Essays on Firm Dynamics, Innovation, and Policy Evaluation

Abstract

This dissertation comprises three self-contained essays examining how policies shape firm dynamics, including innovation strategies and multi-location production decisions.Chapter 2 studies the effects of unilateral investment subsidies and investment restrictions on global technology competition and local supply resilience in the face of potential trade disruption. I develop and estimate an industry equilibrium model to analyze how semiconductor foundries make innovation and capacity investment decisions. Using this framework, I assess the impact of the U.S. CHIPS Act under different trade environments.Chapter 3, co-authored with Mark Curtis, Felix Samy Soliman, Juan Carlos Suarez Serrato, and Daniel Yi Xu, investigates how place-based environmental regulations affect firms’ spatial reallocation decisions. Focusing on the U.S. Clean Air Act, we combine reduced-form analysis with a quantitative trade model featuring multi-location production to quantify the policy’s economic costs.Chapter 4 examines the role of nascent acquisitions in shaping innovation across industries. I develop a model incorporating firm entry, R&D investment, acquisitions, and post-acquisition development to assess how these acquisition opportunities influence the innovation incentives of firms across industries with varying characteristics.Together, these essays contribute to our understanding of how policy interventions influence firm strategies, technological progress, and economic outcomes.