Showing papers on "Spillover effect published in 2006"

Entrepreneurship and Economic Growth

Abstract: Public policy spanning a broad range of contexts, ranging from the European Union, to states, cities and local communities around the globe, has turned to entrepreneurship to provide the engine for economic growth, competitiveness in globally linked markets, and jobs. This book explains why entrepreneurship has emerged as a bona fide instrument of growth policy. The knowledge spillover theory of entrepreneurship suggests that entrepreneurship provides a crucial mechanism in the process of economic growth by serving as a conduit for knowledge spillovers. Investments in new knowledge and ideas may not automatically spill over and result in commercialization, as has typically been assumed in models of economic growth. Rather, the existence of what is introduced as the knowledge filter impedes the spillover and commercialization of investments in new ideas and knowledge. By penetrating the knowledge filter and facilitating the spillover of knowledge that might otherwise not be commercialized, entrepreneurship provides the missing link to economic growth. This new focus of entrepreneurship as a conduit transmitting the spillover of knowledge generates a series of theoretical propositions, involving not just the impact of entrepreneurship on economic performance and growth, but also the very nature of entrepreneurship. The theoretical propositions range from positing that entrepreneurial opportunities are not exogenously given but rather endogenously and systematically created by investments in new knowledge and ideas, to the importance of geographic proximity between entrepreneurial activity and knowledge sources, the impact of location on entrepreneurial performance, and the new roles for board, managers and modes of finance in entrepreneurial firms accessing and absorbing knowledge spillovers. These propositions are subjected to systematic econometric scrutiny and verification using both aggregate data to analyze the links between entrepreneurship and growth, as well as firm-level data to analyze the impact of knowledge spillover on entrepreneurial location, performance, boards, managers and mode of finance. The resulting empirical evidence supports the knowledge spillover of entrepreneurship not only by linking entrepreneurship to economic growth and performance, but also by identifying how the organization and strategy of entrepreneurial firms are influenced by the need to access, absorb and commercialize external knowledge spillovers. The book concludes that the new millennium may not be so much about the process of Joseph Schumpeter's creative destruction, where entrepreneurial startups displace and ultimately drive incumbent company's out of business, but rather characterized by creative construction. Globalization and its concomitant outsourcing and offshoring is the source of the "destruction", especially in terms of lower skilled jobs. By contrast, in the 21st century global economy, entrepreneurship is constructive by commercializing investments in knowledge and ideas that might never have been commercialized but ultimately result in growth, global competitiveness and employment. Thus, the emergence of entrepreneurship policy can be interpreted as the attempt to generate entrepreneurial based economic growth by creating an entrepreneurial economy.

Spillover edge effects: the dispersal of agriculturally subsidized insect natural enemies into adjacent natural habitats.

Abstract: The cross-edge spillover of subsidized predators from anthropogenic to natural habitats is an important process affecting wildlife, especially bird, populations in fragmented landscapes. However, the importance of the spillover of insect natural enemies from agricultural to natural habitats is unknown, despite the abundance of studies examining movement in the opposite direction. Here, we synthesize studies from various ecological sub-disciplines to suggest that spillover of agriculturally subsidized insect natural enemies may be an important process affecting prey populations in natural habitat fragments. This contention is based on (1) the ubiquity of agricultural–natural edges in human dominated landscapes; (2) the substantial literature illustrating that crop and natural habitats share important insect predators; and (3) the clear importance of the landscape matrix, specifically distance to ecological edges, in influencing predator impacts in agroecosystems. Further support emerges from theory on the importance of cross-boundary subsidies for within site consumer– resource dynamics. In particular, high productivity and temporally variable resource abundance in agricultural systems are predicted to result in strong spillover effects. More empirical work examining the prevalence and significance of such natural enemy spillover will be critical to a broader understanding of fragmentation impacts on insect predator–prey interactions.

Development and validation of a multidimensional scale of perceived work-family positive spillover.

Abstract: Although the benefits of participating in both work and family have been recognized for more than 30 years (Sieber, 1974), limited empirical research exists. One reason for this oversight is the absence of a well-established scale to measure these benefits. We present a new multidimensional scale of perceived work–family positive spillover. We conducted two studies that aided the development and validation of this scale. Our scale measures three types of work–family positive spillover: behavior-based instrumental positive spillover, value-based instrumental positive spillover, and affective positive spillover. Each of these three types of positive spillover occurs in two directions: from work to family and from family to work. We further evaluate the scale’s construct validity in relation to role satisfaction and self-reported mental health.

When Will a Brand Scandal Spill Over, and How Should Competitors Respond?

