Showing papers on "Spillover effect published in 2004"
TL;DR: In this article, the authors evaluate the empirical evidence on productivity, wage, and export spillovers in developing, developed, and transition economies and conclude that robust empirical support for positive spillovers is at best mixed.
Abstract: Governments the world over offer significant inducements to attract investment, motivated by the expectation of spillover benefits to augment the primary benefits of a boost to national income from new investment. There are several possible sources of induced spillovers from foreign direct investment. This article evaluates the empirical evidence on productivity, wage, and export spillovers in developing, developed, and transition economies. Although theory can identify a range of possible spillover channels, robust empirical support for positive spillovers is at best mixed. The article explores the reasons and concludes with a review of policy aspects.
1,367 citations
TL;DR: This paper found that FDI can benefit innovation activity in the host country via spillover channels such as reverse engineering, skilled labor turnover, demonstration effects, and supplier-customer relationships.
609 citations
TL;DR: In this article, the authors identify possible transmission mechanisms for export spillovers and test for their existence on a large panel of firms in the UK and confirm positive spillover effects from MNEs on the decision to export of UK-owned firms as well as on their export propensity.
454 citations
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TL;DR: The authors found that firms run by owners that worked for multinationals in the same industry immediately prior to opening up their own firm have higher productivity growth than other domestic firms, suggesting that these entrepreneurs bring with them some of the knowledge accumulated in the multinational which can be usefully employed in the domestic firm.
Abstract: While there has been a large empirical literature on productivity spillovers from foreign to domestic firms this literature treats the channels through which these spillover effects work as a black box. This paper attempts to fill this gap in the literature. Our results suggest that firms which are run by owners that worked for multinationals in the same industry immediately prior to opening up their own firm have higher productivity growth than other domestic firms. This suggests that these entrepreneurs bring with them some of the knowledge accumulated in the multinational which can be usefully employed in the domestic firm. We do not find any positive effects on firm level productivity if the owner had experience in multinationals in other industries, or received training by multinationals.
434 citations
TL;DR: In this article, the impact of foreign investment in the Polish dairy sector is analyzed. But the authors focus on the impact on small suppliers and show that FDI does not cause a rapid consolidation of the supply base, instead, foreign companies introduce farm assistance programs to overcome market imperfections.
399 citations
TL;DR: In this article, the authors used a production function framework to estimate the impact of technology transfer from FDI on the growth of sales of domestic firms in Estonia during the period from 1994 to 1999.
377 citations
TL;DR: This article examined how political geography and politician identity impacts on public good provision and provided evidence that the nature of this relationship varies by type of public good, for high spillover public goods residential proximity to elected representative matters.
Abstract: This paper uses village and household survey data from South India to examine how political geography and politician identity impacts on public good provision. We provide evidence that the nature of this relationship varies by type of public good. For high spillover public goods residential proximity to elected representative matters. In contrast, for low spillover public goods sharing the politician’ s group identity is what matters. (JEL: D78, H40)
352 citations
TL;DR: The authors argue that there is a gap between knowledge and exploitable knowledge or economic knowledge and that entrepreneurship is an important mechanism in driving that selection process hence in creating diversity of knowledge, which in turn serves as a mechanism facilitating the spillover of knowledge.
Abstract: While the neoclassical growth theory considered economic growth as a process of mere accumulation of production capital, the endogenous growth theory shifted the lens to the importance of knowledge in the production process and its potential to create spillovers. We argue in this paper that there is a gap between knowledge and exploitable knowledge or economic knowledge. Economic knowledge emerges from a selection process across the generally available body of knowledge, actively driven by economic agents. This paper suggests that entrepreneurship is an important mechanism in driving that selection process hence in creating diversity of knowledge, which in turn serves as a mechanism facilitating the spillover of knowledge. We provide empirical evidence that regions with higher levels of entrepreneurship indeed exhibit stronger growth in labor productivity.
