Showing papers on "Spillover effect published in 2002"

Much Ado About Nothing? Do Domestic Firms Really Benefit from Foreign Investment?

Abstract: Many governments offer significant inducements to attract inward investment, motivated by the expectation of spillover benefits. This paper begins by reviewing possible sources of spillovers. It then provides a comprehensive evaluation of the empirical evidence on productivity, wages and exports spillovers in developing, developed and transitional economies. Although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is hard to find. The reasons for this are explored and the paper concludes with a review of policy aspects.

Geographic Localization of International Technology Diffusion

Abstract: Income convergence across countries turns on whether technological knowledge spillovers are global or local. I estimate the amount of spillovers from R&D expenditures on a geographic basis, using a new data set which encompasses most of the world's innovative activity between 1970 and 1995. I find that technology is to a substantial degree local, not global, as the benefits from spillovers are declining with distance. The distance at which the amount of spillovers is halved is about 1,200 kilometers. I also find that over time, technological knowledge has become considerably more global. Moreover, language skills are important for spillover diffusion. (JEL F0, O1, O3)

Work–Family Spillover and Daily Reports of Work and Family Stress in the Adult Labor Force†

Abstract: Work–family research employing nationally representative samples and multiple methods of data collection is uncommon. We used data from two affiliated national surveys to examine the distribution of work–family spillover among working adults. The National Study of Daily Experiences (n= 741), an 8-day daily diary study using a subsample of the National Survey of Midlife Development in the United States (MIDUS; N= 2,130), allowed work–family spillover to be conceptualized and operationalized in different ways. Analyses testing family life course hypotheses indicated that self-reported negative and positive spillover between work and family were not randomly distributed within the labor force. Age was found to have a persistent curvilinear effect on negative spillover between work and family. The prevalence of co-occurring work and family stress reported over 8 days was comparable across nearly all the sociodemographic characteristics.

Interacting agents, spatial externalities and the evolution of residential land use patterns

Abstract: We develop a model of land use conversion that incorporates local spillover effects among spatially distributed agents. The model is used to test the hypothesis that fragmented patterns of development in rural-urban fringe areas could be due to negative externalities that create a 'repelling' effect among residential land parcels. Identification of the hypothesized interaction effect is complicated by unobserved, spatially correlated heterogeneity. Using an identification strategy that bounds the interaction effect from above, we find empirical evidence that is consistent with a theory of negative interactions among recently developed residential subdivisions in exurban Maryland. The result offers an alternative explanation for low density sprawl to that which is frequently posited in the economics literature and one with potentially quite different efficiency implications. Copyright 2002, Oxford University Press.

The psychology of quality of life

Abstract: Preface. Part I: Introduction. 1. Definitions and Distinctions. 2. Examples of Measures of Subjective Well Being. 3. Motives Underlying Subjective Well Being. Part II: Inter-domain Strategies. 4. Bottom-up Spillover. 5. Top-down Spillover. 6. Horizontal Spillover. 7. Compensation. Part III: Intra-domain Strategies. 8. Re-evaluation Based on Personal History. 9. Re-evaluation Based on Self-concept. 10. Re-evaluation Based on Social Comparison. 11. Goal Selection. 12. Goal Implementation and Attainment. 13. Re-appraisal. Part IV: Inter- and Intra-domain Strategies. 14. Balance. Index. About the Author.

An examination of crossover and spillover effects of spousal and expatriate cross-cultural adjustment on expatriate outcomes.

Abstract: Integrating work-family and cross-cultural adjustment literatures, the researchers proposed and tested a spillover and crossover model of expatriates' cross-cultural adjustment with reciprocal relationships. Spillover effects refer to the influence that expatriate attitudes in a particular domain (e.g., work) have on attitudes in other domains (e.g., nonwork), whereas crossover effects refer to the influence of expatriate attitudes on the spouse's attitudes (and vice versa). Data collected from Japanese expatriates, their spouses, and their superiors strongly supported both spillover and crossover effects between expatriate and spousal cross-cultural adjustment. In addition, expatriates' cross-cultural adjustment was found to be related to satisfaction, which, in turn, was found to be negatively related to expatriates' intention to return to their homeland early.

