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 ?
Finally, this is the first document in the literature that delves into the presence of spillovers, jointly considering trade regimes and the technological intensity of the products elaborated by foreign companies vis-a-vis their domestic counterparts; both elements have been observed to influence the existence of spillovers.
Estimates show that there is a wide variety in the level of spillovers in Mexican exporting firms, and that their existence depends on the similarity between foreign firms and their Mexican counterparts with regard to a variety of factors such as export product/destination, export regime and level of technological intensity.
However, they also have lower levels of income so the region may find it hard to exploit the potential technological and employment spillovers from FDI.
The section 'FDI spillovers in the Western Balkans' provides original empirical findings about spillovers in the region and the section 'Explaining the results' helps to interpret the findings by examining a number of indicators of the Western Balkan countries that explain why FDI spillovers may have been limited.
Anselin and colleagues (1997) find that university R&D spillovers positively affect patent and innovation creation in the regions within the university's proximity extending over 50 miles.
Thus, in our exploration of knowledge spillovers in Indiana, we use university R&D expenditures as the foundation for our metric of knowledge spillovers and use a decay function to reflect the diminishing influence of those expenditures--and, thus, the university--as the distance from the university increases.
Working Paper | Exporting and Foreign Direct Investment Spillovers (/publication/exporting-and-foreign-direct-investment-spillovers)
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.
We worry, in short, that state-generated spillovers cause interstate friction, generate inefficiencies, undermine the national marketplace, violate the autonomy of other states, and threaten democracy by preventing citizens of the affected state from choosing their own destinies.
272) posit, "the presence of knowledge spillovers poses a conundrum at the micro level.
As for OFDI reverse technology spillover effect,OFDI was a potential knowledge distribution channel and home country was subjected to knowledge spillover effect related with OFDI(Bitzer, J.