330 citations
TL;DR: In this article, a systematic investigation of various carbon supports was used to better understand how hydrogen spillover affects hydrogen storage on carbon materials and showed that the baseline adsorption of the carbon was the predominant factor in the magnitude of overall hydrogen uptake.
Abstract: Hydrogen storage in carbon materials can be increased by hydrogen spillover from a supported catalyst; a systematic investigation of various carbon supports was used to better understand how hydrogen spillover affects hydrogen storage on carbon materials. Secondary spillover experiments effectively eliminated experimental variables associated with primary spillover, evidenced by materials clustering around the carbon type for a variety of supported catalyst-carbon mixtures. Providing a supported catalyst to act as a hydrogen source enhances the overall hydrogen uptake of a carbon material; for example, simple mixing of carbon nanotubes with supported palladium increased the uptake of the carbons by a factor of three. However, the baseline adsorption of the carbon was the predominant factor in the magnitude of the overall hydrogen uptake, even when hydrogen spillover was active. Three observations illustrated that a dynamic steady-state model is needed for predictive capacity of hydrogen spillover.
297 citations
TL;DR: This paper examined the relationship between the local levels of human capital and firm formation rates and found that formation rates differ with the share of adults with college degrees, especially for industries that normally require college-educated founders.
236 citations
TL;DR: In this article, it is shown that emission sources with external learning effects should be faced with a higher tax than emission sources that have only autonomous technological change, if at least some of the effect is external to the firm.
TL;DR: In this paper, the authors report new empirical evidence on the determinants of R&D co-operation and analyze the impact of external, pure and rent spillovers on the innovation capacity of French firms.
TL;DR: This article explored how husbands' and wives' retirement behavior is influenced by their own financial incentives from Social Security and private pensions and by spillover effects from their spouses' incentives, and found that men are very responsive to their wives' financial incentives but that women are not responsive to husbands' incentives and present evidence to suggest that this may be due to asymmetric complementarity of leisure.
Abstract: The typical family in the US is now a dual-earner couple, yet there are relatively few studies that examine the retirement decision in a household framework, particularly outside the context of a structural model. This paper explores how husbands’ and wives’ retirement behavior is influenced by their own financial incentives from Social Security and private pensions and by “spillover effects” from their spouses’ incentives. Spillover effects are possible due to income effects and complementarity of leisure; if significant, their omission will bias estimates of the effect of changing Social Security policy on retirement. I estimate reduced-form retirement models and find that men and women are similarly responsive to their own incentives: an increase of $1,000 in the return to additional work is associated with a reduction of 0.9% of baseline retirement for men and 1.3% of baseline retirement for women. I find that men are very responsive to their wives’ financial incentives but that women are not responsive to their husbands’ incentives and present evidence to suggest that this may be due to asymmetric complementarities of leisure. Policy simulations indicate that estimates of the effect of a policy change on the probability of men working at age 65 are biased by 13% to 20% if spillover effects are omitted.
TL;DR: In this article, a two-country model with monopolistic competition and price stickiness is employed to investigate the implications for macroeconomic stability and the welfare properties of three international policy arrangements: cooperative, non-cooperative and monetary union.
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TL;DR: This paper found that neighborhoods that experienced more bank mergers are subjected to higher interest rates, diminished local construction, lower prices, an influx of poorer households, and higher property crime in subsequent years.
Abstract: Using a unique sample of commercial loans and mergers between large banks, we provide microlevel (within-county) evidence linking credit conditions to economic development and find a spillover effect on crime. Neighborhoods that experienced more bank mergers are subjected to higher interest rates, diminished local construction, lower prices, an influx of poorer households, and higher property crime in subsequent years. The elasticity of property crime with respect to merger-induced banking concentration is 0.18. We show that these results are not likely due to reverse causation, and confirm the central findings using state branching deregulation to instrument for bank competition.
