Essays in Firm-level Productivity, Mortgage Policy Reform, and Intellectual Property Protection
This dissertation investigates policy-relevant questions concerning firm-level productivity, mortgage interest deduction, and intellectual property protection. The first essay explores the effects of debt and equity financing on firm-level productivity and productivity growth using a state-of-the-art production function estimation approach that addresses the transmission bias. I find that equity financing has a positive effect on productivity and productivity growth. In contrast, debt financing has a negative effect on productivity and productivity growth. I also find the productivity effects of financing to be heterogeneous across sectors within the manufacturing industry. The second essay studies the impact of a Dutch mortgage policy reform that eliminated mortgage interest deduction for interest-only and deferred amortization mortgages on January 1, 2013. The econometric challenge addressed in this study is the fact that households choose mortgage products based on observable and unobserved characteristics, which results in a selection bias. I ameliorate this concern by combining kernel matching with a difference-in-difference estimator to make predictions about the effects of the policy reform. I find that the reform led to higher mortgage interest rates for treated households. Moreover, I find that the policy compelled the treated mortgagors to reduce their mortgage debt by opting for cheaper and smaller homes. The third essay examines the role of external cooperation and practices of competitors in the informal sector in influencing adoption of IP protection in East Africa. I find that firm size, access to a skilled labour force, use of retained earnings, and being an exporter have positive associations with IP protection. I also find that adoption of IP protection has a positive correlation with access to external research and/or software consultants and external R&D. In contrast, use of foreign technology is associated with lower probability of IP protection as it crowds out in-house innovation. Competition from informal firms has no correlation with the probability of adopting IP protection if a firm appraises it to be a minor obstacle. However, firms that perceive practices of the informal competitors as a moderate obstacle or a major obstacle or a very severe obstacle are more likely to embrace IP protection.