Showing papers on "Spillover effect published in 2009"
TL;DR: In this paper, a tractable relation for wage dynamics that is a natural generalization of the period-by-period Nash bargaining outcome in the conventional formulation is presented, and a reasonable calibration of the model can account well for the cyclical behavior of wages and labor market activity observed in the data.
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.
500 citations
TL;DR: In this article, the role of work-family integration in the spillover of daily job satisfaction onto daily marital satisfaction and affective states experienced by employees at home was examined at the within-individual level.
Abstract: The longitudinal, multisource, multimethod study presented herein examines the role of employees’ work-family integration in the spillover of daily job satisfaction onto daily marital satisfaction and affective states experienced by employees at home. The spillover linkages are modeled at the within-individual level, and results support the main effects of daily job satisfaction on daily marital satisfaction and affect at home, as well as the moderating effect of work-family integration on the strength of the within-individual spillover effects on home affect. That is, employees with highly integrated work and family roles exhibited stronger intraindividual spillover effects on positive and negative affect at home. Modern technologies such as the Internet, cellular phone, Blackberry, iPhone, and other mobile communication devices have enabled employees and their family members to communicate with each other nearly anywhere, anytime. Moreover, flexible work arrangements under which employees can complete some work tasks from home are
377 citations
TL;DR: In this article, the authors assess the effects of increasing competition in the service sector in Italy which, based on cross-country comparisons, is the OECD country with the highest markups in non-manufacturing industries.
Abstract: he paper assesses the effects of increasing competition in the service sector in Italy which, based on cross-country comparisons, is the OECD country with the highest markups in non-manufacturing industries. We propose a two-region (Italy and the rest of the euro area) dynamic general equilibrium model allowing for monopolistic competition in the labor, manufacturing and service markets. We then use the model to simulate the macroeconomic and spillover effects of increasing the degree of competition in the Italian services sector. Our results indicate that reducing the service sector markups to the levels of the rest of the euro area increases in the long run Italian GDP by 11 percent and welfare (measured in terms of steady state consumption equivalents) by about 3.5 percent. Half of the GDP increase would be realized in the first three years. The spillover effects to the rest of the euro area are limited.
287 citations
TL;DR: In this article, a new concept of Granger causality in risk is introduced and a class of kernel-based tests are proposed to detect extreme downside risk spillover between financial markets, where risk is measured by the left tail of the distribution or equivalently by the Value at Risk (VaR).
274 citations
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TL;DR: In this paper, the impact of sovereign credit rating change announcements on the CDS spreads of the event countries and their spillover effects on other emerging economies' CDS premiums is examined.
Abstract: This paper examines the impact of sovereign credit rating change announcements on the CDS spreads of the event countries, and their spillover effects on other emerging economies' CDS premiums. In contrast to previous work, we find that positive events have a more consistent impact on sovereign CDS markets in the short period surrounding the event, and are more likely to spill over to other emerging markets, whereas negative events have a higher probability of being predicted by the CDS premium. The transmission mechanisms for positive events are the common creditor and competition in trade markets.
264 citations
TL;DR: This paper showed that the most severe impact 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.
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.
251 citations
TL;DR: It is proposed that firms are more likely to make unilateral relationship-specific investments when the investment yields economic spillover values for other transactions with the same exchange partners as well as for third-party transactions.
Abstract: This study examines why and under what conditions firms will make unilateral relationship-specific investments to their transaction partners. We propose that firms are more likely to make such investments when the investment yields positive economic spillover values for other transactions with the same exchange partners as well as for third-party transactions. We also model two types of positive inter-project spillover effects that a transaction may generate: knowledge spillovers and reputation spillovers. We find empirical support for our developed theory in the context of Taiwanese suppliers of original equipment manufacturers. Copyright © 2008 John Wiley & Sons, Ltd.
247 citations
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TL;DR: The authors assesses the effects of public capital in Italy on the main macroeconomic aggregates: GDP, private capital and labour, and find a persistent increase in GDP in response to a positive shock to public capital; this result is mainly attributable to a strong stimulus exerted by public infrastructures on private capital.
