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This paper revisits the link between exchange rate and interest rate considering the role of uncertainty due to infectious diseases in the South African economy using monthly data from January 1985 to August 2020 within a nonparametric framework. First, we examine the relationship between the exchange-interest rates hypothesis and observe a significant positive link, especially during the pandemic. Second, we analyze the volatility spillover among exchange rates, interest rates and other macroeconomic fundamentals and find a strong connection with the interest rate being net receivers of shocks. Third, with evidence of nonlinearity in the variables, the nonparametric quantiles-based causality test shows that the spillover for each asset is driven by pandemic uncertainty around the median quantiles. Conclusively, this suggests that the role of global health news in influencing the South African financial cycle which consequently leads to capital flows and movements in the prices of assets across financial markets cannot be downplayed. Relevant policy implications can be drawn from these findings.

MENA region is full of natural resources and has a huge mineral sector in their economies. CO2 emissions are increasing global warming and foreign trade and investments can play their roles in determining CO2 emissions in the resource-rich MENA countries. Moreover, spatial linkages are expected in the emissions and trade relationship, which could catch less attention in the environmental literature of the MENA region. Thus, the present research is motivated to capture the contributions of exports, imports, and Foreign Direct Investments (FDI) in consumption-based CO2 (CBC) emissions in twelve MENA economies from 1995 to 2020 by applying Spatial Autoregressive (SAR) Model. Our results exhibit the existence of the Environmental Kuznets Curve (EKC). Moreover, the impact of exports is found negative in direct and total estimates. Thus, exports of the MENA region are reducing CBC emissions in the MENA region and transferring emissions to their importing partners. Moreover, the spillovers of exports are found positive and exports of one MENA country are also responsible for the transfer of CBC emissions to other MENA neighboring countries, which corroborates the trade linkages of the MENA region. Imports have a positive effect on CBC emissions in direct and total effects. This result confirms the fact of energy-intensive imports of the MENA region, which have environmental consequences in the domestic economies and the whole MENA region. FDI increases CBC emissions in direct and total estimates. This result substantiates the pollution Haven hypothesis in the MENA region and is in line with the fact that FDI is mostly coming in the mineral, construction, and chemical sectors. The study suggests that MENA countries should promote exports to reduce CBC emissions and to reduce energy-intensive imports in the region to save the environment from CBC emissions. Moreover, FDI should be attracted to the clean production process and environmental standards should be raised to avoid the environmental problems of FDI in the MENA region. [ABSTRACT FROM AUTHOR]

This study examines the connectedness in high-order moments between cryptocurrency, major stock (U.S., U.K., Eurozone, and Japan), and commodity (gold and oil) markets. Using intraday data from 2020 to 2022 and the time and frequency connectedness models of Diebold and Yilmaz (Int J Forecast 28(1):57–66, 2012) and Baruník and Křehlík (J Financ Econom 16(2):271–296, 2018), we investigate spillovers among the markets in realized volatility, the jump component of realized volatility, realized skewness, and realized kurtosis. These higher-order moments allow us to identify the unique characteristics of financial returns, such as asymmetry and fat tails, thereby capturing various market risks such as downside risk and tail risk. Our results show that the cryptocurrency, stock, and commodity markets are highly connected in terms of volatility and in the jump component of volatility, while their connectedness in skewness and kurtosis is smaller. Moreover, jump and volatility connectedness are more persistent than that of skewness and kurtosis connectedness. Our rolling-window analysis of the connectedness models shows that connectedness varies over time across all moments, and tends to increase during periods of high uncertainty. Finally, we show the potential of gold and oil as hedging and safe-haven investments for other markets given that they are the least connected to other markets across all moments and investment horizons. Our findings provide useful information for designing effective portfolio management and cryptocurrency regulations. [ABSTRACT FROM AUTHOR]

We examine, both theoretically and empirically, how the presence of FDI affects product quality of domestic firms through worker mobility. Mobility of more productive workers from foreign‐invested to domestic firms lowers the cost of production and contributes to improvement in the quality of goods produced by domestic firms. Profit maximisation by firms yields a structural relationship between unobserved product quality and observed revenue, which allows us to identify the impact of FDI on product quality. We use the theoretical model to frame empirical estimation, where we propose a novel approach to correct for sample selection bias. Under some mild assumptions, a set of population moments are derived and estimated using firm‐level data from China's beverage manufacturing industry. We find that, on average, (i) working for foreign‐invested firms boosts the skill level of workers by 11.12 per cent and (ii) the probability that an FDI‐trained worker will move to a domestic firm is approximately 0.3. Estimation of the structural parameters shows that a one per cent increase in FDI leads to approximately 1.4 per cent improvement in product quality of domestic firms in China's beverage manufacturing industry. [ABSTRACT FROM AUTHOR]

