer les connaissances productives et la diplomatie dans le contexte d’intégration régionale, et en parallèle, les déterminants de la création d'entreprises. Du point de vue de l'intégration européenne, nous introduisons une nouvelle méthodologie de contrôle synthétique pour évaluer l'impact de l'adhésion à l'UE sur l'indice de complexité économique des nouveaux États membres d'Europe centrale et orientale. Nos résultats indiquent que l'adhésion à l'UE a joué un rôle catalyseur pour la connaissance productive des pays portant de faibles niveaux de complexité avant l'adhésion, permettant un taux de développement plus élevé dans la sophistication de l'espace d'exportation de leurs produits. En élargissant notre analyse à tous les pays européens et aux États d’Afrique du Nord, nous procédons dans un deuxième temps à l’analyse des déterminants du commerce des infrastructures institutionnelles et logistiques en élargissant le modèle de Gravité pour y incorporer des éléments de diplomatie (notamment la présence d’ambassades et d’ambassadeurs). Nos résultats démontrent les avantages des infrastructures immatérielles et matérielles ainsi que de l'activité diplomatique sur le commerce bilatéral des PECO et de l'Afrique du Nord, confirmant l'importance de ces variables en tant que moteurs de l'intégration régionale. Dans une dernière partie, nous concentrons notre analyse sur Fédération de Russie en tant que région géographique en introduisant une régression panel des déterminants de l’entrée et de la sortie d’entreprises. Cette évaluation empirique conclut que les défaillances institutionnelles et l’environnement politico-économique ont des effets significatifs sur la création et la destruction d’entreprises russes, avec une estimation robuste du prix mondial du pétrole (quelle que soit la différence entre les régions cibles) suggérant une forte exposition de chaque région russe à une crise mondiale. / This thesis takes a cross-regional analytical approach of three distinct economic areas to evaluate productive knowledge and diplomacy in the context of regional integration alongside determinants of business creation. From the angle of European integration, we introduce a new synthetic control methodology to evaluate the impact of EU accession on the economic complexity index of new CEE member states its results indicating that accession to the EU acted as a catalyst for the productive knowledge of countries with low levels of complexity before accession, allowing a higher rate of development in the sophistication of their product export space. Expanding our analysis to include all European countries and North African states, we proceed in a second stage to analyse institutional and logistical infrastructure determinants of trade by extending the traditional Gravity model to incorporate elements of diplomacy (including the presence of embassies and ambassadors). Our results demonstrate the benefits of soft and hard infrastructure as well as diplomatic activity on the bilateral trade fixed effect CEE and North African countries, validating their importance of these variables as powerful drivers of regional integration. In a final part, we turn our analysis to the Russian Federation as a regional geography with a panel regression analysis of the determinants of firm entry and exit. The empirical evaluation concludes that institutional failures and the politico-economic environment exhibit statistically significant and economically meaningful effects both on the creation and destruction of Russian firms, with a robust estimate of the world oil price (irrespective of the difference in target regions) suggesting a possible high exposure of each Russian region to a global crisis.