Showing papers on "Spillover effect published in 2007"

Related variety, unrelated variety and regional economic growth

Abstract: Frenken K., Van Oort F. and Verburg T. (2007) Related variety, unrelated variety and regional economic growth, Regional Studies 41, 685–697. In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. It is argued that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). A methodology based on entropy measures is introduced to compute related variety and unrelated variety. Using data at the NUTS 3 level in the Netherlands for 1996–2002, it was found that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth can be explained by traditional determinants including investments and research and development expenditures. Implications for regional policy follow. Frenken K., Van Oort F. et Verburg T. ...

Growth, Technological Interdependence and Spatial Externalities - Theory and Evidence

Abstract: SUMMARY This paper presents a theoretical growth model which explicitly takes into account technological interdependence among economies and examines the impact of spillover effects. Technological interdependence is assumed to operate through spatial externalities. The magnitude of the physical capital externalities at steady state, which is not usually identified in the literature, is estimated using a spatial econometric specification. Spatial externalities are found to be significant. This spatially augmented Solow model yields a conditional convergence equation which is characterized by parameter heterogeneity. A locally linear spatial autoregressive specification is then estimated providing a convergence speed estimate for each country of the sample. Copyright  2007 John Wiley & Sons, Ltd.

Entrepreneurship capital and economic growth

Abstract: This paper shows how and why the Solow growth accounting framework is useful for linking entrepreneurship capital to economic growth. The knowledge filter impedes the spillover of knowledge for commercialization, thereby weakening the impact of knowledge investments on economic growth. By serving as a conduit for knowledge spillovers, entrepreneurship is the missing link betwn investments in new knowledge and economic growth. Entrepreneurship is an important mechanism permeating the knowledge filter to facilitate the spillover of knowledge and ultimately generate economic growth. The emergence of entrepreneurship policy to promote economic growth is interpreted as an attempt to promote entrepreneurship capital, or the capacity of an economy to generate the start-up and growth of new firms.

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.

Linking FDI motivation and host economy productivity effects: conceptual and empirical analysis

Abstract: We develop a taxonomy that relates foreign direct investment (FDI) motivation (technology- and cost-based) to its anticipated effects on host countries domestic productivity. We then empirically examine the effects of FDI into the United Kingdom on domestic productivity, and find that different types of FDI have markedly different productivity spillover effects, which are consistent with the conceptual analysis. The UK gains substantially only from inward FDI motivated by a strong technology-based ownership advantage. As theory predicts, inward FDI motivated by technology-sourcing considerations leads to no productivity spillovers.

Spillover Effects of Foreclosures on Neighborhood Property Values

Abstract: Previous studies have shown that foreclosure often results in vandalism, disinvestment and other negative spillover effects in the neighborhood. This paper extends these views into a formal theoretical model through pricing based on comparables. We project that the spillover effect of a foreclosure on neighborhood property values depends on two factors: the discount of foreclosure sale and the weight placed on the foreclosed property as a comparable in the valuation. The former is related to housing cycle and the latter varies by time of foreclosure and its distance from the subject property. Empirical results based on a 2006 sample show that this effect is significant within a radius of 0.9 km (roughly 10 blocks) and within 5 years from its liquidation. The most severe impact is an 8.7% discount on neighborhood property values, which gradually drops to anywhere between −1.2 to −1.7% for foreclosures liquidated within the past 5 years. These spillover effects vary slightly when the sample selection bias is taken into account. Based on an alternative sample of purchase transactions in 2003, the estimated spillover effects in booming years are reduced by half, confirming on the important role played by housing cycles.

Is the relationship between inward FDI and spillover effects linear? An empirical examination of the case of China

Abstract: This paper finds evidence for the coexistence within Chinese manufacturing industry of both curvilinear and linear relationships between inward foreign direct investment (FDI) and the productivity of locally owned enterprises (LOEs). This complexity of spillover effects challenges the laissez-faire view that all inward FDI into all types of domestic industry is equally valuable in terms of productivity spillover benefits. Our findings suggest that inward FDI into China leads either to spillovers that decline beyond a critical point, or to effects that continue linearly, depending on the ownership of foreign investors and the technological characteristics of the industry concerned. Our analysis yields original insights into the complex pattern of spillover effects from FDI into China, and deeper understanding of its possible causes.