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Using dynamic factor models and state-space techniques we quantify financial cycles for twenty European countries over the period 1960Q1–2015Q4 capturing imbalances across credit, housing, bond and equity markets. The paper documents the existence of slow-moving and persistent financial cycles, as well as cross-country synchronicity patterns in Europe. Spillover analysis points at the significant role the global financial cycle and the regional European financial cycle play in shaping national financial market dynamics. Quarterly Bayesian panel VAR estimations suggest that financial cycles influence business cycles and public debt dynamics, with stronger shock transmission observed in the euro area and systemic European economies. [ABSTRACT FROM AUTHOR]

R&D activities by indigenous firms create new knowledge and technology in a region, while foreign-owned firms bring advanced knowledge and technologies from their home countries. This paper analyses the spillover effects of R&D-active or foreign-owned firms on total factor productivity of domestic non-R&D active firms. It combines two sets of literature: the one on spillover effects of intra-industry and inter-industry linkages and the other on the regional context in which these linkages occur. As measured through input-output tables, industry linkages reveal that R&D or FDI spillovers take on diverse roles in regions. Focusing on productivity spillover effects on domestic non-R&D active firms in three regions in Belgium between 2000 and 2017, we conclude that R&D spillovers generally occur more frequently than FDI spillovers. By focussing on two sources of spillovers, the paper offers a more nuanced picture of industrial transformation and regional path development. Region-specific analyses show that the effects on the productivity of domestic non-R&D active firms originate from different spillover sources. The impact of spillovers and their contribution to industrial transformation differs according to the regional development path characterised by the varying degrees of organisational thickness and specialisation of the regional innovation system. Linkages of R&D active or foreign-owned firms with domestic non-R&D active firms exert a heterogeneous impact on their productivity. Therefore, an adapted regional innovation policy, such as smart specialisation, should consider these region-specific spillover effects on productivity when establishing future regional development paths. [ABSTRACT FROM AUTHOR]

Foreign Direct Investment (FDI) and the resulting spillover effects can be important for a country's development and economic growth. Using panel data from 2004 to 2019 in the Czech Republic's manufacturing industry, this paper finds the following. First, FDI firms generate positive horizontal labour effects and backward labour linkage on domestic firms. However, other hypothesized effects of FDI firms, such as horizontal and backward competition and the forward linkage of FDI, were not significant. Second, FDI firms at the mature and shakeout stage generate more spillover than those at the introduction and growth stage. There is no spillover impact on domestic firms by FDI firms at the decline stage. This is the first paper to examine the role of firm life cycle on the spillover effects of FDI. [ABSTRACT FROM AUTHOR]

In developing countries, the evidence regarding the direct and indirect effects of FDI on economic and financial performance at the firm level is mixed. To contribute to this literature, we provide empirical evidence of direct and indirect effects of FDI on firm's performance, using return on assets (ROA), gross revenues and gross revenues growth rate as performance measures. We examine the private formal enterprise sector in Ecuador from 2007 to 2018. Our identification strategy relies on the use of the Generalized Method of Moments (GMM) methodology for dynamic panel data which allows us to control for potential endogeneity, autocorrelation and heteroskedasticity issues. The results suggest that firms with inward FDI grow faster than their counterparts, and firms with higher amounts of FDI as a share of total revenues have on average higher levels of gross revenues. Moreover, we find negative horizontal wages and gross revenues spillover effects on gross revenues growth rates, but positive horizontal gross revenues spillover effects on ROA. There is also significant evidence of negative horizontal spillover effects in all economic sectors, whereas evidence for forward and backward spillovers is heterogeneous across them. [ABSTRACT FROM AUTHOR]

We study the effects of changing Medicaid reimbursement rates for primary care services on behavioral health outcomes—defined here as mental illness and substance use disorders. Medicaid enrollees are at elevated risk for these, and other, chronic conditions and are likely to have unmet treatment needs. We apply two‐way fixed‐effects regressions to survey data specifically designed to measure behavioral health outcomes over the period 2010–2016. We find that higher primary care reimbursement rates reduce mental illness and substance use disorders among non‐elderly adult Medicaid enrollees, although we interpret findings for substance use disorders with some caution as they may be vulnerable to differential pre‐trends. Overall, our findings suggest positive spillovers from a policy designed to target primary care services to behavioral health outcomes. [ABSTRACT FROM AUTHOR]

