Essays in finance and innovation

Abstract

This thesis examines which environments foster or possibly constrain innovation, focusing on three settings: the match between inventors and firm type, the regulatory environment surrounding new platform technologies and its effects on local economic prosperity, and the labor markets for inventive talent across countries. The first chapter asks whether large-scale innovative environments—firms with high patenting activity—are associated with higher individual inventor productivity. Using German employer–employee data linked to European Patent Office records, I document sizable inventor-level productivity premia at large-scale innovative firms. Exploiting geographic constraints faced by German apprentices, which generate quasi-random variation in access to large-scale innovative employers, I show that improved access raises early-career patenting by roughly 20%, consistent with a causal link between firm innovative scale and individual productivity. The positive association extends to seasoned inventors. Evidence points to co-worker spillovers and capital–labor complementarities as likely mechanisms. The second chapter analyzes how regulation shapes the composition of local economic activity around a prominent platform innovation: peer-to-peer short-term rental intermediaries such as Airbnb and Vrbo. Using a staggered difference-in-differences design for U.S. counties from 2010 to 2020, I find limited or no effects on housing prices or tax revenue. By contrast, GDP and personal income per capita in accommodation and food services increase, consistent with reallocation from informal hosting toward hotels. Despite the political controversy surrounding STR platforms, current regulations appear to have only modest aggregate economic consequences while shifting activity across closely related sectors. The third chapter compares the labor-market environments for inventors in Germany and the United States using comprehensive employer–employee microdata. Both countries exhibit aging inventor populations, low female participation, growing concentration of inventors in larger and older firms, and declining job mobility. They differ, however, in their ability to attract foreign-born inventors, in the strength of the earnings–productivity relationship, and in the types of firms where inventor output is highest. Taken together, these findings shed light on the possible sources of slowing innovative performance in advanced economies.