Foreign direct investment spillovers within and between sectors: evidence from Hungarian data

Abstract: This article analyses how FDI influences labour productivity of domestic firms in Hungary We find that foreign firms perform better than local firms The presence of foreign firms has a positive spillover effect on labour productivity of local firms in the same sector, specifically in very open manufacturing sectors Spillover effects between sectors are found to be relatively more important than spillover effects within sectors Foreign investment in user sectors has a positive spillover effect on local suppliers, while the opposite holds for foreign investment in supplier sectors Absorption and openness play a significant role in these spillover effects

FDI Impact and Spillover: Evidence from China's Electronic and Textile Industries

Abstract: M ULTINATIONAL Corporations (MNCs) may invest in a host country when they possess ‘non-tangible productive assets’ that cannot be easily licensed but can be transferred within the firm. Direct equity participation in the host country is therefore required for MNCs to reap the rents from their nontangible productive assets, which may include technological know-how, marketing and managing skills, relationships with suppliers and customers, and reputation. If foreign direct investment (FDI) does effectively convey these assets, we should expect FDI to boost the productivity of the host country firms that receive FDI. A more complex issue is the indirect spillover effects of FDI to non-FDI domestic firms. To the extent that FDI may bring new products and technologies to the host country, non-FDI receiving domestic firms may also stand to benefit from FDI through personnel turnover, demonstration effects and knowledge spillovers. The presence of FDI in a certain industry, however, may exert adverse effect on domestic firms in that industry. By enjoying better technologies and lower production costs, firms with FDI may cut into the market share of domestic firms without FDI. In a short run imperfectly competitive market structure, the productivity of domestic firms may be reduced when sales fall, so that fixed costs are spread over fewer units. In the long run, however, the increased competition induced by the increased presence of FDI in domestic industries may force

An Empirical Investigation of the Spillover Effects of Advertising and Sales Promotions in Umbrella Branding

Abstract: The authors investigate and find evidence for advertising and sales promotion spillover effects for umbrella brands in frequently purchased packaged product categories. The authors also capture the impact of advertising (as well as use experience) on both utility mean and variance across two categories. They show that variance of the random component of utility declines over time on the basis of advertising (and use experience) in either category. This constitutes the first empirical evidence for the uncertainty-reducing role of advertising across categories for umbrella brands.

Carbon Abatement and International Spillovers

Abstract: Carbon abatement policies in large open economies affect both the allocation of domestic resources and international market prices. A change in international prices implies an indirect secondary burden or benefit for all trading countries. Based on simulations with a large-scale computable general equilibrium model of global trade and energy use, we show that international spillovers have important welfare implications for carbon abatement policies designed to meet exogenous emission reduction targets. We present a decomposition of the total welfare effect of carbon abatement policies into a primary domestic market effect (at constant international prices) and a secondary international spillover impact as a result of changes in international prices. This decomposition reveals the extent to which domestic abatement costs are increased or decreased as a result of the impact of carbon abatement on international prices.

Saving, capital flows, and the symmetric international spillover of industrial policies

Abstract: This paper considers the effects of industrial policies in dynamic economy with international trade and monopolistic competition. Special attention is paid to saving, international capital flow, and welfare of all the trading economies. The effects of industrial policies in one country spill over to its trading partners through changes in terms of trade and productivity. Considering such effects, the paper shows that industrial policies in one country increase consumption and saving of all the trading countries. The effects on welfare of foreign coun¬tries are identical to those of domestic economy. If the movement of capital among countries is perfect, the movements of consumption over time of all countries also become identical.