In this paper, we analyze economic costs and consequences of local non‐pharmaceutical interventions (NPIs) aimed at containing the Covid‐19 pandemic. Using comprehensive data on municipal and regional policies in Norway, we implement a difference‐in‐differences framework identifying impacts of local NPIs from discontinuous differential shifts in outcomes following the implementation of new policies. In treated municipalities, local NPIs lead to persistent reductions in mobility, persistent increases in unemployment, and transient reductions in consumer spending. Analyses of spatial spillovers show that the implementation of local NPIs increases retail mobility in untreated neighboring municipalities. Overall, our findings suggest that local NPIs have economic consequences for local economies and induce residents to shift their consumption of goods and services to neighboring municipalities. [ABSTRACT FROM AUTHOR]

The influence of recent global shocks such as the COVID-19 pandemic and the Russian–Ukrainian war on the variability of major macroeconomic trends not only shows synchronized behavior across economies but also induces similar policy responses to counter these shocks. The purpose of this article is to explore the transmission of inflation among the G20 economies and evaluate its contribution to domestic inflation. To this end, we use the Diebold and Yilmaz spillover approach. The results that emerge from unconditional analysis reveal stark dissimilarities in inflation spillover patterns between advanced and emerging economies. Advanced economies are subject to higher spillover rates and thereby more exposed to global shocks compared to their emerging counterparts. Inflation in emerging countries is mainly derived from idiosyncratic shocks, while global shocks have only a modest influence on domestic inflation. In addition, bilateral spillovers among the G20 members show that the average pairwise directional spillovers between emerging economies are lower compared to advanced economies. The results pertaining to the spillover dynamics, on the other hand, show that total inflation spillover has a clear upward trend, indicating that the overall interconnectedness between G20 countries is increasing over time. Moreover, the estimates of spillover dynamics show a growing influence of received inflation spillovers from external shocks in both advanced and emerging economies. Policymakers in advanced economies are expected to respond to global shocks to mitigate the influence of spillovers, which is essential for economies that display high spillovers and turn out to be net receivers of shocks. However, public agencies in emerging economies should concentrate more on internal shocks to control inflation while not ignoring global shocks. [ABSTRACT FROM AUTHOR]

Location spillovers are a common theme in real estate and urban economics research, but this is the first test on the relationship between hospital service quality and the demand for proximate medical office space. We hypothesize that hospitals with reputations for high quality service represent an opportunity for physicians, and other service providers, to benefit from reputation spillovers. Further, the reputation benefit is capitalized into the practices' willingness to pay for proximate office locations, thereby driving up the rental rates for nearby space. We find that distance from, and overall quality ranking of the hospital, both independent and in concert, are significantly linked to the base rents. The degradation in rent with distance is significantly greater when the hospital is ranked high in overall service quality, supporting the notion that a rent premium is linked to the high-quality hospital rather than simply an artifact of the neighborhood. [ABSTRACT FROM AUTHOR]

This paper studies whether school-based financial education has spillover effects from children to parents. Leveraging data from a large-scale experiment with public high schools in Peru and credit bureau records on the parents of the youth targeted, this study measures the impact of providing personal finance lessons during secondary school on parental financial behavior. Financial education lessons in the school yield limited average spillover effects, but lead to sizable effects on parental financial behavior within disadvantaged households. Among parents from poorer households, the treatment reduces default probability by 26%, increases credit scores by 5%, and increases current debt levels by 40%. The treatment has stronger effects among the parents of daughters, who experience a significant 6.7% increase in their credit score and a 28% reduction in their loan portfolio in arrears. Among the parents of boys, most of the spillover effects are muted. [ABSTRACT FROM AUTHOR]

Using the frequency-domain spillover index method, we investigate time-frequency spillovers and their underlying drivers among fossil energy, clean energy and metal markets. We find that short-term spillovers are stronger than long-term spillovers. Global clean energy markets are powerful spillover transmitters that can have strong impacts on fossil energy and metal markets. Rare earth metals are most vulnerable to spillover effects from clean energy and base metal markets, particularly in the long term. Different clean energy sources and metal markets have heterogeneous connectedness, e.g., the impact of wind energy on rare earth market is greater than that of solar energy. The short-term spillovers are mainly driven by policy changes, while the long-term spillovers are mainly affected by stock market uncertainty and economic fundamentals. Our findings have important implications for the construction of optimal diversification strategies and the design of policy incentives to promote clean energy investments across different time horizons. [ABSTRACT FROM AUTHOR]