Unravelling financial market linkages during crises

Abstract: An empirical model of multiple asset classes across countries is formulated in a latent factor framework. A special feature of the model is that financial market linkages during periods of financial crises, including spillover and contagion effects, are formally specified. The model also captures a range of common factors including global shocks, country and market shocks, and idiosyncratic shocks. The framework is applied to modelling linkages between currency and equity markets during the East Asian financial crisis of 1997-98. The results provide strong evidence that cross-market links are important. Spillovers have a relatively larger effect on volatility than contagion, but both are statistically significant.

Does sovereign debt ratings news spill over 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.

Does Distance Matter in Spillover

Abstract: This paper examines the technology transfer through FDI in Hungary, using a large panel dataset of 24000 firm-level observations. We distinguish horizontal (intra-industry) and vertical (interindustry) spillovers. Besides the sign and magnitude of these effects we are interested in the spatial structure of these technology transfers. For this we use distance data, correct for sample selection and for the endogeneity of input demand use Arellano-Bond dynamic panel data technique. Our main findings are that there are significant horizontal and backward spillovers for domestic-owned firms suggesting the presence of foreign competitors and customers is beneficial for domestic firms. The effect of regional and county boundaries is insignificant. Using the distance data we find clear spatial structure of spillovers: for domestic firms the foreign presence only matters in very small distance (25 km), for foreign-owned firms the stronger the spillover the larger the distance (50 and 100 km).

Examining the “Neglected Side of the Work-Family Interface” Antecedents of Positive and Negative Family-to-Work Spillover

Abstract: This study extends previous research by Dilworth by examining antecedents of both positive and negative family-to-work spillover—a long-neglected area of research. It also uses an extended definition of domestic labor that includes emotion work and status enhancement. Using data from a random sample of dual-earner couples, the study found gender differences and similarities in the antecedents of family-to-work spillover. For both men and women, family cohesion and emotion-work satisfaction enhanced positive family-to-work spillover. For men, relationship satisfaction was associated with positive family-to-work spillover, whereas satisfaction with the housework arrangement was related to women’s positive spillover. The factors associated with negative family-to-work spillover are different for men and women. For men, satisfaction with the status enhancement they perform in support of their partner’s career was related to decreased negative family-to-work spillover. For women, the presence of preschool-aged...

Foreign direct investment - growth nexus: a review of the recent literature

Abstract: This paper reviews the literature dealing with the effects of FDI on Growth Numerous empirical studies have been conducted to investigate whether growth is influenced by FDI The overall evidence is best characterized as mixed as the results are regarding to the importance of labor costs, openness, investment climate, countries considered (developed vs developing) and fiscal incentives However, free trade zones, trade regime, the human capital base in the host country, financial market regulations, banking system, infrastructure quality, tax incentives, market size, regional integration arrangements and economic/political stability are very important determinant for FDI that creates a positive impact on overall economic growth In summary, consensus has been reached among academia and practitioners that FDI tends to have significant effect on economic growth through multiple channels such as capital formation, technology transfer and spillover, human capital (knowledge and skill) enhancement, and so on

The Business Improvement District Model: A Balanced Review of Contemporary Debates

Abstract: This article presents an o verview of the burgeoning literature on business improvement districts (BID) by highlighting its historical underpinnings, identifying the economic and political factors that explain its transnational proliferation, and demonstrating how the model varies within and across nations. It also provides a balanced review of the key debates associated with this relatively new urban revitalization strategy by asking the following questions: Are BIDs democratic? Are BIDs accountable? Do BIDs create wealth-based inequalities in the delivery of public services? Do BIDs create spillover effects? Do BIDs over-regulate public space?

