||The thesis contains three chapters. The topics that are discussed refer to the technology industries and companies. The first chapter is entitled “On the Choice between Closed and Open Modes of Production” . A final product comprising of two complementary components, A and B, is said to be produced under the closed mode if A and B are produced by the same firm, and under the open mode if A and B are produced by different firms. In this chapter we develop a multi-period duopoly model to address the choice between closed and open modes of production. Within each period, the firms make decisions about their modes of production simultaneously in the first stage, and then choose their respective prices simultaneously in the second stage. We establish the existence of sub-game perfect Nash equilibrium and show that the open mode becomes more likely vis-à-vis the closed mode if the firm with a higher total cost of producing both components experiences a cost reduction in the components, if there is an increase in the other firm’s cost of producing the component in which it has a disadvantage, if the quality of products produced under open mode goes up, and if the quality of products produced under closed mode goes down. In addition, we explore the possible divergence between the equilibrium mode and the mode that maximizes social welfare, and how it is affected by changes in the parameters. In the case of far-sighted firms that recognize the inter-temporal linkages between games in successive periods, we establish the existence of a symmetric pure strategy Markov perfect equilibrium that features rational expectations of future profits and show that a firm, whose unit cost of producing each component is lower than that of its rival (called a “clear winner” ), may cede one component market to its competitor under some realizations of production costs, whereas a clear winner that ignores the inter-temporal linkages will always take both component markets. That is to say, recognition of dynamic linkages may increase the winner’s willingness to reduce the intensity of rivalry by accepting the open mode over the closed mode. The next two chapters are empirical studies based on the data from technology companies in Shenzhen and Beijing. The second chapter is entitled “Operating Characteristics, Strategy, and Performance of Technology Companies in Shenzhen”. Using unique data from Shenzhen’s technology firms which are members of the Shenzhen High Tech Industries Association (SZHTIA), we examine the effects of their operating characteristics and strategic choice on their accounting-based performance. The operating characteristics include their asset structure, debt structure, and expense-structure. The strategic choice is their R&D expenses. To capture the size effect, for each of these explanatory variables the firms are separated into two groups, one for smaller firms and the other for larger firms. A new method is developed to identify the group of explanatory variables that have significant size effects. In addition, an empirical model is developed to identify the factors that determine the exit of firms from SZHTIA. “Operating Characteristics, Strategy, and Performance of Technology Companies in Beijing’s Zhongguancun Science Park” is the title of the third chapter. In this chapter, using a unique data set of technology firms located in Beijing’s Zhongguancun Science Park (ZSP), we examine the effects of operating and strategy variables on the financial performance and the phenomenon of exit of firms from ZSP. The variables examined reflect the firms’ assets structure, debt structure, expenditure structure, and R&D effort. We also investigate the size effect of these variables by separating the firms into two subgroups by firm size for each variable and examining whether the variable has significantly different effect on the performance of the subgroups. The results show that the operating and strategy variables had the expected effect, but for most of these variables size also mattered. The ratio of current assets to total assets had a significantly positive effect on performance, especially on that of the larger firms (defined as those firms whose total assets are above a certain percentile in their respective sectors). The ratio of short-term debt to total assets had a significantly negative effect on performance, especially for the large firms. The long-term debt asset ratio had a significantly negative effect on performance of most firms, but had a significantly positive effect on the performance of the smallest of firms. The ratio of sales expense to cost had a significantly negative effect on the performance of the majority of smaller firms, while having a significantly positive effect for the largest firms. Similarly, the ratio of researchers to employees (lagged one year) had a significantly negative effect on performance, but the effect on the smallest firms was much more significant than that on the others firms. The operating environment faced by the firms, as captured by industry profit, had a negative effect on the probability of exit of firms from ZSP, whereas the dispersion of industry profit had a positive effect on the probability of exit.