This dissertation consists of three essays that address recent topics in corporate finance that concern for scholars, policymakers, and investors. Main body of this dissertation has been developed based on the "nexus of contracts" theory of the firm which in recent years has sparked renewed debates on the motivation underlying firm size and boundary. The first essay explores a network of interconnected firms and examines the impact of the firm's relationships with peers, rivals, and customers on its capital structure, and how the firm's revealed peers influence its financing decisions. We demonstrate that industry classification approach is fraught with measurement error, and instead implement an alternative peer identification scheme that designates peer groups as those explicitly disclosed by managers to shareholders. The results contrast with previous studies that find only weak evidence for peer effects on capital structure. We find that peer effects are particularly strong when focal firms have persistent rivals, in the sense of supplying common customers for at least two consecutive years. While constructing the firm's actual network poses a challenge, the new approach can lead to more real-world insights about firm behavior. In the second essay, I approach to a challenging version of peer effects model with firm's and peer's multinomial decision outcome as endogenous and financial fundamentals as exogenous explanatory variables. I show that managers do not set dividend policy independently and they are significantly under the influence of few self-disclosed diverse competitors rather than industry peers. The test results show that firm's dividend change actions are significantly correlated with past dividend actions of its peers and it is highly predictable for the next period. I also investigate and report marginal effects of firm's and peers' different endogenous and exogenous determinants on the outcome decision variable for example a peer group with an overall dividend increase action in the past 180 days, increases the chance of the dividend increase in the focal firm. Considering the market capitalization of dividend paying firms, the identified marginal effects and prediction of the cash distribution are economically meaningful and important. In the third essay, I propose a new approach to model and measure intangible value of the firm as the joint of network feature and book value of the firm. Despite the growing importance, the empirical asset pricing research has struggled to evaluate the effects of intangible assets on firms' market value. Utilizing characteristics of the firm network, I propose a network-centric value factor to replace the under-performing traditional value factor (HML) in a series of asset pricing factor model. I show that the new value factor portfolio provides stronger performance in all periods of the sample. I also explore short and long strategies to better understand effects of the networks on value of the firms. Initial findings emphasize that asset pricing studies should adjust the factor models by including intangible network value of the firm.

This thesis contributes to the understanding of peer effects, both methodologically and empirically. The endogeneity of network formation has been a major obstacle to the study of peer influence. The first and the second chapters of the thesis propose a causal identification solution in the potential outcome framework. Combining results from multiple causal inference and statistical network analysis, I show that confounding can be addressed by inferring propensity scores of network link formation from the adjacency matrix. This identification strategy imposes minimum restrictions on the data-generating process and, unlike existing econometric solutions, does not rely on any parametric modelling. As an application, I estimate the effect of high school friendships on bachelor's degree attainment. While previous literature finds that exposure to more high-achieving boys makes girls less likely to obtain a bachelor's degree, I show that if the girls consider the boys as friends, their interactions induce a positive impact instead. Since friendship endogeneity has been addressed, the estimated effect is causal. The third chapter looks at the peer effects generated by group competition. It focuses on the gender differences in preference for competition in a setting where the competition does not involve face-to-face confrontation, and effort is the only determinant of the final ranking. I first develop a model of group competition with heterogeneous preference for ranking. With empirical implications generated from the theoretical model, I then test the gender difference in the preference parameter using web-scraped data from Duolingo, a free online foreign-language learning platform with over 300 million users. Every week, language learners on Duolingo are randomly allocated to groups of 30 people to compete on the number of language lessons completed during that week. The empirical results suggest in this setting, females have a stronger preference for ranking than males.

This thesis is a collection of three essays. The first two study how ideas spread through a network of individuals, and how it an advertiser can exploit it. In the model I develop, users choose their sources of information based on the perceived usefulness of their sources of information. This contrasts with previous literature where there is no choice made by network users and thus, the information flow is fixed. I provide a complete theoretical characterization of the solution and define a natural measure of influence based on choices of users. I also present an algorithm to solve the model in polynomial time on any network, regardless of the scale or the topology. I also discuss the properties of a network technology from a public economic standpoint. In essence, a network allows the reproduction of ideas for free for the advertiser. If there is any free-riding problem, I show that coalitions of users on the network can solve such problem. I also discuss the social value of networks, a value that cannot be captured for profit. The third essay is completely distinct from the network paradigm and instead studies funding rules for public universities. I show that a funding rule that depends solely on enrolment leads to "competition by franchise" and that such behavior is sometimes inefficient. I suggest instead an alternate funding rule that allows government to increase welfare without increasing spending in universities.

In this dissertation, I study three economic issues in the field of entrepreneurship and a fourth that looks at the network structure of financial markets. Chapter 1, titled "Patenting and Nascent Firm Performance", examines how patents interact with nascent firm outcomes. The primary motivation follows a puzzle present in the data and discussed in the literature. Patents are prized possessions for business owners but the value that they confer is dubious. In this sample, patenting firms have no better survival rates and have significantly worse profit outcomes. A Oaxaca decomposition demonstrates the reason for this lies with patents' attraction of equity financing. The burden of the equity relationship proves to be a strain on the young firms. Chapter 2, titled "Signal vs Appropriation Value in Patenting" provides insight into the causal connection between patents and equity financing. This chapter also weighs in on the source of the equity firms' attraction to patents. Controlling for unobservable influences via fixed effects regression, the value measured by the coefficient on patent, demonstrates the appropriative value of the patent, rather than the signal value. Further examination reveals that equity firms are very sensitive to the legal status of the firm, eschewing general partnerships. Chapter 3, titled "Peer Effects in Entrepreneurship", studies gender differences in firm financing as a function of response to peers. This research borrows from the social interaction modeling pioneered by Charles Manski by adopting methods to include peer variables. The main finding is that males are positively and significantly affected by peer financing levels but females are not. This result is robust to industry, experience, credit risk, and other financing sources. Chapter 4, "Network Analysis of the S\&P 500", examines the financial market as a network. The literature takes two approaches to performing this analysis but no study has compared the two approaches. This chapter is the first study to compare them and provide insight as to which provides the more descriptive model. The threshold correlation approach provides much more useful results for any kind of analysis involving market connectedness and shock transition dynamics.