Industry Spillovers Research Articles

Is evil rewarded with evil? The market penalty effect of corporate environmentally irresponsible events

AbstractThe negative response of the capital market to environmentally irresponsible events is an important governance mechanism that motivates enterprises to assume environmental responsibility. Based on the theory of effective markets and organizational legitimacy, this paper takes corporate environmentally irresponsible events in Chinese environmentally sensitive industries during the period of 2014–2018 as a research sample, and our work uses the event study methodology to explore the penalty effect of the capital market from a mathematical empirical and case empirical dimension. Furthermore, this research discusses the spillover effect of corporate environmentally irresponsible events in the capital markets. The empirical results show that once an irresponsible event is exposed, it causes a significant negative cumulative abnormal return (CAR) in the short term, and the difference between the industry and the ownership type leads to a significant difference in the duration and impact of the penalty effect. More interestingly, the capital market's penalty for corporate environmentally irresponsible events may have a notable industry spillover effect, but there are differences between the penalty effect and the spillover effect in different markets. This paper confirms that the penalty mechanism of the capital market related to an environmentally irresponsible event can effectively restrain the behaviour of the company involved and the industry to which it belongs, and it may also provide a new way for the government to build an eco‐environmental protection system of multisubject “co‐governance” and bring the punitive “forced” mechanism of the capital market to bear on corporate environmentally responsible behaviour.

NPO 최종소비지출의 지역·산업간 경제적 유발효과 : 지역산업연관표의 내생화를 중심으로

NPO 최종소비지출의 지역·산업간 경제적 유발효과 : 지역산업연관표의 내생화를 중심으로

Shareholder wealth effects of corporate fraud: Evidence from Taiwan’s securities investor and futures trader protection act

We examine the shareholder wealth effects of Taiwanese firms accused of corporate fraud, and we find evidence that shareholders benefited from the passage of Taiwan’s Securities Investor and Futures Trader Protection Act. We not only examine the shareholder wealth effects at different stages of the corporate fraud violation cycle, but we also find evidence of a filing effect and an industry spillover effect. We conclude that shareholders can benefit from external monitoring of the firm’s managers, particularly in cases when firms operate in environments with weaker internal governance mechanisms.

Mudança Estrutural, Hiato Tecnológico e Capital Humano em um Modelo Norte-Sul de Crescimento com Restrição de Balanço de Pagamentos

Resumo Este artigo tem como objetivo apresentar um modelo macrodinâmico Kaldoriano em que o processo de convergência ou divergência entre o Norte (desenvolvido) e o Sul (em desenvolvimento) é uma função da mudança estrutural e do hiato tecnológico. A participação da indústria na economia do Sul e o hiato tecnológico se tornaram endógenos para explicar a dinâmica do crescimento compatível com o equilíbrio no Balanço de Pagamentos. Para que ocorra o processo de catching up, há a necessidade do aumento das atividades inovativas do Sul. O modelo desenvolvido exibe equilíbrios múltiplos: um estável e outro instável. No equilíbrio estável, o Sul deve apresentar, conjuntamente, maior desenvolvimento do seu Sistema Nacional de Inovações e elevados efeitos de spillovers industriais em relação ao nível de hiato tecnológico existente.

The Effects of Industrial Spillover on Unemployment in the Provinces of Iran

One of the main problems of Iran’s economy is the high unemployment rate. Thus, recognizing the factors affecting unemployment is an important step to reduce the social undesirable effects of unemployment. The study investigates the spillover effects of industrialization on unemployment by using the provincial-level data for the 2006-2015 period and the spatial econometric approach. Evidence from the model estimation shows that industrial development and economic growth have a negative and significant effect on unemployment, but the effect of the population on unemployment is positive and statistically significant, as a one percent increase in industrialization and production, the unemployment rate is reduced by 0.089 and 0.098 percent respectively. The spillover effects of industrialization are negative and insignificant and this is due to the lack of fundamental development of industry in the provinces of Iran. Therefore, the development of industry in each province based on relative advantages and land-using policy, improving the quality of the educational system to empower the workforce is the effective policies for reducing unemployment.

Private Equity in the Global Economy: Evidence on Industry Spillovers

Using a novel dataset on global private equity investments in 19 industries across 48 countries, we find that following investments by private equity funds labor productivity, employment, profitability, and capital expenditures increase for publicly-listed companies in the same country and industry. This suggests that positive externalities created by private equity firms are absorbed by other companies within the same industry. These effects are more pronounced in country-industries with higher levels of competition suggesting that the competitive pressure from private equity-backed firms forces industry peers to react. On the financial side, we provide evidence that industry stock market returns increase subsequent to venture capital investments, while buyout investments lead to higher debt levels within the industry. Overall, our findings suggest that private equity investments have important spillovers to publicly traded firms and the real economy.

Have Academic Patents been Overestimated? An Analysis of University and Industry Spillovers.

