This dissertation comprises three essays on industrial policy, strategy, and entrepreneurship. The first essay (joint with Tarun Khanna) analyzes the impact of industrial policy on entrepreneurial activity, industry evolution, and firm competitiveness. Using the Brazilian ethanol fuel industrial policy program as a research setting, we find that industrial units founded during the period of policies are currently more productive than those founded before the protected period. We also find that, after the program ended, a significant number of units that were built during the period of subsidies were acquired. Through these acquisitions, high quality entrepreneurs should have selected out many low quality entrepreneurs that were in trouble after the "protected" period ended.

Manufacturing firms frequently expand their production capacity through the acquisition of industrial units. A second essay analyzes how existing units in the acquirer company are affected by the acquisition of another facility. Using a unique dataset from a family-owned Brazilian agribusiness company, I find that an existing unit that is geographically close to a recently acquired unit experiences a decrease in its performance. In contrast, an industrial unit that is operationally similar to an acquiree experiences an increase in its operational performance. The evidence also shows that these two effects tend to decrease over time. Finally, the size of the existing unit counteracts these effects.

The last essay explores how an established organization can ease the emergence and early growth of a new venture in an unfriendly environment. I describe and analyze the foundation and early life of two biotechnology start-ups at the time they were controlled by a major Brazilian business group. I focus on the role that the business group had in mediating the interaction of the start-ups with their business, institutional, and political environment. Based on interviews and public and proprietary information, I discuss the problems faced by the start-ups and how the affiliation with the group has helped them to address many of these issues. This essay shows how an unorthodox organizational solution can improve the chances of success of high-tech ventures in adverse environments.