Using a two-step VAR asymmetric BEKK GARCH model, this research explores the asymmetric return and volatility connectedness between gold and several energy markets during three subperiods: pre-COVID, before vaccination, and after vaccination. Gold's returns and volatility spillover are generally found to be time- and energy-dependent. In addition, the optimal weights, hedge ratios, and hedging effectiveness of energy commodity and gold pairs are calculated during the three subperiods. The results of optimal weights show that investors should increase their investment in energy commodities more than gold (energy commodities) during the after-vaccination period (the pre-vaccination period). Moreover, the hedging strategy would only be effective within the COVID-19 vaccination period, which could have implications for the strategic asset allocation of policy-makers and international investors. Finally, we examine the potential determinants of conditional correlations between gold and energy markets. VIX, EPU, and new confirmed cases are found to be the main predictors of correlations for most energy commodity–gold pairs during the examined period. [ABSTRACT FROM AUTHOR]

This paper examines frequency dynamic spillovers in return and volatility and the hedging ability of Green Bonds, gold, silver, oil, the US dollar index, and volatility index against downside US stock prices before and during the COVID-19 pandemic outbreak and for the short and long run. To do so, we use the Diebold and Yilmaz (2014), the TVP-VAR model, and the frequency spillover index by Baruník and Křehlík (2018). We show that the short-term volatility spillovers dominate their long-term counterparts. Green Bond is net transmitters of spillovers in the system at the short term and net receivers at the long term. S&P500 and silver (USDX and oil) are net transmitters (receivers) of short- and long-term spillovers. Gold and VIX are net receivers of short-term spillovers and net transmitters of long-term spillovers. COVID-19 crisis has more effects on the short-term spillover, which reaches its highest level early 2020. COVID-19 and time horizons lead the direction and the magnitude of spillovers. The Quantile-on-Quantile regression analysis shows significant nonlinear relationships between markets under study. More interestingly, we show that green bonds and gold are safe haven assets for US equity investors during COVID-19. On the other hand, a mixed portfolio offers higher diversification benefits. Finally, hedging effectiveness is dependent on COVID-19 and time horizon. [ABSTRACT FROM AUTHOR]

In this paper, we examine the comovements and volatility spillovers of four US dollar exchange rates for four African currencies in the period of the Sub-Saharan African Eurobond issue. The currencies considered are the US dollar exchange rates for the Ghana Cedi (GHS), Nigeria Naira (N), The Kenyan Shilling, and the South African Rand (ZAR). We considered exchange rate data from 2006 (the year the first Eurobond was issued by Seychelles on the SSA) to January 2021. This period is divided into three subperiods, which are the period of Light Eurobond Issue, the Period of Heavy Eurobond Issue, and the Period of Global Financial Crisis (GFC). We observe different correlation dynamics and volatility spillovers across the period of our study. Specifically, significant comovements and volatility spillovers were recorded in the Light Eurobond Issues and the Global Financial Crisis Period. The conditional correlation and the volatility spillovers are not well pronounced in the Heavy Eurobond Issue Period. This implies that individual currency US dollar exchange rates are behaving idiosyncratically. The findings provide diversification opportunities for forex market players and investors looking into the African continent. [ABSTRACT FROM AUTHOR]

We present findings from a study of the local-economy impacts of Lesotho's Child Grants Programme and of a multi-faceted rural development intervention. We designed a micro-data parameterised general equilibrium model and used it to simulate the direct and indirect impacts of the two interventions, considering income and production spillovers. The Child Grants Programme, alone and in combination with the rural development programme, generates total discounted benefits that exceed discounted programme costs. Local-economy spillovers amplify the benefit-cost ratio of both cash transfers and productive interventions. By better integrating with outside markets, it is possible to attain substantial cost-effective income gains for local economies. [ABSTRACT FROM AUTHOR]

We propose an approach for jointly measuring global macroeconomic uncertainty and bilateral spillovers of uncertainty between countries using a global vector autoregressive (GVAR) model. Over the period 2000Q1–2020Q4, our global index is able to summarize a variety of uncertainty measures, such as financial-market volatility, economic-policy uncertainty, survey-forecast-based measures and econometric measures of macroeconomic uncertainty, showing major peaks during both the global financial crisis and the COVID-19 pandemic. Global spillover effects are quantified through a novel GVAR-based decomposition of country-level uncertainty into the contributions from all countries in the global model. We show that this approach produces estimates of uncertainty spillovers which are strongly related to the structure of the global economy. [ABSTRACT FROM AUTHOR]

