Externality

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Externality

The cost or benefits of a transaction to parties who do not directly participate in it. Externality can be either positive or negative. For example, a merger can lead to higher share prices and bonuses for employees, benefiting shareholders and employees at the two companies merging, This can create wealth and positively impact a community. On the other hand, the merger can drive a competitor out of business, which results in layoffs and reduced wealth, which can hurt a community. Externality is also called spillover or the neighborhood effect. See also: External benefit, External cost.
References in periodicals archive ?
Our framework--which is tested against a recently constructed large panel dataset comprising 357,958 firms--challenges current thinking about FDI spillovers and demonstrates how the presence of foreign firms interacts with location-bound institutions to jointly shape the spillover effects of FDI.
First, China is a country where firms have both concentrated ownership and significant state ownership, providing us the opportunity to examine how political connections affect the spillover effect of corporate scandals.
Knowledge spillovers come from interaction with the well educated.
This study aims to answer the following research question: Are there productivity spillover effects from FDI received by the Brazilian processing industries?
Main Street estimates that this supplemental cash dividend represents a payout of roughly one-fifth of Main Street's estimated spillover income as of September 30, 2013.
The meeting will focus on spillovers from accommodative monetary policies in major economies and cooperation in policy efforts to address the spillovers, the ministry said.
The Premier and Mr Lindsay also discussed regional and international developments, warning that a spillover from any destabilised country would have wide-ranging and devastating consequences.
And we cannot ignore the risks of a regional spillover, with possible implications for allied security," Rasmussen said on his arrival for NATO foreign ministers' meeting.
nw] are substantially higher than the coefficient estimates of the other spillover variables, which is consistent with the estimates in Table 2.
But he is terrific when on a quest to uncover the circumstances that led to a particular spillover event.
Dr Mashal explained he was not opposed to public holidays as they are people's rights and stipulated in the Labour Law, but the spillover days should be stopped.
Jerusalem (AFP) -- Israeli artillery fired intoSyriaearly Sunday after gunfire fromSyriahit an army vehicle but caused no injuries, the Israeli military said, in the latest spillover of violence from the bloody civil war raging across the ceasefire line.