Fdi and human capital: a research agenda

Abstract: After a review of the literature, this paper concludes that there is potential for significant “spillover effects” from FDI into host countries. However, it identifies some limitations of this potential to do with the stock of human capital, the interest in local firms of promoting skills transfer and the competition environment. The authors suggest comparing conditions and effects between regions, particularly between East Asia and Latin America where transfer in the former has been more consistent than in the latter. They propose, further, that an analysis of the type of FDI flowing to different regions and countries could provide clues to the potential for maximising the gains to local skills accumulation. Finally, studies are needed which examine the nature of skills provided by FDI, and ways in which training institutions, business schools, for example, can complement in-service training by firms in FDI host countries ...

The Role of FDI, Exports and Spillover Effects in the Regional Development of China

Abstract: The objective of this analysis is to assess the impacts of export expansion, inward FDI, domestic investment and labour on the growth of China's Eastern, Central and Western regions using panel data over the period 1984 to 1998. A major contribution of the study is its tests for the presence of interregional spillover effects. The study indicates that both inward FDI and domestic investment stimulate growth in all three regions and for the PRC as a whole and that export expansion stimulates the growth of the PRC, Eastern and Central China, but not the West. Labour enhances the growth of the more traditional Western region, but not the more capital intensive Eastern seaboard or the PRC in its entirety. Finally, output growth spills over from the East to Western and Central China and from the Central area to Western China. These results are fully explained in the text.

Climatic implications of the Kyoto Protocol: The contribution of international spillover

Abstract: We explore the long-run impact of the Kyoto Protocol commitments to limit greenhouse gas emissions under various assumptions about the international spillover arising from actions led by the industrialised countries. International spillover comprises many complex processes including substitution due to price effects, diffusion of technology innovations, and policy and political spillovers. We represent these in terms of their aggregate impact on emission intensities over the next century. Limiting industrialised country emissions alone has limited environmental benefit if there is no international spillover; in our base case atmospheric concentrations by the end of the century rise to 730 ppm. However, this implies a large divergence of emission intensities, contrary to both empirical long term aggregate trends, and to identifiable influences towards convergence associated with economic globalisation. In contrast, if spillover leads to convergence of emission intensities by 2100, atmospheric concentrations are kept to below 560 ppm and are close to stabilising. Weargue that zero or negative international spillover, as assumed in manyanalyses, is not credible; we estimate the most likely range for the international spillover parameter in our model to be 0.5–1.0. For our base scenario this would imply a mean global average temperature change from pre-industrial levels by 2100 of 2.7–3.4 °C instead of 4.2 °C,and rising at only 0.15–0.29 °C/decade instead of 0.45 °C/decade.Long-run sea-level rise is greatly curtailed. The regional benefits to the industrialised countries are also magnified because of the spillover to developing county emissions. Although the aggregate degree of spillover is uncertain, the available evidence suggests that it will be important and environmentally beneficial in aggregate. Spillover will help to spread the global effectiveness of the Kyoto first period and subsequent commitments, and deserves much further scrutiny.

'A Far Friend is Worth More than a Good Neighbour': Proximity and Innovation in a Small Country

Abstract: This paper is about the relationship betweeninnovation and geography. Much of theliterature on regional economics and innovationsuggests that knowledge spillovers are boundedby distance. But distance is a relative conceptand how local is local? Based on a uniquedataset of 1510 Dutch firms we examine whetherinnovative activity (R&D expenditures) haslarger spillover effects on the development ofnew products for firms nearby versus those faraway. We also consider the impact of proximityto research oriented institutes. We do not findthat proximity promotes industrial knowledgespillovers between firms within theNetherlands. We do find indications thatdistance limits spillovers from universities oftechnology. Our analysis suggests that a farfriend may be worth more than a goodneighbour.