Background Oil rents (OR) and natural gas rents (NGR) have significant contributions to the income of the Middle East and North Africa (MENA) economies and may increase emissions. Moreover, spatial autocorrelation is expected in carbon dioxide (CO2) emissions due to the geographically closed economies in the MENA region. Thus, we examine the impact of OR and NGR on CO2 emissions caring spatial dimensions and analyze the environmental Kuznets curve (EKC). Methods We apply the spatial Durbin model technique on the effects of OR, NGR, and economic growth on CO2 emissions in 17 MENA nations from 2000–2019, i.e., Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, the United Arab Emirates (UAE), and Yemen. Moreover, diagnostic tests are applied to reach the most appropriate spatial specification and to have the most robust results. Results The results disclose that CO2 emissions have spillovers and emissions of any country can damage the environment of neighboring countries. The EKC is corroborated with a turning point of 38,698 constant 2015 US dollars. Israel and Qatar are in 2nd phase of the EKC, and 15 MENA economies are in 1st stage. Thus, the economic expansion of most economies has ecological concerns. The effect of natural gas rents is found statistically insignificant. Oil rents have minute negative effects on emissions of local economies with an elasticity coefficient of −0.2117. Nevertheless, these have a positive indirect effect with an elasticity coefficient of 0.5328. Thus, the net effect of oil rents is positive. One percent increase in oil rents could accelerate 0.3211% of emissions. Thus, we suggest the MENA countries reduce reliance on oil rents in their income to avoid the negative environmental effects of the oil sector.

AbstractMarket participants, policymakers, and practitioners might have ignored the connection between global commodities and the currency markets in sub-Saharan Africa and the potential for contagion at various time scales. We examine the degree of time-varying connectivity and contagion between commodities and the exchange rates of sub-Saharan African countries (SSA). We use the Barunik and Krehlik (BK18) spillover index on monthly data from 1990 to 2019 to illustrate the dynamic connectivity in the time and frequency domains. The BK18 captures the nonlinear, nonstationary, asymmetric, and time-dependent comovements in the relationship. Our analysis indicates that the relationship between commodity returns and exchange rates in Sub-Saharan Africa (SSA) is both time- and frequency-dependent, but stronger at higher frequencies. We observe that, among the three commodities, only crude oil is a dominant spillover propagator. The exchange rates of South Africa dominate spillover transmission among metal-producing countries, and those of Cote d’Ivoire dominate agricultural-producing countries. The dynamic results reveal significant spillovers between commodities and exchange rates during economic turmoil, indicating contagion among the markets. Since uncertainty spillover is more severe amid market upheaval, investors should use their awareness of market dynamics and fluctuations to protect their holdings from lower asset returns. Policymakers should keep a close eye on spillovers because they endanger cross-market connections.

The emergence of ecosystem-based fisheries management (EBFM) has broadened the policy scope of fisheries management by accounting for the biological and ecological connectivity of fisheries. Less attention, however, has been given to the economic connectivity of fisheries. If fishers consider multiple fisheries when deciding where, when, and how much to fish, then management changes in one fishery can generate spillover impacts in other fisheries. Catch-share programs are a popular fisheries management framework that may be particularly prone to generating spillovers given that they typically change fishers' incentives and their subsequent actions. We use data from Alaska fisheries to examine spillovers from each of the main catch-share programs in Alaska. We evaluate changes in participation-a traditional indicator in fisheries economics-in both the catch-share and non-catch-share fisheries. Using network analysis, we also investigate whether catch-share programs change the economic connectivity of fisheries, which can have implications for the socioeconomic resilience and robustness of the ecosystem, and empirically identify the set of fisheries impacted by each Alaska catch-share program. We find that cross-fishery participation spillovers and changes in economic connectivity coincide with some, but not all, catch-share programs. Our findings suggest that economic connectivity and the potential for cross-fishery spillovers deserve serious consideration, especially when designing and evaluating EBFM policies.

