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 ?
Foreign direct investment (FDI) generates spillovers that often benefit local firms in the host country.
Yu, 2013, "Property Rights, R&D Spillovers and Corporate Accounting Transparency in China," Emerging Markets Review 15, 34-56.
Louis are world-class schools that have attracted little high-tech spillover.
In other words, the main objective of this research was to investigate if there were productivity spillovers effects from FDI received by Brazilian processing industries.
At the current juncture, we believe that the Fund should stand ready to provide analytical support and policy advice to its members on how to address policy spillovers.
The following six international knowledge transmission channels are examined: (1) imports (Coe and Helpman 1995; Coe, Helpman, and Hoffmaister 1997, 2009; Keller 1998; Kneller and Stevens 2006; Lichtenberg and van Pottelsberghe de la Potterie 1998; Madsen 2007, 2008a, 2008b; Vamvakidis 1998, 2003); (2) exports (Falvey, Foster, and Greenaway 2004); (3) inward FDI (van Pottelsberghe de la Potterie and Lichtenberg 2001); (4) flows of patents between countries (Eaton and Kortum 1996, 1999); (5) geographical proximity (Keller 2002); and (6) general knowledge spillovers that are not passing through any particular channel.
Domestic political volatility, security breaches, concerns about spillovers from the escalating Syrian crisis, and the dispute over the minimum wage .
But many emerging countries were forced to confront adverse financial spillovers from large and sharp swings in the global liquidity condition," Governor Kim said at the opening remarks for the BOK conference co-organized with the International Monetary Fund (IMF).
manufacturing firms, the estimated FDI spillovers account for about 14 percent of U.
Goyal and Moraga-Gonzalez (2001) find that such a conflict arises when spillovers are not too small.
Productivity spillovers also have a positive effect on wages.