Tax Policy in the European Union: A Review of Issues and Options

Abstract: As economic integration within the European Union (EU) progresses, the interactions between the tax systems of the Member States are of growing importance. Member State tax policies can have spillover effects on other Member States and differing abilities to provide net fiscal benefits to residents may impair the efficient allocation of productive factors across the EU. These considerations have important implications for the design and coordination of tax systems in the EU. Following a survey of tax developments and a review of the criteria that should govern the tax relationships between the Member States, this paper analyzes the issues and options that Member States face when levying and coordinating their taxes on consumption, labor and capital.

Modelling the demand for M3 in the Euro area

Abstract: Modelling monetary transmission is central to understanding the role of monetary policy in the Euro area, and money demand is commonly seen as a link in that transmission mechanism. Since the beginning of the 1990s, many studies have suggested that the demand for Euro area broad money is stable over the long run because the estimation of an area-wide demand for money function provides an appropriate solution to a number of potential causes of misspecification of the single-country relations (such as spillover effects and currency substitution), and enjoys the positive consequences of a statistical averaging effect. On the other side, it must be stressed that previous benefits can be achieved at the risk of introducing parameter heterogeneity into the area-wide relationship. In order to shed some light on the issue, this study is first devoted to an analysis of the main econometric features of the money M3 demand at Euro area and single country levels, then it compares the two sets of results in a common f...

The Functional Diversity and Spillover Effects of Social Capital

Abstract: Entrepreneurial networks are functionally diverse. They can be used to access information about technologies and markets or to reduce uncertainties. A network's function affects its structure and the nature of the relationship that exists between networking effort and enterprise performance. Networks that reduce uncertainty are small and cohesive. Here, the positive relationship between co-networkers' efforts and own enterprise performance is cancelled out by a negative relationship between own networking effort and enterprise performance. In contrast, the strong positive relationship between own networking effort and enterprise performance within networks designed to provide access to information about technologies and markets dominates the negative relationship between co-networkers' efforts and own enterprise performance. This last relationship is consistent with the existence of negative spillover effects in the second type of network. Copyright 2002, Oxford University Press.

High-technology employment and R&D in cities: Heterogeneity vs specialization

Abstract: This paper uses data from high technology industry clusters in U.S. cities to establish a strong positive relationship between city, industry cluster (and university) R&D, and subsequent employment in the same industry cluster and city. Perhaps surprisingly, in view of recent results that heterogeneity favors growth, we found no evidence for spillovers from R&D in any one high technology cluster to employment in any other. However, spillover benefits from specialization appear microeconomically plausible in our context, though the data panel is too short to obtain any conclusions regarding growth.

Geographic and Network Neighbors: Spillover Effects of Telecommunications Infrastructure

Abstract: This paper tests for spatial spillover effects of state-level telecommunica- tions infrastructure investment on state output, using panel data for 48 U.S. states from 1970 through 1997. As information and communication technologies support more indus- trial locational freedom, states may use telecommunications infrastructure investment as a competitive tool for attracting factors of production. In a production-function framework, this effect would manifest itself as a negative output spillover effect from telecommunica- tions infrastructure investment. Findings indicate that a state benefits from its own telecommunications infrastructure, but telecommunications investment by other states has a negative impact on its output growth path, and proximity amplifies this negative spillover effect.

Externalities in rural development evidence for China

Abstract: The author tests for external effects of local economic activity on consumption and income growth at the farm-household level using panel data from four provinces of post-reform rural China. The tests allow for non-stationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from under-investment in certain externality-generating activities, of which agricultural development emerges as the most important.