Abstract: This paper assesses the effects of public capital in Italy on the main macroeconomic aggregates: GDP, private capital and labour. A cointegrated vector autoregressive (VAR) model, in line with recent advancements in the field, allows us to take into account the complex nexus of direct and indirect links between the variables. We find a persistent increase in GDP in response to a positive shock to public capital; this result is mainly attributable to a strong stimulus exerted by public infrastructures on private capital (crowding in). The positive effects of public capital are quite pervasive across Italy, albeit to differing extents. In particular, a higher elasticity of GDP to public capital is estimated for the South, whereas marginal productivity turns out to be higher in the Centre-North. This suggests that public capital has a lower economic return in the South, bearing out the existence of a potential conflict between equity and efficiency goals. Finally, we indirectly document the existence of positive spillover effects at the regional level, allowing individual regions to benefit from the endowment of public capital in the rest of the country.
204 citations
01 Feb 2009
TL;DR: In this article, the authors adopted a person-environment fit approach to examine whether greater congruence between employees' preferences for segmenting their work domain from their family domain and what their employers' work environment allowed would be associated with lower work-to-family conflict and higher worktofamily positive spillover.
Abstract: This study adopted a person-environment fit approach to examine whether greater congruence between employees’ preferences for segmenting their work domain from their family domain (i.e., keeping work matters at work) and what their employers’ work environment allowed would be associated with lower work-to-family conflict and higher work-to-family positive spillover. Different facets of work-to-family conflict (time-based and strain-based) and positive spillover (affective and instrumental) were examined. According to latent congruence modeling of survey data from 528 management employees, congruence was negatively related to both time-based and strain-based work-to-family conflict and positively related to work-to-family instrumental positive spillover as expected. However, contrary to expectations, congruence was negatively related to work-to-family affective positive spillover. Implications for how boundary management processes may affect both positive and negative experiences of the work–family interface are discussed.
201 citations
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TL;DR: In this paper, the authors examined the extent of contagion and interdependence across the East Asian equity markets since early 1990s and compared the ongoing crisis with earlier episodes using the forecast error variance decomposition from a vector autoregression.
Abstract: This article examines the extent of contagion and interdependence across the East Asian equity markets since early 1990s and compares the ongoing crisis with earlier episodes. Using the forecast error variance decomposition from a vector autoregression, we derive return and volatility spillover indices over the rolling sub-sample windows. We show that there is substantial difference between the behavior of the East Asian return and volatility spillover indices over time. While the return spillover index reveals increased integration among the East Asian equity markets, the volatility spillover index experiences significant bursts during major market crises, including the East Asian crisis. The fact that both return and volatility spillover indices reached their respective peaks during the current global financial crisis attests to the severity of the current episode.
200 citations
TL;DR: In this paper, the authors examined whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms and found that Hong Kong, Macao and Taiwan (HMT) invested firms generate negative horizontal spillovers, while non-HMT foreign invested firms (mostly from OECD countries) tend to bring positive horizontal spillover in China.
Abstract: Using a large panel dataset covering all manufacturing firms (above a minimum scale) in China from 1998 to 2005, this paper examines whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms. In estimating productivity, we control for a possible simultaneity bias by using semi-parametric estimation techniques. We find that Hong Kong, Macao and Taiwan (HMT) invested firms generate negative horizontal spillovers, while Non-HMT foreign invested firms (mostly from OECD countries) tend to bring positive horizontal spillovers in China. These two opposing horizontal effects seem to cancel out at the aggregate level. We also find strong and robust vertical spillover effects on both state-owned firms and non-state firms. However, vertical spillover effects from export-oriented FDI are weaker than those from domestic-market-oriented FDI.
TL;DR: In this article, the authors examined whether there exist productivity spillovers from foreign direct investment (FDI) to domestic firms and found that Hong Kong, Macao and Taiwan (HMT) invested firms generate negative horizontal spillovers, while non-HMT foreign invested firms (mostly from OECD countries) tend to bring positive horizontal spillover in China.
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TL;DR: In this paper, the authors investigate how originating firms may also benefit from their own spillovers, when an originating firm's spillovers are recombined with complementary knowledge by recipient firms, a pool of external knowledge is formed that is inherently related to the originating firms' knowledge base.
Abstract: Although research suggests knowledge spillovers benefit imitators often at the expense of originators, we investigate how originating firms may also benefit from their own spillovers. When an originating firm’s spillovers are recombined with complementary knowledge by recipient firms, a pool of external knowledge is formed that is inherently related to the originating firm’s knowledge base. This spillover knowledge pool contains valuable opportunities for the originator to learn vicariously from recipients’ recombinatorial activities. In a longitudinal study of 87 telecommunications equipment manufacturers, we find that a firm’s rate of innovation and the extent to which these innovations build on and integrate knowledge from the spillover knowledge pool is greater when its spillover knowledge pool is larger in size and similar to the firm’s existing knowledge base.