TL;DR: This article found that more working mothers than fathers in the sample experienced negative family-to-work spillover, whereas family life satisfaction was one of the strongest predictors for both mothers and fathers.
Abstract: Prior research has inconsistently documented the gendered nature of negative spillover between the domains of home and work. Little is known about predictors of negative spillover for employed mothers and fathers. Using the 1997 wave of the National Study of the Changing Workforce, this study’s purpose was twofold: to determine if a difference exists in negative spillover for working mothers and fathers and to identify shared and unique predictors of spillover for both groups. Findings reveal that more working mothers than fathers in the sample experienced negative family-to-work spillover. Time spent performing household chores and caring for children by respondent and spouse did not predict negative spillover for mothers, although caring for a sick child was a significant predictor for fathers. Marital satisfaction was not a significant predictor of spillover, whereas family life satisfaction was one of the strongest predictors for both mothers and fathers.
TL;DR: In this article, the authors found that the presence of foreign ownership has a positive and significant effect on domestic firms' productivity and that trading with more advanced countries helps China gain access to new technology and information, which improves its productivity and enables it to compete in international markets.
Abstract: Using firm data from the 1995 Third Industrial Census of China, this paper finds that the presence of foreign ownership has a positive and significant effect on domestic firms’ productivity. Moreover, trading with more advanced countries helps China gain access to new technology and information, which improves its productivity and enables it to compete in international markets. It is found that China's imports from OECD and the four Asian Tigers, and exports to OECD have positive effects on domestic firms’ productivity. By dividing industries into high-technology-gap and low-technology-gap groups, it is found that the spillover effects of FDI are larger for the low-technology-gap group than for the high-technology-gap group. However, the estimation results of the trade-induced technology spillover effect support the technology-gap learning theory and the significance of importing appropriate technology.
TL;DR: In this paper, the authors examined the impact of university spillovers on the locational choice of firm formation and found that younger start-ups settle near universities with a high academic output and a high number of students in both natural and social science.
Abstract: This study examines the impact of university spillovers on the locational choice of firm formation. Based on a unique and hand-collected data set of high-technology start-ups publicly listed in Germany, this paper tests the propositions that geographic proximity to the university is influenced by the kind of science and type of knowledge spillover. The results provide evidence that younger high technology start-ups (less than eight years old) settle near universities with a high academic output and a high number of students in both natural and social science. Thus, spillover of tacit knowledge has an impact on the firms' geographic decision. Older firms, however, only locate closer to technical universities in order to satisfy demand for traditional German industries such as engineering and machinery.
TL;DR: In this article, the authors examined the role of agglomeration economies and other locational attributes in determining where new firms locate in the information and communications technology (ICT) sector among 580 municipalities in the Netherlands.
Abstract: In this research we look at the factors that determine new firm formation in the information and communications technology (ICT) sector among 580 municipalities in the Netherlands. In particular, we examine the role of agglomeration economies and other locational attributes in determining where new firms locate. Both proximity (contiguous) and heterogeneous (non-contiguous) structures at the local, regional and national level are significant when considering localised firm formation. This result supports previous evidence that high-technology enterprises tend to co-locate in areas where economic activity is spatially dense. The major point of our argument is that controversial research results in the literature concerning explanatory spatial circumstances that most favorably induce dynamic and innovative externalities (to a large extent) can be attributed to the lack of consistent spatial research designs that allow the modelling of multiple spatial scale and composition effects. More specifically, we argue that the incubation hypothesis needs adjusting to the appropriate spatial levels and units of analysis: that of the agglomerated region. Finally, we argue that the lack of consistent inclusion of life-cycle aspects of firms in the present mainstream literature on dynamic externalities also contributes to controversies in research outcomes. These findings are important for spatial economic policy indicating that investment in new technologies and economic structures should enhance the prospects for spillover effects at the local level.
TL;DR: In this article, the authors model how the structure and function of a network of firms affects their aggregate innovativeness, and find that the marginal effect on the impact of spillover intensity is non-monotonic.