FDI and technology spillovers in China

Abstract: Using a database of Chinese firms, we examine the effects of technology spillovers not only between foreign entrants and local firms but also between "modernized" local firms to other local firms. Our results show that the increased presence of foreign multinationals within industries and in their upstream sectors positively affected the productivity of local firms. The positive intra-industry spillover effect from wholly owned subsidiaries becomes evident when the Chinese government's restriction on foreign ownership was lifted. We also find strong spillover effects among local firms.

Spillovers And Vulnerability: The Case Of Community Uninsurance

Abstract: This paper studies the uninsured as a vulnerable population. We contend that reducing the size of the uninsured population yields important spillover benefits to the insured population, benefits that go beyond a lower charity care burden. Evidence presented in this paper reinforces studies in the literature that show that problems of health services quality and access facing insured people increase when the proportion of uninsured people in their local communities is greater. The size of such spillover benefits is reduced if the local market is large enough to be segmented based on insurance status.

The Growth of House Prices in Australian Capital Cities: What Do Economic Fundamentals Explain?

Abstract: The paper examines the role of economic activity, population growth, mortgage rates and inflation as key drivers of the real growth rates of house prices in Australian capital cities over the past 15 years. The empirical evidence suggests that these economic variables do explain a sizeable percentage of house price growth rates. In particular the level of mortgage interest rates is found to be an important influence in all eight cities. The effects of the other economic variables are less consistent across the capital cities; however one interesting finding is evidence of a positive spillover effect from the Sydney housing market onto house prices in a number of other capital cities (Abelson, 1994 and Bewley, Dvornak and Livera, 2004).

The Common Monetary Area in Southern Africa: Shocks, Adjustment, and Policy Challenges

Abstract: This study assesses the experience of the Common Monetary Area (CMA) based on available empirical evidence over the last two decades. It pays particular attention to member countries' adjustment to economic shocks in recent years and the inter-country linkages, including the spillover effects of policies. The paper draws the main lessons from the CMA experience, identifies key policy challenges, and discusses the issues facing the member countries in their efforts to achieve sustained growth. Implications for further economic integration in a broader regional context are also noted.

Foreign Direct Investment – Growht Nexus: A Review of The Recent Literature

Abstract: This paper reviews the literature dealing with the effects of FDI on Growth. Numerous empirical studies have been conducted to investigate whether growth is influenced by FDI. The overall evidence is best characterized as mixed as the results are regarding to the importance of labor costs, openness, investment climate, countries considered (developed vs developing) and fiscal incentives. However, free trade zones, trade regime, the human capital base in the host country, financial market regulations, banking system, infrastructure quality, tax incentives, market size, regional integration arrangements and economic/political stability are very important determinant for FDI that creates a positive impact on overall economic growth. In summary, consensus has been reached among academia and practitioners that FDI tends to have significant effect on economic growth through multiple channels such as capital formation, technology transfer and spillover, human capital (knowledge and skill) enhancement, and so on.

Migration, Spillovers, and Trade Diversion: The Impact of Internationalization on Domestic Stock Market Activity

Abstract: What is the impact of firms that cross-list, issue depositary receipts, or raise capital in international stock markets on the trading activity and liquidity of remaining firms in domestic markets? Using a panel of 3,000 firms from 55 countries during 1989-2000, we find that internationalization reduces the trading activity and liquidity of domestic firms through two channels. First, the trading of international firms migrates from domestic to international markets and this migration along with the reduction in domestic trading of international firms has negative spillover effects on domestic firm trading activity and liquidity. Second, there is trade diversion within domestic markets as trading activity shifts out of domestic firms and into international firms.

Fiscal Adjustments: Determinants and Macroeconomic Consequences

Abstract: Manmohan S. Kumar, Daniel Leigh and Alexander Plekhanov analyze the determinants of fiscal consolidation success in OECD economies as well as the short-run and long-run effects of fiscal adjustments on economic activity. They examine fourteen case studies, panel data for OECD economies, and the results of simulations using a non-Ricardian multi-country dynamic general equilibrium model. They find that while fiscal consolidations tend to have short-run contractionary effects, they can be expansionary in the long run, provided that they do not rely excessively on cuts in productive government expenditure. They can also create positive spillover effects for the rest of the world.