TL;DR: In this article, the spillover effects from FDI were analyzed using a stochastic frontier approach and productivity growth was decomposed using a generalized Malmquist output-oriented index.
TL;DR: It is shown that thermodynamic spillover can occur, both from the free-standing and from the receptor-supported clusters, and the computed energy barrier of the motion of a H from the catalyst to the hydrogenated graphene is small and can be overcome at operational temperatures.
Abstract: The spillover phenomenon, which essentially involves transfer of H from a metal catalyst to a graphitic receptor, has been considered promising for efficient hydrogen storage. An open question about the spillover mechanism is how a H atom binds to graphene instead of forming the thermodynamically preferred H2. Usingabinitiocalculations,weshowthatthecatalystsaturationprovidesawaytotheadsorptionofhydrogenon the receptor by increasing the H chemical potential to a spillover favorable range. Although it is energetically unfavorable for the spillover to occur on a pristine graphene surface, presence of a phase of hydrogenated graphene facilitates the spillover by significantly improving the CH binding. We show that thermodynamic spillover can occur, both from the free-standing and from the receptor-supported clusters. Further, the computed energy barrier of the motion of a H from the catalyst to the hydrogenated graphene is small (0.7 eV) and can be overcome at operational temperatures.
TL;DR: Overall, this work implies that, by carrying cause-related products, companies can not only improve their image in the public eye but also increase profits.
Abstract: The number of firms carrying a cause-related product has significantly increased in recent years. We consider a duopoly model of competition between firms in two products to determine which products a firm will link to a cause. We first test the behavioral underpinnings of our model in two laboratory experiments to demonstrate the existence of both a direct utility benefit to consumers from cause marketing (CM) and a spillover benefit onto other products in the portfolio. Linking one product in a product portfolio to a cause can therefore increase sales both of that product and, via a spillover effect, of other products in the firm's portfolio. We construct a CM game in which each firm chooses which products, if any, to place on CM. In the absence of a spillover benefit, a firm places a product on CM if and only if it can increase its price by enough to compensate for the cost of CM. Thus, in equilibrium, firms either have both products or neither product on CM. However, with the introduction of a spillover benefit to the second product, this result changes. We show that if a single firm in the market links only one product to a cause, it can raise prices on both products and earn a higher profit. We assume each firm has an advantage in one product and show that there is an equilibrium in which each firm links only its disadvantaged product to a cause. If the spillover effect is strong, there is a second equilibrium in which each firm links only its advantaged product to a cause. In each case, firms raise their prices on both products and earn higher profits than when neither firm engages in CM. We also show that a firm will never place its entire portfolio on CM. Overall, our work implies that, by carrying cause-related products, companies can not only improve their image in the public eye but also increase profits.
TL;DR: In this article, the linkages among the different stock markets in the Greater China region (China, Hong Kong, and Taiwan) were explored and the empirical findings showed no indications of long-run relationships among the markets.
TL;DR: In this article, the authors empirically tested whether developing countries' linkages with more CO2 and SO2-efficient economies contribute to domestic improvements in CO 2 and SO 2-efficiency.
Abstract: Arguments about the "positive" influence of growing transnational linkages have typically focused on their role in diffusing environmentally-superior innovations which help to raise countries' environment-efficiency. The present article empirically tests these claims by examining whether developing countries' linkages with more CO2 and SO2-efficient economies contribute to domestic improvements in CO2 and SO2-efficiency. Our large-N, statistical findings caution against some of the efficiency-oriented optimism voiced by supporters of globalization. Although imports ties with more pollution-efficient countries are found to spillover into improved domestic CO2 and SO2-efficiency, neither transnational linkages via exports, inward foreign direct investment (FDI) nor telephone calls appear to have any influence on domestic pollution-efficiency.
TL;DR: In this paper, the authors used a panel-based GMM methodology to estimate a dynamic model of life satisfaction and found that there is a positive and statistically significant spillover effect that runs from one partner to the other partner in a couple.
TL;DR: In this paper, the impact of the introduction of the euro on the interactions across the New York, London, Frankfurt and Paris stock markets is investigated using the framework of dynamic conditional correlations.
Abstract: This article investigates the impact of the introduction of the euro on the interactions across the New York, London, Frankfurt and Paris stock markets. After controlling for possible returns and volatility spillovers, we focus on the correlations of shocks using the framework of Dynamic Conditional Correlations (DCC). Daily pseudo-closing prices (recorded at 16:00 London time) are used to avoid conflating correlation and spillover effects. Statistical break tests confirm that the introduction of the euro significantly affects the cross-market correlations. Although dynamic correlations of shocks between all market pairs increase, the correlation in the post-euro period is highest between Frankfurt and Paris, indicating increased integration of these markets. Other findings include the presence of spillover effects from foreign markets for both returns and volatilities, with asymmetries in volatilities and conditional correlations such that negative shocks have larger effects than positive ones.