Abstract: Three experiments identify conditions under which a brand scandal spills over and negatively affects attitudes and beliefs about the product category and about competing brands. The research also examines factors that may enhance or reduce the likelihood of spillover effects and strategies for responding to scandal spillover.

Types of work-family interface : well-being correlates of negative and positive spillover between work and family

Abstract: The aim of the present study was to test the structure of the work-family interface measure, which was intended to take into account both the positive and negative spillover between work and family demands in both directions. In addition, the links among the types of work-family spillover and the subjects' general and domain-specific well-being were examined. The sample (n = 202) consisted of Finnish employees, aged 42, who had a spouse/partner. Confirmatory factor analyses indicated that a four-factor model, including negative work-to-family spillover, negative family-to-work spillover, positive work-to-family spillover, and positive family-to-work spillover, was superior compared to the other factor models examined. Path analysis showed, as hypothesized, that the negative work-to-family spillover was most strongly related to low well-being at work (job exhaustion) and next strongly to low general well-being (psychological distress), whereas the negative family-to-work spillover was associated with low well-being in the domain of family (marital dissatisfaction). Positive work-to-family spillover was positively related both to well-being at work and general well-being. Inconsistent with our expectations, positive family-to-work spillover was not directly related to any of the well-being indicators examined.

Development : a study of the Indian manufacturing industry

Abstract: If infrastructure tends to generate spillover externalities, as has been the assumption in much of the development literature, one may reasonably look for evidence of such indirect effects in the accounts of manufacturing industries. Empirical support for this assumption has so far been ambiguous. This analysis of Indian data, however, reveals substantial externality effects from the states' infrastructure to manufacturing productivity. The analysis separates the direct effects of roads and electricity, as mediated by the infrastructure services purchased by manufacturing industries along with other intermediate inputs, from the indirect effects, as measured by the impact of infrastructure capacity on the Solow productivity residual. In the 20 years from 1972 to 1992, growth of road and electricity-generating capacity seems to have accounted for nearly half the growth of the productivity residual of India's registered manufacturing.

Does Sovereign Debt Ratings News Spillover to International Stock Markets

Abstract: The evidence here indicates that sovereign debt rating and credit outlook changes of one country have an asymmetric and economically significant effect on the stock market returns of other countries over 1989-2003. There is a negative reaction of 51 basis points (two-day return spread vis-a-vis the US) to a credit ratings downgrade of one notch in a common information spillover around the world. Upgrades, however, have no significant impact on return spreads of countries abroad. Closeness (e.g., geographic proximity) and emerging market status amplify the effect of a spillover. Downgrade spillover effects at the industry level are more pronounced in traded goods and small industries.

Empirical analysis of transportation investment and economic development at state, county and municipality levels

Abstract: Numerous studies have found positive correlation between transportation infrastructure investment and economic development. Basically these studies use a conventional production function model augmented by a public capital input, mainly highways, rail and other transportation facilities. While the range of the measured economic growth effects varies widely among studies, the positive elasticity between transportation investment and economic development is now commonly accepted. Still a major puzzling issue is that the magnitude of the measured effect seems to decline significantly as the econometric model is further refined, mainly with regard to space and time lags. That is, the use of national or state data produces elasticity results, which are much larger than when using county or municipality data. Similarly, when we introduce into the econometric model a lag between the times when the transportation investments are made and when the economic benefits transpire, the measured elasticities decline with the size of the lag. Thus, the main objective of this paper is to investigate these issues analytically and empirically and provide a plausible explanation. We do so by using alternative econometric models, applying them to a database, which is composed of longitudinal state, county and municipality observations from 1990 to 2000. The key result is that transportation investments produce strong spillover effects relative to space and time. Unless these factors are properly accounted for many reported empirical results are likely to be overly biased, with important policy implications.

Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis

Abstract: This paper reviews the empirical literature on technology spillovers from foreign direct investment (FDI) in developing countries. The sample includes 32 studies that model the contribution of FDI presence to local productivity in the host country through spillover effects such as those associated with technology transfer and superior managerial know-how. In our quantitative meta-analysis, study estimates of spillover effects are regressed on a number of study characteristics in order to determine what aspects of study design and data characteristics explain the magnitude, significance, and direction of spillovers from FDI. The meta-regression results suggest that spillover effects are more pronounced when studies measure the effect of FDI spillovers on output, and are more likely to be significant and positive for Asian countries. Results also highlight the possibility that the documented spillover effects from FDI in developing countries may be partly a product of model misspecification.

