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Essays on knowledge flows, international economics, and entrepreneurship.

Fons-Rosen, Christian (2009) Essays on knowledge flows, international economics, and entrepreneurship. PhD thesis, London School of Economics and Political Science (United Kingdom).

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Abstract

This thesis consists of three essays on either knowledge flows, international economics, or entrepreneurship. The first chapter focuses on knowledge flows and foreign direct investment. The second chapter aims to understand the pattern of cross-country equity portfolio allocations. The third chapter focuses on how entrepreneurship practices across countries is affected by bureaucratic circumstances. Chapter I investigates whether FDI is a channel through which knowledge spills over from the foreign multinational to the host country. I analyse whether patents developed by local inventors in Central and Eastern Europe (CEE) cite the stock of patents of FDI multinationals more often after these companies have established themselves in CEE. Using a newly hand-collected data sample on privatisation cases resolved during the 1990s, I find that winning bidders experience a 20% greater increase in citations received by the host country compared to the losing bidder. Chapter II presents a model of international portfolio choice based on crosscountry differences in relative factor abundance. The change in factor prices after a positive shock in a particular country provides insurance to countries that have dissimilar factor endowment ratios. The main prediction is that countries with similar relative factor endowments have a stronger incentive to invest in one another for insurance purposes. Empirical evidence supports our theory. Chapter III presents a model of corporate finance that incorporates bureaucratic start-up costs and where sectors differ in their need of external capital. The main theoretical prediction is that a reduction in start-up costs leads to an increase in the share of value added and number of firms in sectors with greater external finance. Intuitively, the sector with high external finance experiences a greater improvement in economies of scale, thereby making it more attractive to consumers. Using sector-country level data on manufacturing production, I find support for the predictions of the model.

Item Type: Thesis (PhD)
Uncontrolled Keywords: Economics, General, Business Administration, Entrepreneurship
Sets: Collections > ProQuest Etheses
Departments > Economics
URI: http://etheses.lse.ac.uk/id/eprint/2366

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