Abstract: This paper models how the structure and function of a network of firms affects their aggregate innovativeness. Each firm has the potential to innovate, either from in-house R&D or from innovation spillovers from neighboring firms. The nature of innovation spillovers depends upon network density, the commonality of knowledge between firms, and the learning capability of firms. Innovation spillovers are modelled in detail using ideas from organizational theory. Two main results emerge: (i) the marginal effect on innovativeness of spillover intensity is non-monotonic, and (ii) network density can affect innovativeness but only when there are heterogeneous firms.
TL;DR: In this article, the authors investigated to what extent globalization and regional integration lead to increasing equity market interdependence and found that these regime switches are both statistically and economically important, and they found evidence for contagion from the US market to a number of local European equity markets during periods of high world market volatility.
Abstract: This paper investigates to what extent globalization and regional integration lead to increasing equity market interdependence. I focus on the case of Western Europe, as this region has gone through a unique period of economic, financial, and monetary integration. More specifically, I quantify the magnitude and time-varying nature of volatility spillovers from the aggregate European (EU) and US market to 13 local European equity markets. To account for time-varying integration, I allow the shock sensitivities to change through time by means of a regime-switching model. I find that these regime switches are both statistically and economically important. While both the EU and US shock spillover intensity has increased over the 1980s and 1990s, the rise is more pronounced for EU spillovers. In most countries, shock spillover intensities increased most strongly in the second half of 1980s and the first half of the 1990s. Increased trade integration, equity market development, and low inflation are shown to have contributed to the increase in EU shock spillover intensity. Finally, I find some evidence for contagion from the US market to a number of local European equity markets during periods of high world market volatility. Keywords: Volatility Spillovers, Regime Switching, Contagion, EMU, Financial Integration
TL;DR: Van Stel and Nieuwenhuijsen as discussed by the authors investigated the impact of local competition on innovation and growth in 40 Dutch regions and found that local competition is important particularly for economic growth in industry sectors (manufacturing and construction).
Abstract: Van Stel A. J. and Nieuwenhuijsen H. R. (2004) Knowledge spillovers and economic growth: an analysis using data of Dutch regions in the period 1987–1995, Reg. Studies 38, 393–407. The importance of knowledge spillovers for achieving innovation and economic growth is widely recognized. It is not straightforward which types of spillover are most effective: intra-sectoral spillovers or inter-sectoral spillovers. We investigate this controversy using a model of regional growth. The model also deals with the impact of local competition on innovation and growth. The model is estimated using sectoral data for 40 Dutch regions. We find that local competition is important particularly for economic growth in industry sectors (manufacturing and construction), while diversity, a proxy for inter-sectoral spillovers, is important particularly for growth in service sectors. We find no effect for specialization (a proxy for intra-sectoral spillovers).
TL;DR: The authors found that only about 20% of the aggregate effects of public investment in highways in the US are captured by the direct effects on each state output of public investments in the state itself.
Abstract: The empirical results reported in this paper suggest that only about 20% of the aggregate effects of public investment in highways in the US are captured by the direct effects on each state output of public investment in the state itself. The remaining 80% correspond to the spillover effects from public investment in highways in other states. This result may provide an answer to the paradox in the literature that the findings of large effects at the aggregate level have not been matched at the regional level. This is because regional analysis has typically ignored the possible existence of spillover effects.
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TL;DR: In this article, the impact of R&D investment in the high-tech sector on productivity growth within the traditional industries was investigated, and it was found that the average rate of return in hightech firms is much greater than that estimated for other industries.