Recent Impacts of Foreign Direct Investment on Growth and Restructuring in Central European Transition Countries

Abstract: Recent developments have revealed that (i) advanced transition countries have received most of the FDI to date, especially greenfield projects; (ii) more countries than in the mid?1990s are resorting to FDI in order to accelerate privatization (Czech Republic, Poland and Slovakia); and (iii) countries in South-Eastern Europe are lagging behind in terms of attracting FDI. The impact of FDI on the balance of payments shows that this inflow of capital also creates related outflows. It can further be seen that (i) FDI may increase the trade deficit and the service sector deficit; (ii) FDI-related income outflows may become high; and (iii) problems related to deficit-financing can be avoided by maintaining a country's attractiveness to further investment and encouraging export-oriented investments and spillover effects. With respect to the impact of FDI on the government budget, we conclude that (i) FDI incentives are no substitute for a favourable investment environment; (ii) general investment incentives do not solve regional and labour market problems; (iii) government revenue increases in the wake of FDI on account of high profit rates in the foreign sector; (iv) government revenues can be lost on account of tax allowances; and (v) economic growth and income generation through FDI increase the tax base. Structural change in manufacturing is closely linked to the penetration of foreign capital. Most recent 1999 data show that (i) foreign penetration is high in Hungary and increasing in Poland and the Czech Republic, while remaining low in Slovenia; (ii) the foreign sector enjoys advantages in terms of labour productivity, export propensity, investment propensity and profit rates; (iii) Hungary lies ahead of other countries where the upgrading of export structure is concerned; (iv) the foreign sector specializes in high-tech and export-oriented industries, the domestic sector in low-tech and domestic-market-oriented industries, thus leading to the emergence of an unhealthy duality; and (v) research confirms the existence of technology transfer through FDI, but finds no productivity spillover to the domestic sector.

Nonlinear duopoly games with positive cost externalities due to spillover effects

Abstract: A Cournot duopoly game is proposed where the interdependence between the quantity-setting firms is not only related to the selling price, determined by the total production through a given demand function, but also on cost-reduction effects related to the presence of the competitor Such cost reductions are introduced to model the effects of know-how spillovers, caused by the ability of a firm to take advantage, for free, of the results of competitors' Research and Development (R&D) results, due to the difficulties to protect intellectual properties or to avoid the movements of skilled workers among competing firms These effects may be particularly important in the modeling of high-tech markets, where costs are mainly related to R&D and workers' training The results of this paper concern the existence and uniqueness of the Cournot–Nash equilibrium, located at the intersection of non-monotonic reaction curves, and its stability under two different kinds of bounded rationality adjustment mechanisms The effects of spillovers on the existence of the Nash equilibrium are discussed, as well as their influence on the kind of attractors arising when the Nash equilibrium is unstable Methods for the global analysis of two-dimensional discrete dynamical systems are used to study the structure of the basins of attraction

North-South Trade, Knowledge Spillovers and Growth*

Abstract: The endogenous growth literature has stimulated empirical research into links between trade and growth in general and international knowledge spillovers in particular. Results relating to the latter have been mixed and the issue of the appropriate construction of the spillover variable remains contentious. In this paper we develop measures taking account of whether knowledge is a public or private good in the donor and recipient countries, and include these in a dynamic panel model of growth. For a sample of five OECD donor countries and 52 developing recipient countries, we conclude that it matters little whether we treat knowledge as a private or public good in the donor but that spillovers, if they exist, act as a public good in the recipient. We also find that the level of trade is important in facilitating knowledge spillovers from donors to recipients.

Stock and Bond Market Interaction: Does Momentum Spill Over?

Abstract: This paper examines the interaction between momentum in equities and corporate bonds. We find that investment grade corporate bonds do not exhibit momentum at the three to twelve month horizons; rather there is evidence of reversals. There is, however, significant evidence of a momentum spillover from equities to investment grade corporate bonds of the same firm. Specifically, firms earning high (low) equity returns over the previous year earn high (low) bond returns the following year. The spillover results are stronger among firms with lower-grade debt and higher equity trading volume, and are robust to various risk and liquidity controls. In examining the source of the spillover, we find that the bond ratings of firms with positive equity momentum continue to improve in the future suggesting that delayed reaction to the information in past equity prices about declining default risk is a likely source of the spillover effect.