Finance - Theses
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ItemEssays in Corporate Finance( 2023-07)This thesis explores the determinants and effects of corporate innovation and technology spillovers, emphasizing their roles in productivity and economic gains. It contains a literature review and two essays examining different aspects of finance at its intersection with innovation. The first essay investigates how competition affects the economic value of innovation, the primary incentive for corporate R&D investments. I measure the economic value of innovation based on the changes in patenting firms' stock market value around patent issuance dates, following Kogan et al. (2017). The economic value of innovation is higher in industries with a low level of competition. Within an industry, firms at the technological frontier or those with relatively high pricing power enjoy higher economic returns from patents. I use a quasi-natural experimental design to compare the value of patents issued immediately before and after competition-altering events. Using horizontal M&A announcements as anti-competitive events, I show that an expected decrease in market competition leads to increased patent value. In the second essay, Lyndon Moore and I study technology diffusion mechanisms using a unique historical setting: the introduction of the cyanide method of gold extraction on the Witwatersrand goldfields in the late 19th and early 20th centuries. Mines managed by the same mining house were more likely to adopt the new process, which increased extraction rates by around 50%. Cyanide technology was continually improved after its introduction. We find evidence of "technological know-how" spillovers from engineers and mine managers but not white-collar employees. Geographical spillovers are extremely localized in nature.