This dissertation examines how structural context shapes the economic impact of innovation and reforms through two empirical studies spanning the U.S. and China.

The first essay revisits the conventional narrative of industry ``shakeouts” following innovation breakthroughs, challenging the long-standing conjecture that industries inevitably trend toward concentration. While shakeouts -- large and rapid decline in firms -- are often assumed to follow breakthroughs, I demonstrate that they are the exception rather than the rule. Using a novel statistical method to detect breakthroughs from net entry rate anomalies, I show that most breakthrough industries exhibit persistent firm entry without shakeouts. This pattern aligns with breakthroughs increasingly occurring in industries with low returns to scale and shallow learning curves, reshaping our understanding of U.S. innovation dynamics since 1980.

The second essay reexamines the common belief that property rights reforms are singularly transformative for economic prosperity. Analyzing China's 2003 land law -- which replaced egalitarian redistribution with rental markets -- I find that even major institutional changes yield modest aggregate gains (6.3\% output increase) when other distortions persist. High-resolution panel data show the law improved land allocation selectively among commercial farmers, while factor decomposition reveals labor misallocation accounts for the majority of productivity losses -- a finding that qualifies the conventional emphasis on land rights as a primary development lever. These results underscore the importance of coordinated reforms: property rights matter, but their efficacy depends on complementary institutional changes.

Together, these essays highlight a unifying principle: market transitions -- whether technological breakthroughs in the U.S. or institutional reforms in China -- require alignment with their structural contexts. In the U.S., industry characteristics mediate innovation outcomes; while in China, policy effectiveness hinges on institutional complementarities.