TL;DR: This work considers a decentralized assembly system in which a buyer purchases components from several first-tier suppliers and finds that the level of inefficiency under decentralized control decreases with increased competition and spillover rate.
Abstract: We consider a decentralized assembly system in which a buyer purchases components from several first-tier suppliers. We examine the dynamics of suppliers' investments in cost-reduction initiatives over the life cycle of a product under different procurement approaches. We model the suppliers' investment decisions under cost-contingent contracts, with wholesale prices determined on the basis of the prevailing component costs, as a dynamic game in closed-loop strategies. We show that there always exists an equilibrium in which the suppliers' investments are synchronized, that is, in each period either all suppliers invest in process improvement or no supplier does. We also consider target-price contracts, under which the assembler announces the rate of component cost reduction to be achieved over the product's life cycle at the beginning of the contractual relationship. We show that target-price contracts lead to higher investment levels and profits if the rates are properly specified. In general, the equilibrium investments of the suppliers are lower than those under centralized control. The buyer can eliminate this inefficiency by subsidizing a certain fraction of the costs of investments. We extend the model to a setting with two competing assemblers and knowledge spillover at the suppliers. We find that the level of inefficiency under decentralized control decreases with increased competition and spillover rate.
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TL;DR: In this article, the authors investigate the extent to which R&D spillover effects are intensified by both geographic and technological proximities between spillover generating and receiving firms, and also control for the firm's ability to identify, assimilate and absorb the external knowledge stock.
Abstract: This paper aims at assessing the magnitude of R&D spillover effects on large international R&D companies’ productivity growth. In particular, we investigate the extent to which R&D spillover effects are intensified by both geographic and technological proximities between spillover generating and receiving firms. We also control for the firm’s ability to identify, assimilate and absorb the external knowledge stock. The results estimated by means of panel data econometric methods (system GMM) indicate a positive and significant impact of both types of R&D spillovers and of absorptive capacity on productivity performance.
TL;DR: The authors empirically tested whether developing countries' linkages with more CO2-and SO2-efficient economies contribute to domestic improvements in CO2 and SO2 efficiency. But neither transnational linkages via exports, inward foreign direct investment (FDI), nor telephone calls appear to have any influence on domestic pollution-efficiency.
Abstract: Arguments about the “positive” influence of growing transnational linkages have typically focused on their role in diffusing environmentally superior innovations which help to raise countries’ environment-efficiency. The present article empirically tests these claims by examining whether developing countries’ linkages with more CO2- and SO2-efficient economies contribute to domestic improvements in CO2- and SO2-efficiency. Our large-N, statistical findings caution against some of the efficiency-oriented optimism voiced by supporters of globalization. Although imports ties with more pollution-efficient countries are found to spillover into improved domestic CO2- and SO2-efficiency, neither transnational linkages via exports, inward foreign direct investment (FDI) nor telephone calls appear to have any influence on domestic pollution-efficiency.
TL;DR: Doping with 2 wt % TiCl( 3) or VCl(3) can significantly increase the rates of both adsorption and desorption by spillover and the small hysteresis loop in the hydrogen isotherms for the spillover system is eliminated upon doping with the metal salt.
Abstract: A crucial bottleneck in developing a hydrogen economy is hydrogen storage. This is particularly true for transportation using hydrogen as the fuel for fuel cells. The U.S. Department of Energy has established specific R&D targets for on-board hydrogen storage. Among the most important targets are system gravimetric/volumetric capacities and charge/discharge rates. New sorbent materials based on hydrogen spillover have shown much promise recently. However, the rates of spillover are low and remain a major concern. Here it is shown that doping with 2 wt % TiCl3 or VCl3 can significantly increase the rates of both adsorption and desorption by spillover. Moreover, the small hysteresis loop in the hydrogen isotherms for the spillover system is eliminated upon doping with the metal salt. Both heats of adsorption and activation energies for spillover are decreased by doping with TiCl3 or VCl3. This result indicates that the binding energies between the spilled-over hydrogen and the sites on the carbon surface ar...
TL;DR: This work characterize and test the functional form of spillover pools for efficiency-enhancing innovation across 50 markets in the banking industry, and results are consistent with expectations for asymmetric spillovers but inconsistent with Expectations for pooled spillovers.