Abstract: This study sets out to estimate the impact of R&D on productivity within the private sector, with further analysis of the different impacts of R&D within high-tech and traditional manufacturing firms. We also attempt to examine the spillover effects from R&D investment in the high-tech sector on productivity growth within the traditional industries. Using a sample of 136 large manufacturing firms during the period 1994-2000, we develop an extended version of the Cobb-Douglas production function model, and our findings suggest that Taiwan's R&D investment had a significant impact on firm productivity growth, with output elasticity standing at around 0.18. When the sample is divided into high-tech and traditional firms, the R&D output elasticity in high-tech firms is significantly greater than that found in traditional firms. In addition, the average rate of return in high-tech firms is much greater than that estimated for other industries. Besides, our empirical results show that, although significant, the impact of R&D investment from the high-tech sector, on the productivity growth of traditional firms, is rather limited.
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TL;DR: In this paper, the authors consider an R&D-driven endogenous growth model in which innovation is risky and agents are risk averse, and examine the impact of redistributive taxation and compute socially optimal tax rates.
Abstract: We consider an R&D-driven endogenous growth model in which innovation is risky and agents are risk averse. Growth is determined by the occupational choice of agents who can either work in production for a wage or become entrepreneurs. In this context, we examine the impact of redistributive taxation and compute socially optimal tax rates. Redistribution acts as social insurance, thus encouraging innovation and accelerating growth. The general equilibrium effects of the reallocation of labour induced by taxation can offset the direct distributive impact of taxes and result in a Pareto improvement. Optimal tax rates are a humpshaped function of the intertemporal spillover effect.
TL;DR: Zhang et al. as discussed by the authors investigated the relationship between international capital inflows and economic growth through financial sector evolution, rather than simply focusing on the promotion of the domestic investment rate and spillover efficiency.
Abstract: 1. Introduction The issue of economic prosperity is often linked to massive inflows of foreign direct investment (hereafter referred to as FDI) into a nation, and the impact of FDI on economic growth has been argued considerably in the development and economic growth literature for many years. Many researchers have conducted studies to investigate the fundamental theories of FDI, various macroeconomic variables that influence FDI, the impact of economic integration on the movements of FDI, and the advantages and disadvantages of FDI (see Yusop 1992; Jackson and Markowski 1995; Cheng and Yum 2000; Lira and Maisom 2000). Most of them agree that there exists a positive causal relationship between FDI and economic performance, either in the short run, or in the long run, or both. Zhang (2001) has studied the causal relationship between FDI and economic performance in both East Asian and Latin American countries. Zhang's findings suggest that there is considerable cross-country variation and differences between East Asia and Latin America in the causal patterns of FDI-growth links. He further concluded that a key advantage created by FDI to recipient countries is technology transfer and spillover efficiency. This advantage, however, does not automatically occur, but rather depends on recipient countries' absorptive capabilities, such as a liberal trade policy, human capital development, and an export-oriented FDI policy. Investigations of the causal relationship between economic growth and FDI inflows have, therefore, a significant role in economic development. If there is a unidirectional causality from economic growth to FDI, this implies that national income growth can be treated as a catalyst in attracting inflows of FDI. Conversely, if the unidirectional causality runs from FDI to economic performance, this would strongly suggest that FDI not only stimulates the economic growth rate, but also leads to fixed capital formation and employment augmentation (Borensztein, De Gregorio, and Lee 1998; Lim and Maisom 2000; Zhang 2001). If a bi-directional causality exists between these variables, then both FDI and economic growth would have a reinforcing causal relationship. Nevertheless, these previous studies ignored the role played by domestic financial sector development in examining the long-run relationship, and short-run causality, between FDI and economic growth. Indeed, the speed of technological innovation and patterns of economic growth of a country are highly dependent on the evolution of the domestic financial sector, which acts as a mechanism to channel financial resources between surplus and deficit units, as well as transferring technology embodied in FDI inflows. Financial systems that are more effective at pooling the savings of individuals can profoundly affect economic development. Besides the direct effect of better savings on capital accumulation, better savings mobilization can improve resource allocation and boost technological innovation (Levine 1997). Although existing theories have not yet formally identified a direct link between financial development, economic growth, and foreign direct investment, Hermes and Lensink (1999) and Bailliu (2000) attempted to study the significance of both foreign capital inflows and financial development as a channel for promoting growth. Different from previous studies, both studies investigated the relationship between international capital inflows and economic growth through financial sector evolution, rather than simply focusing on the promotion of the domestic investment rate and spillover efficiency. They concluded that inflows have both a positive spillover efficiency and a significant impact on economic growth, if the domestic financial sector has achieved a certain minimum level of development. This article aims to re-estimate the links between FDI and economic growth by including the development of the domestic financial sector in three developed countries (Japan, the United Kingdom, and the United States) and select East Asian countries (Indonesia, Korea, Malaysia, the Philippines, Singapore, and Thailand). …
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TL;DR: In this paper, the authors explore empirically the effects of these activities on technology spillovers from FDI using data for industrial firms in Argentina over the period 1992-1996, and find that significant results can be obtained incorporating subsidiaries' own technological activities as an explanatory variable of the spillover process.