Unemployment Fluctuations with Staggered Nash Wage Bargaining

Abstract: A number of authors have recently emphasized that the conventional model of unemployment dynamics due to Mortensen and Pissarides has difficulty accounting for the relatively volatile behavior of labor market activity over the business cycle. We address this issue by modifying the MP framework to allow for staggered multiperiod wage contracting. What emerges is a tractable relation for wage dynamics that is a natural generalization of the period-by-period Nash bargaining outcome in the conventional formulation. An interesting side-product is the emergence of spillover effects of average wages on the bargaining process. We then show that a reasonable calibration of the model can account well for the cyclical behavior of wages and labor market activity observed in the data. The spillover effects turn out to be important in this respect.

Examining the relationship between work-family spillover and sleep quality.

Abstract: The present study examined the relationship between work-family spillover, job characteristics, and sleep quality in a sample of health care workers (N = 168) recruited from 3 Canadian hospitals. A multiple regression analysis revealed that positive family-to-work spillover is associated with better sleep quality, after controlling for age, physical health, depressive symptomatology, work situation, and number of children. These findings are discussed within a theoretical framework drawing on the concepts of effort and recovery.

How much does the fishery at Apo Island benefit from spillover of adult fish from the adjacent marine reserve

Abstract: The contribution of the no-take marine reserve at Apo Island, Philippines, to local fishery yield through "spillover" (net export of adult fish) was estimated. Spatial patterns of fishing effort, yield, and catch rates around Apo Island were documented daily in 2003-2004. Catch rates were higher near the reserve (by a factor of 1.1 to 2.0), but fishing effort was often lowest there. Higher catch rates near the reserve were more likely due to spillover than to low fishing intensity. Lower fishing effort near the reserve may have been due to 1) weather patterns, 2) traditional importance of other fishing grounds, 3) high variability in catch rates, 4) lower market value of target species, and 5) social pressures. The yield taken near the reserve was only 10% of the total yield, but the actual spillover contribution was probably much less than this. This study is one of the few to estimate the spillover contribution to overall yield and to document the responses of fishermen to spillover.

Spillover Effects: How Consumers Respond to Unexpected Changes in Price and Quality

Abstract: This article examines how unexpected changes in the marketing mix of one product in a retail setting can influence demand for other, unrelated, items. Results from two laboratory studies show that spillover effects can occur in response to both positive and negative changes in either the price or quality of a product, such that positive changes increase total spending on other items and negative changes reduce it. The results also demonstrate that an attributional process underlies these effects, indicating that consumers experience specific affective responses directed at the retailer that lead them either to reward or punish the retailer accordingly.

Two Flaws in Business Cycle Accounting

Abstract: Using 'business cycle accounting' (BCA), Chari, Kehoe and McGrattan (2006) (CKM) conclude that models of financial frictions which create a wedge in the intertemporal Euler equation are not promising avenues for modeling business cycle dynamics. There are two reasons that this conclusion is not warranted. First, small changes in the implementation of BCA overturn CKM's conclusions. Second, one way that shocks to the intertemporal wedge impact on the economy is by their spillover effects onto other wedges. This potentially important mechanism for the transmission of intertemporal wedge shocks is not identified under BCA. CKM potentially understate the importance of these shocks by adopting the extreme position that spillover effects are zero.

What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China

Abstract: Using the World Bank survey of 1500 firms in five Chinese cities, we study whether the presence of foreign firms produces technology spillovers on domestic firms operating in the same city and industry. We find positive spillovers for more backward firms. We analyze the channels of such spillovers and find that the transfer of technology occurs through movement of high-skilled workers from FDI firms to domestic firms as well as through network externalities among high-skilled workers. Moreover, these two channels fully account for the spillover effects we find, which demonstrate the importance of well-functioning labor market in facilitating FDI spillovers. Insofar as our results can be generalized to other countries, they reconcile conflicting evidence found in other studies.

Home versus Host Country Effects of FDI: Searching for New Evidence of Productivity Spillovers

Abstract: This paper investigates the effects of both inward and outward foreign direct investment (FDI) on productivity in manufacturing and services sectors. The main novelty is the analysis of the spillover effects of outward FDI that may occur outside the investing firms on the rest of the home country. Our results based on panel data from Estonia do not indicate much spillover effects of outward or inward FDI that are robust to different specifications of the estimated model. There is substantial heterogeneity in the findings on spillovers across different specifications of the model or sector studied.

Entry of Foreign Banks and their Impact on Host Countries

Abstract: Foreign bank entry is frequently associated with spillover effects for local banks and increasing competition in the local banking market. We study the impact of these effects on host countries. In particular, we ask how these effects interact and how they depend on the competitive environment of the host banking market. An increasing number of banks is more likely to have positive welfare effects the more competitive the market environment, whereas spillovers are less likely to have positive welfare effects the stronger competition. Hence, competitive effects seem to reinforce each other, while spillovers and competition tend to weaken each other.

