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.
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References in periodicals archive ?
To delve further into the influence of export spillovers on foreign firms, the sample was divided into domestic firms exporting ORD or HBR products and, for each subsample, the specification of the comparison regression was applied (column 1, table 6).
A relevant question for economies that depend greatly on a small number of countries, as is the case of Mexico, is whether export spillovers increase the possibility that domestic firms export to other different international markets.
Further, the study concludes that the major contributing factor in volatility spillovers is equity portfolio, and the spillover cycle of business cycle variations and asset market return is correlated.
FDI spillovers and their interrelationship with trade.
Bond market spillovers from Saudi to other GCC countries are found to be insignificant, which is consistent with previous findings that bond spreads are largely influenced by global factors.
* Second, there is a company premium in making the most of their own intangible investments (or from other companies' intangible spillovers), and those firms will have competitive success.
Intra-and inter-regional return and volatility spillovers across emerging and developed markets: Evidence from stock indices and stock index futures.
Firms can improve their market profitability by undertaking investments in R&D, which reduce their unit costs of production and entail positive spillovers on the rival's cost.
Policy interest rates generally rise by between 10-20 basis points, and by more for those economies who are members of the Euro Area, reflecting the spillovers into demand from stimulus elsewhere.
Earlier studies (Coe and Helpman 1995; Kao, Chiang, and Chen 1999; Keller 1998) as well as a more recent one (Ang and Madsen 2013) focus on various transmission channels of knowledge spillovers while they neglect the institutional status in the recipient country.
Liu and Pan (1997) examine the mean and volatility spillovers from U.S.
Such taxes directly incentivize workers to enter professions with the highest social spillovers.