Abstract
This thesis moves beyond the neoclassical growth model by proposing an endogenous mechanism for knowledge growth. We introduce a broader range of channels enhancing growth either by external diffusion of knowledge from technology advanced countries to late-comer countries or by experiential diffusion of knowledge brought about by the interaction between venture capitalists and start-up entrepreneurs. To avoid the endogenous problem between venture capital and knowledge growth, we construct the legal environment indicators of venture capital to serve as instrument variable, and provide the empirical results of the dynamic association between legal environment, venture capital, and total factor productivity growth in Taiwan.