Utilizing survey information obtained from five irrigation schemes in southeastern Africa, we investigated the influence of agricultural innovation platforms (AIPs) and monitoring tools on a range of farm and household outcome indicators. Doubly robust estimation was used to measure the effects of these interventions, with a variety of other methods used for robustness checks. Involvement in AIP activities and using monitoring tools was found to be statistically associated with increased on-farm income together with an increased capacity to fund child education. Participation in AIPs also had a significant positive influence on off-farm income and reduced food shortages. Moreover, spillover effects were accounted for in the estimations and statistically significant positive effects were found regarding on-farm income for non-participants. These findings suggest that interventions with strong agricultural innovation system approaches in irrigation schemes in Africa could provide significant societal benefits. [ABSTRACT FROM AUTHOR]

This study examines the time-varying connectedness among the realized volatilities of seven major cryptocurrencies between January 2020 and May 2022. To this end, we implement the time and frequency connectedness time-varying parameter vector autoregression (TVP-VAR) approaches. Our findings propose that (i) the COVID-19 pandemic significantly affected the dynamic connectedness; (ii) the total connectedness index hits its apex around the official announcement of the pandemic; (iii) in line with previous studies Ethereum, Bitcoin, and Link are the largest propagators/recipients of shocks; (iv) the tightest volatility interdependencies are related to the short-run. [ABSTRACT FROM AUTHOR]

The interdependence of carbon allowances and different energy sources in extreme market behavior is still unsettled in the literature. Using different types of static and time-varying copulas, this piece of research aims to quantify the dependence structures of Europe-based carbon future returns and selected energy future returns (i.e. coal, electricity, oil, and natural gas), and to investigate whether or not these dependence structures are influenced by economic indicators. Our results show strong evidence that timevarying parameter copulas with extreme tails are the best fit to the dependence structure. We also find that the speculation activity and the uncertainty of the state of the global economy are two important components of this robust dependence structure in the period of oil price crises. These findings are relevant for the implementation of effective policies to make the carbon market operate more efficiently and stably. [ABSTRACT FROM AUTHOR]

Market participants, regulators, and practitioners might have disregarded the prospective integration of African markets and the integration of commodity markets with traditional markets. We examine the nonhomogeneous return spillovers and contagion between 12 commodity sectors and African equities under the time-varying parameter vector autoregressions connectedness method. With daily datasets from February 2010 to February 2022, the average connectedness analysis suggests a low spillover transmission between commodities and respective African equity markets. We reveal that the return connectedness between commodities and African equities is largely driven by idiosyncratic spillovers. The results from the dynamic connectedness analysis reveal significant spillovers between the studied markets. Our findings underscore financial market contagion during stressed trading periods, suggesting that global commodity and African equity markets are not entirely immune to global market shocks. Therefore, prompt management of commodity price volatility and the integration between economies could result in controlled impacts of financial market contagion. Portfolio managers should deploy effective risk management strategies that capitalise on the nonhomogeneous roles of some assets as diversifiers, hedges, and safe havens across time horizons. Additional implications of our findings are discussed. [ABSTRACT FROM AUTHOR]

A speculative bubble arises when the market price of a financial asset diverges from its fundamental value, resulting in abrupt and disproportionate hikes that cannot be rationally explained by its underlying intrinsic value. This behavior is often followed by market crashes, as observed during historical asset bubbles such as the Dutch Tulip Mania (1634-1637), the Mississippi bubble (1719-1720), the South Sea bubble (1720), the stock-market bubble of the US (1921-1929), the Japanese stock market and real estate bubbles (1986-1991), and the recent US housing bubble and the stock market crash (2002-2006). In the housing market, speculative bubbles can be attributed to excessive public expectations of future price increases, leading to overpricing and eventually diminishing demand and instability of inflated home prices (Case and Shiller, 2003). The cycle of a housing market bubble involves individuals continuing to purchase houses despite awareness of overpricing, with the expectation of compensation through further price increases. This perception of continuous price increases leads to increased demand, which further drives up prices. However, house prices cannot increase indefinitely, and the steady increase eventually becomes unstable, resulting in a downward adjustment that may occur at a much faster pace than price increases. The existence of speculative bubbles in stock and housing markets has led academics to investigate their potential role in financial crises. [ABSTRACT FROM AUTHOR]