Abstract: The usual perspective on technology spillovers from FDI sees the MNC subsidiary as a passive actor. It presumes that the technological superiority that spreads from subsidiaries to other firms in the host economy is initially created outside it by MNC parent companies, and is delivered to subsidiaries via international technology transfer. The role of subsidiaries is little more than to act as a ‘leaky’ container lying between the technology transfer pipeline and the absorption of spillovers by domestic firms. This paper suggests a different model in which a substantial part of the potential for spillover is created within local subsidiaries as a result of their own knowledge-creating and accumulating activities in the host economy. We explore empirically the effects of these activities on technology spillovers from FDI using data for industrial firms in Argentina over the period 1992-1996. The analysis suggests that significant results can be obtained incorporating subsidiaries’ own technological activities as an explanatory variable of the spillover process.
TL;DR: In this article, the impact of R&D investment in the high-tech sector on productivity growth within the traditional industries was investigated, and it was found that the average rate of return in hightech firms is much greater than that estimated for other industries.
Abstract: This study sets out to estimate the impact of R&D on productivity within the private sector, with further analysis of the different impacts of R&D within high-tech and traditional manufacturing firms. We also attempt to examine the spillover effects from R&D investment in the high-tech sector on productivity growth within the traditional industries. Using a sample of 136 large manufacturing firms during the period 1994–2000, we develop an extended version of the Cobb-Douglas production function model, and our findings suggest that Taiwan's R&D investment had a significant impact on firm productivity growth, with output elasticity standing at around 0.18. When the sample is divided into high-tech and traditional firms, the R&D output elasticity in high-tech firms is significantly greater than that found in traditional firms. In addition, the average rate of return in high-tech firms is much greater than that estimated for other industries. Besides, our empirical results show that, although significant, the impact of R&D investment from the high-tech sector, on the productivity growth of traditional firms, is rather limited.
TL;DR: In this paper, the long-run component for comovement can be examined and spillover effects tested for in mean and volatility, the latter is suggestive of policy co-ordination.
Abstract: Recent evidence has suggested that a model capable of capturing multiple volatility dynamics best describes daily exchange rate volatility. Estimation of a model that can capture long-run and short-run volatility movement also allows issues relating to financial and economic integration between countries to be examined. More specifically, the long-run component for comovement can be examined and spillover effects tested for in mean and volatility, the latter of which is suggestive of policy co-ordination. Using a series of dollar exchange rates supportive evidence is reported of a long-run/short-run decomposition for volatility, and existence of three long-run volatility trends, one for the European series and a trend each for the non-European series. Further, significant volatility spillovers are reported, notably amongst the European series. These results are thus supportive of increased convergence between these economies.
TL;DR: In this article, the effects of cooperative R&D in two vertically related duopolies, which are two final-good manufacturers and two input suppliers, with horizontal and vertical spillovers, were analyzed.