Is Exporting a Source of Productivity Spillovers

Abstract: This paper investigates whether exporting generates positive productivity spillover effects on other plants operating in the same industry and whether exporting affects productivity of plants in vertically related industries. Using plant-level data from Chile we find that exporters improve productivity of their local suppliers but not of plants that purchase intermediate inputs from them. We also find evidence of horizontal spillovers from exporting. Exporting by foreign-owned plants generates positive spillovers in all directions: to their suppliers, customers, and to other plants in the same industry. Domestic exporters increase productivity of their suppliers and, to a lesser extent, that of plants in the same sector.

Path analysis of work conditions and work–family spillover as modifiable workplace factors associated with depressive symptomatology

Abstract: Background: Literature pertaining to the relationship between workplace factors and depression has been compartmentalized: work conditions, family conditions, and work–family balance have been studied separately as predictors of depressive symptoms but not concurrently. Objective: Work conditions and work–family spillover were considered concurrently as modifiable workplace factors associated with depressive symptomatology, while controlling for confounding socio-economic factors. Methods: This cross-sectional study involved 218 female health care workers who completed a survey assessing work conditions [Effort–Reward Imbalance (ERI) scale and Job Content Questionnaire (JCQ)], work–family balance (work–family spillover scale), sociodemographic information, and depressive symptoms [Center for Epidemiological Studies Depression (CES-D) scale]. Results: Path analysis supported the presence of a direct relationship between depressive symptoms and high effort–reward imbalance, high negative work–family spillover, low positive family-to-work spillover, and low education. The indirect effect of low support from work was mediated by negative work-to-family spillover and high effort–reward imbalance. The indirect effect of high effort–reward imbalance was mediated by increased negative work-to-family spillover. The indirect effect of having children 18 years or younger was mediated by decreased positive family-to-work spillover. An indirect effect of low education was mediated by high effort–reward imbalance and high negative work-to-family spillover. Conclusions: The association between work conditions and depressive symptomatology is mediated by increased negative work-to-family spillover. The impact of having young children is mediated by decreased positive family-to-work spillover. Copyright © 2006 John Wiley & Sons, Ltd.

Return and Volatility Spillovers Between Large and Small Stocks in the UK

Abstract: This paper investigates return and volatility spillover effects between the FTSE 100, FTSE 250 and FTSE Small Cap equity indices using the multivariate GARCH framework. We find that return and volatility transmission mechanisms between large and small stocks in the UK are asymmetric. In particular, there are significant spillover effects in both returns and volatility from the portfolios of larger stocks to the portfolios of smaller stocks. For volatility, there is also evidence of limited feedback from the portfolios of smaller stocks to the portfolios of larger stocks, although sub-period analysis suggests that this is to some extent period-specific. Simulation evidence shows that non-synchronous trading potentially explains some, but not all, of the spillover effects in returns, and that it explains none of the spillover effects in volatility. These results are consistent with a market in which information is first incorporated into the prices of large stocks before being impounded into the prices of small stocks.

Unemployment fluctuations with staggered Nash wage bargaining

Abstract: A number of authors have recently emphasized that the conventional model of unemployment dynamics due to Mortensen and Pissarides has difficulty accounting for the relatively volatile behavior of labor market activity over the business cycle We address this issue by modifying the MP framework to allow for staggered multiperiod wage contracting What emerges is a tractable relation for wage dynamics that is a natural generalization of the period-by-period Nash bargaining outcome in the conventional formulation An interesting side-product is the emergence of spillover effects of average wages on the bargaining process We then show that a reasonable calibration of the model can account well for the cyclical behavior of wages and labor market activity observed in the data The spillover effects turn out to be important in this respect

Geographic Spillover of Unionism

Abstract: Unionism in the United States is contagious; it spills out of coal mines and steel mills into other establishments in the neighborhood, like hospitals and supermarkets. The geographic spillover of unionism is documented here using a newly constructed establishment level data on unionism that is rich in geographic detail. A strong connection is found between unionism of health care establishments today and proximity to unionized coal mines and steel mills from the 1950s.

His, hers, or ours? Work-to-family spillover, crossover, and family cohesion

Abstract: Using the contagion model of spillover and crossover, this study examines gender differences in the effects of workplace characteristics (e.g., hours worked in the paid-labor force, job satisfactio...