This paper evaluates the impact of Brexit-related uncertainty on the economies of the UK, EU, and the US. We propose a measure of Brexit uncertainty that has not been employed before in the literature. We first construct a binary variable by selecting Brexit-related events. We subsequently employ the Qual VAR model of Dueker [2005. "Dynamic Forecasts of Qualitative Variables: A Qual VAR Model of US Recessions." Journal of Business & Economic Statistics 23: 96–104] to transform this variable to a continuous latent variable that captures uncertainty on important economic and financial variables. Next, this latent variable enters a structural Factor-Augmented Vector AutoRegression model combined with 452 macro and financial variables for the sample countries. Overall, our results indicate that the prolonged period of uncertainty, had a positive effect on the economies of major EU countries and negative effects for the UK economy. Additionally, the UK is the most important net sender of uncertainty spillovers in the EU, while Germany and France are among the most important net receivers of uncertainty shocks. [ABSTRACT FROM AUTHOR]

Do firms replicate the tax avoidance schemes of their peers? The present paper provides evidence along these lines. An event study shows that a US-listed enterprise is more likely to enter a specific tax haven if another US-listed enterprise operating in the same sector already owns subsidiaries in that tax haven. The inclusion of three-way fixed effects, the absence of pre-trends, and several robustness checks consolidate the results. Moreover, profit shifting spillovers vary over time, across sectors, and by tax haven. The findings suggest that aggressive tax planning strategies spread within industries and carry policy implications. [ABSTRACT FROM AUTHOR]

This paper maps research outcomes and identifies spillover effects at a US University Research Center (URC) that offers user facilities for nanotechnology research. We use scientometric and network science approaches to analyze measures of topical orientation, productivity, impact, and collaboration applied to URC-related Web of Science abstract publications records. A focus is on the analysis of spillover effects on external organizations (i.e., non-affiliated users). Our findings suggest the URC's network relies on external organizations acting as brokers, to provide access to the facilities to other external organizations. Analysis of heterophily indicates that collaboration among internal and external organizations is enhanced by the facilities, while articles written by a mix of co-authors affiliated with internal and external organizations are likely to be more cited. These results provide insights on how URCs with user facilities can create conditions for diverse collaboration and greater research impact. [ABSTRACT FROM AUTHOR]

The importance of cooperation in innovation has been widely studied. Cooperative settings are potential platforms for the indirect and direct transmission of knowledge. This article aims to present the results of a systematic literature review on innovation cooperation. It covers topics such as the effects of cooperation according to different governance structures, cooperation drivers, partner's attributes, firm size, regional factors, and the host country's current stage of economic development. In general, cooperation is an organizational setting that determines knowledge sharing and diffusion. A significant part of the empirical evidence analyzed here reveals that cooperation has a positive effect on innovation performance. Such a positive correlation is highly likely to be found in case studies of technology-intensive sectors in small regions. However, large datasets, mainly from Europe and China, also yield positive results. Results may also vary according to firms' attributes and the type of cooperation agreement adopted. [ABSTRACT FROM AUTHOR]

This paper analyzes the potential spillovers of a slowdown in Chinese growth to the United States and the rest of the world. Through a combination of structural VAR and DSGE analyses, we find that (1) spillovers from China to the rest of the world have grown significantly in the past decade; (2) the negative growth spillovers to the United States are more modest than to emerging market economies—particularly for commodity exporters—or other advanced economies, primarily because the latter group has larger direct exposure in trade to China; and (3) although the United States has limited direct financial exposure to China, the negative spillovers to the U.S. economy are amplified significantly if the negative Chinese growth shock leads to adverse global risk sentiment and monetary policy in the United States is constrained in its reaction. [ABSTRACT FROM AUTHOR]

We strongly reject the hypothesis of theater design revenue neutrality using a large dataset of Chinese theaters. Instead, we find large increasing returns in revenue from adding auditoria up to 9 auditoria, close to constant returns from adding seats up to an intermediate seating capacity of about 120 seats, beyond which decreasing returns prevail, and a large revenue premium to having an Imax auditorium. These revenue gains are largely due to differences in capacity utilization rates, and to a lower extent to differences in screening intensity (more showings per screen), while price differences play a negligible role. We discuss various mechanisms that may rationalize deviations from theater design neutrality. We conclude that a large fraction of Chinese theaters have too few auditoria and too many seats per auditorium, although this is less so for recently built ones. These violations of profit maximization are likely explained by the long-term, irreversible, and risky nature of theater design choices. [ABSTRACT FROM AUTHOR]