Abstract: Although spillovers are a crucial factor in determining the optimal environment for innovation, there is no consensus regarding their impact on firm behavior. One reason for this may be that models differ in their assumptions for the functional form of the spillover pool. In industrial organization and economic geography, for example, the predominant convention is that all innovation within an industry/region contributes to a spillover pool that has a common value for all firms. An alternative convention prevalent in endogenous growth and evolutionary economics is that spillovers have directionality---the size of the relevant pool differs across firms.
Knowing the correct functional form may facilitate theoretical consensus, either analytically (by modifying models' assumptions) or empirically (by supporting a critical test of competing theories). We characterize and test the functional form of spillover pools for efficiency-enhancing innovation across 50 markets in the banking industry. Our results in that setting are consistent with expectations for asymmetric spillovers but inconsistent with expectations for pooled spillovers.
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TL;DR: In this paper, the authors examined the spillover effect of others' religious beliefs on life satisfaction and found that people are more satisfied in more religious regions than those who are not religious.
Abstract: We use recent pooled survey data on 90 000 individuals in 26 European countries to examine religious spillover effects on life satisfaction Own religious behaviour is positively correlated with individual life satisfaction More unusually, average religiosity in the region also has a positive impact: people are more satisfied in more religious regions This spillover holds both for those who are religious and for those who are not The flipside of the coin is that a greater proportion of "atheists" (those who say they do not currently belong to any religious denomination) has negative spillover effects, for the religious and atheists alike We last show that both Protestants and Catholics like to live in regions where their own religion is dominant, while Protestants are also more satisfied when Catholics dominate The generic positive spillover effect of others' religion is not explained by social capital, crime, or trust
TL;DR: In this article, the authors developed a simple test to assess whether horizontal spillover effects from multinational to domestic firms are endogenous to the market structure generated by the incremental entry of the same multinationals.
Abstract: We develop a simple test to assess whether horizontal spillover effects from multinational to domestic firms are endogenous to the market structure generated by the incremental entry of the same multinationals. In particular, we analyze the performance of a panel of 10,650 firms operating in Romania in the period 1995–2001. Controlling for the simultaneity bias in productivity estimates through semi-parametric techniques, we find that changes in domestic firms' total factor productivity are positively related to the first foreign investment in a specific industry and region, but get significantly weaker and become negative as the number of multinationals that enter in the considered industry/region crosses a specific threshold. These changing marginal effects can explain the lack of horizontal spillovers arising in traditional model designs. We also find these effects to vary between manufacturing and services, suggesting as a possible explanation a strategic change in technology transfer decisions by multinational firms as the market structure evolves.
TL;DR: In this article, the authors investigate the extent to which R&D spillover effects are intensified by both geographic and technological proximities between spillover generating and receiving firms, and also control for the firm's ability to identify, assimilate and absorb the external knowledge stock.
Abstract: This paper aims at assessing the magnitude of R&D spillover effects on large international R&D companies’ productivity growth. In particular, we investigate the extent to which R&D spillover effects are intensified by both geographic and technological proximities between spillover generating and receiving firms. We also control for the firm’s ability to identify, assimilate and absorb the external knowledge stock. The results estimated by means of panel data econometric methods (system GMM) indicate a positive and significant impact of both types of R&D spillovers and of absorptive capacity on productivity performance.
TL;DR: In this paper, a structural Bayesian learning model was developed to estimate prior and dynamic perception spillovers across competing brands only when brands are sufficiently similar, and no evidence of spillover effects across brands that are highly dissimilar.
Abstract: Drawing on the accessibility–diagnosticity framework and previous literature on branding and order of entry, the authors hypothesize that perception spillovers can also occur across directly competing products that do not share a common brand name. The authors suggest two mechanisms (prior perception spillover and dynamic perception spillover) and one moderating variable (product/brand similarity). To test for spillovers across competing brands, the authors develop a structural Bayesian learning model and estimate it using prescription choice and marketing communication data from a panel of physicians. From their model results, the authors find evidence of prior and dynamic perception spillovers across competing brands only when brands are sufficiently similar. In contrast, they find no evidence of spillover effects across brands that are highly dissimilar. Finally, several policy experiments illustrate the strength and significance of competitive spillovers for product diffusion, and from the re...
TL;DR: In this paper, the authors used transmission-constrained electricity market models to investigate the effect of emissions trading on leakage and emissions spillover in the regional greenhouse gas initiative (RGGI).