Jump Spillover in International Equity Markets

Abstract: In this article we study jump spillover effects between a number of country equity indexes. In order to identify the latent historical jumps of each index, we use a Bayesian approach to estimate a jump-diffusion model on each index. We look at the simultaneous jump intensities of pairs of countries and the probabilities that jumps in large countries cause jumps or unusually large returns in other countries. In all cases, we find significant evidence of jump spillover. In addition, we find that jump spillover seems to be particularly large between countries that belong to the same regions and have similar industry structures, whereas, interestingly, the sample correlations between the countries have difficulties in capturing the jump spillover effects. (Less)

Two Flaws In Business Cycle Accounting

Abstract: Using ‘business cycle accounting’ (BCA), Chari, Kehoe and McGrattan (2006) (CKM) conclude that models of financial frictions which create a wedge in the intertemporal Euler equation are not promising avenues for modeling business cycle dynamics. There are two reasons that this conclusion is not warranted. First, small changes in the implementation of BCA overturn CKM’s conclusions. Second, one way that shocks to the intertemporal wedge impact on the economy is by their spillover effects onto other wedges. This potentially important mechanism for the transmission of intertemporal wedge shocks is not identified under BCA. CKM potentially understate the importance of these shocks by adopting the extreme position that spillover effects are zero.

Organizational Networking in UK Biotechnology Clusters

Abstract: Differences in growth patterns between regional clusters are often attributed to the extent to which they benefit from agglomeration, defined as the advantages that derive from being proximately located with other companies and institutions in the same industry. Foremost among these supply-side externalities are the knowledge ‘spillover’ effects that can result from firms interacting extensively in both horizontal (complementary equivalent firms) and vertical (value chain) directions. The paper presents evidence from two surveys, one national and one regionally based, of networking patterns in UK biotechnology, focusing on how firms engage with other small firms, with large pharmaceuticals, and with research centres, and how far these interactions are regional, national or international in character. It suggests that where companies do collaborate, there is a tendency for the intensity of activity to increase as the location of the partner moves from the local to the international space. We evaluate the obvious interpretation that local linkages may be satisfactory for idea generation and early product development, but that national and international connections are more important for manufacturing, marketing and distribution activities. However, we conclude that a broader set of largely industry factors account for the networking patterns – namely, the science-technology base, research funding, firms' business models, and competitor strategies in evolving markets – and that these matter more to clustered UK biotechnology firms than the cluster itself. These findings suggest a rethinking of cluster policy and the theoretical basis for clusters.

Nonprofit housing and neighborhood spillovers

Abstract: Nonprofit organizations play a critical role in U.S. housing policy, a role typically justified by the claim that their housing investments produce significant neighbor-hood spillover benefits. However, little work has actually been done to measure these impacts on neighborhoods. This paper compares the neighborhood spillover effects of city-supported rehabilitation of rental housing undertaken by nonprofit and for-profit developers, using data from New York City. To measure these benefits, we use increases in neighboring property values, estimated from a difference-in-difference specification of a hedonic regression model. We study the impacts of about 43,000 units of city-supported housing completed during the 1980s and 1990s, and our sample of property transactions includes nearly 300,000 individual sales. We find that both nonprofit and for-profit projects generate significant, positive spillover effects. This finding in itself is significant, given the widespread skepticism about the impact of subsidized housing on neighborhoods. We also find some differences across sectors. First, the impact of nonprofit housing remains stable over time, whereas the effect of for-profit housing declines slightly with time. Second, while large for-profit and nonprofit developments deliver similar benefits, in the case of small projects, for-profit developments generate greater impacts than their nonprofit counterparts. These differences are consistent with theoretical predictions. In particular, in the presence of information asymmetries with respect to housing quality, the non-distribution constraint should lead nonprofits to invest more than for-profits in developing and maintaining features that benefit the broader community. Meanwhile, the fact that scale makes a difference to nonprofit impacts may reflect the capacity constraints often faced by smaller nonprofits. ©2006 by the Association for Public Policy Analysis and Management

A strategic investment game with endogenous absorptive capacity

Abstract: R&D plays a dual role: First, it generates new knowledge and second, it develops a firm's absorptive capacity Most of the existing strategic investment game models neglect, however, the second role of R&D The aim of this paper is to incorporate the absorptive capacity hypothesis in such a model by endogenizing the spillover A two-stage game is established and subsequently solved, looking for the subgame perfect Nash equilibria Considering the comparative static properties of the model as well as the simulation results, a new effect appears: The "free-rider effect" of the models with exogenous spillover, which deteriorates the higher the spillover becomes, is now counteracted by the "absorptive capacity effect" It is found that firms will invest more in R&D to strengthen absorptive capacity when the spillover parameter is higher (author's abstract)