This paper derives the empirical estimation model from the endogenous economic growth theory, and tries to provide an effective and reasonable answer to the question 'how trade affects high-quality development through spillovers' from the perspective of spatial interdependence. Based on the data of 69 countries from 2000 to 2015, it is confirmed that there is an obvious spatial correlation between neighboring countries' TFP, the TFP of geographical and economic neighboring countries shows 'competition effect', while the TFP of cultural neighboring countries shows 'first spillover effect, then competition effect'. The R&D capital investment has no spatial effect on TFP of geographically or economically neighboring countries, but it has a significant 'spillover effect' on TFP of culturally neighboring countries. Technology spillovers caused by international trade are not only an important factor for countries to promote TFP, but also the core driving force to achieve high-quality development. [ABSTRACT FROM AUTHOR]

Previous studies yield ambiguous results from using country-level indices of intellectual property rights (I.P.R.) protections to test their relation to foreign direct investment (F.D.I.). This study develops a simple model featuring vertically linked stages of production to show that country-level I.P.R. indices might cause the ambiguity by ignoring differences in I.P.R. protection strength across industries. We demonstrate that industry-level I.P.R. indices resolve ambiguity over the empirical nexus between I.P.R. protections and F.D.I. [ABSTRACT FROM AUTHOR]

Inequality has been of growing interest in the political debate and in theoretical and empirical studies for some decades. Therefore, the study of regional inequality raises some relevant questions related to the spatial nature of the data. In fact, adopting a regional point of view implies the opportunity to consider spatial interactions, which traditional studies do not include in their analyses. Therefore, the study aims to analyze income inequality before (GINI1) and after (GINI2) income and transfers, using a data set of 116 countries during a time period from 1985 to 2018. Spatial Durbin and Spatial Lag Models are applied to address spatial interactions and the spillover effect between countries and regions. First, the estimation results verify the existence of spatial correlations in income inequality for both GINI1 and GINI2. Second, both GINI1 and GINI2 produce relatively similar scenarios, which implies that the effects of the independent variables do not differ in both scenarios. Third, globalization widens the income differences of neighboring regions significantly. Fourth, urbanization has a negative and significant effect, which generates a spillover effect and reduces the inequality of neighboring economies. Finally, there is evidence that an inverted Kuznets U is rejected both for economic and financial development. Thus, inequality at the regional level provides useful insights for policy makers, as it facilitates the assessment of the effectiveness of strategies aimed at reducing regional disparities and helps to develop actions based on the location and its environment. [ABSTRACT FROM AUTHOR]

Financial contagion represents a very controversial concept in international finance being one of the most frequently referenced subjects and yet least understood. The literature highlights that shocks and crises can spillover from a country to others through various channels. Although it is hard to determine exactly the cause and channel that lead to the transmission of the initial shock, it is more than clear that these events are encouraged when economies are integrated or in the process of global integration. The core of this study is to capture evidence of financial contagion based on a sample of daily closing prices from 17 different market indices, for the period January 1st, 2007 – October 15th, 2021. We employed the shortfall method for estimating the risk and we built a model within the framework of Bayesian Neural Networks (BNN). Given the results, evidence of contagion was sensed between some of the 17 markets within the sample, however the causality between them differed from the full sample period to the sub-samples periods. Nevertheless, we found that for the sub-sample corresponding to January 1st, 2020 – October 15th, 2021, period that encompasses the global exogenous shock triggered by the COVID-19 pandemic that appeared in Romania at the beginning of 2020, the relationships between global markets were decoupled, contagion being sensed mostly regionally, at the level of the European countries.

This research utilizes the Diebold and Yilmaz spillover model to examine the correlation between geopolitical events, natural disasters, and oil stock returns in Asian OPEC+ member countries. The study extends prior research by investigating the dynamics of the Asian OPEC+ oil market in light of recent exogenous events. The analysis commences by creating a self-generated Asian OPEC+ index, which demonstrates significant volatility, as indicated by GARCH (1, 1) model estimation. The results obtained from the Diebold and Yilmaz spillover test indicate that, on average, there is a moderate degree of connectedness among the variables. However, in the event of global-level shocks or shocks specifically affecting Asian OPEC+ countries, a heightened level of connectedness is found. Prominent instances of spillover events observed in the volatility analysis conducted during the previous decade include the COVID-19 pandemic, the conflict between Russia and Ukraine, and the Turkey earthquake of 2023. Based on the facts, it is recommended that investors take into account the potential risks linked to regions that are susceptible to natural calamities and geopolitical occurrences while devising their portfolios for oil stocks. The results further highlight the significance of integrating these aspects into investors’ decision-making procedures and stress the need for risk management tactics that consider geopolitical risks and natural disasters in the oil equity market.