Previous studies have compared the contributions of academic and firm inventions to economic development and technological innovation. This literature suggests that academic patents generate more k...

외생화 및 내생화 기법을 이용한 산업연관효과 비교 분석: 주거용 건물 건설업을 중심으로

외생화 및 내생화 기법을 이용한 산업연관효과 비교 분석: 주거용 건물 건설업을 중심으로

An Empirical Study on the Synergic Relationship between the Regional Sci-Tech Innovation Platform and the Development of Strategic Emerging Industries

The construction of regional STI platform is a significant carrier for cultivating and developing strategic emerging industries, and the synergistic coupling between the layout of such construction and industrial development’s stage and demands is the prerequisite and basis for realizing industry support of STI platform. From both the width and intensity of the synergistic coupling, this paper constructs the synergetic relationship measure model, and verifies its effectiveness and feasibility through the example of Guangdong Province. The survey finds that in the synergetic relationship between them in Guangdong, there are large regional differences, embodied in four types: platform- driven, industrial spillover, synchronous development and benign interaction, and the width and intensity of the synergistic coupling is relatively low while a benign interaction coupling mechanism has not yet been formed. This study provides a scientific basis for effectively measuring the degree of the synergistic coupling between regional STI platform and industries, and optimizing the layout of STI platform construction.

Innovation externalities and the customer/supplier link

Abstract This paper proposes a novel channel through which innovation externalities can affect firm performance. I find cross-sectional evidence that the positive innovation outputs of customer firms increase their supplier profitability as measured by firm ROE. This result is robust to the inclusion of industry fixed effect, a control for both supplier and customer characteristics, such as ROE, advertisement expenditure, capital expenditure, firm age, industry concentration, institutional ownership, dividend yield, and a control for industry spillover or geographical spillover. To identify the causal effect of customer innovation outputs on supplier performance, I study an exogenous shock—State Street Bank and Trust Company v. Signature Financial Group, Inc.—and find that an increase in granted customer patents causes an improvement in future supplier performance. This effect is mainly driven by the demand channel and the knowledge diffusion channel from customers to suppliers.

Economic Links and Cross-Predictability of Stock Returns: Evidence from Characteristic-Based “Styles”*

Prior research has shown that information diffuses gradually across stocks that are economically linked at the industry level. I document a similar pattern when stock portfolios are formed based on characteristics that are used in the anomaly literature (e.g., size, value, asset growth). Specifically, characteristics are useful to identify economic links, and earnings surprises contain information about future returns of other firms that share similar characteristics (i.e., “similar-style†firms). Such style-based earnings surprises can be used to predict style returns in the time series. For the cross-section of stocks, I create a composite style-based earnings surprise measure (SESM), which generates an equal-weighted (value-weighted) long–short strategy return of 167 (101) basis points per month. I do not find that industry spillovers, the traditional post-earnings announcement drift, unconditional abnormal style returns or risk can explain the return predictability. My findings suggest a further channel of gradual information diffusion in security markets.

Multi-indicator Evaluation and Analysis of Coordinated Industrial Development of Urban Agglomerations

The level of coordinated industrial development in a region is considered as an important factor of measuring the construction of urban agglomerations. As the economic development patterns and stages vary in regions, a single-standard evaluation system is generally insufficient in evaluating and analyzing the coordinated industrial development of urban agglomerations. This paper, with multivariate values and diversified development demands considered, quantitatively describes the industrial development of urban agglomerations from four dimensions: economics, specialization, balance, and friendliness. On this basis, it synthesizes the indicator parameters effectively and proposes a multi-indicator evaluation model. Through the model, the paper comparatively analyzes the present status and development course of coordinated industrial development of typical urban agglomerations (Beijing–Tianjin–Hebei urban agglomeration, the Yangtze River Delta urban agglomeration, and the Pearl River Delta urban agglomeration) in China. The results show that Beijing–Tianjin–Hebei urban agglomeration has the clearest division of industries, but its industrial spillover effect is limited, the industrial structure of small and medium cities is too simple, and the economic gap among cities narrows at a very slow rate. The core cities in the Yangtze River Delta urban agglomeration exert certain driving effect upon the economy of their surrounding areas. However, they hardly give full play to their comparative advantages due to a low level of regional integration and high industrial similarity among cities. Compared with the above two urban agglomerations, the Pearl River Delta urban agglomeration enjoys more reasonable division of industries among cities, significant driving effect of core cities, and higher level of coordinated industrial development as driven by the market economy.

A Comprehensive ExxPost Assessment of the Italian RES Policy: Deployment, Jobs, Value Added and Import Leakages

A massive deployment of renewable electricity generation took place in Italy in less than eight years. A generous feed-in tariff, coupled with favourable institutional conditions, allowed the installation of more than 28 GW of PV, wind and other RES technologies. By 2014, Italy has already attained its 2020 goals on RES production. Besides, environmental objectives and compliance with EU targets, the policy was aimed at promoting green jobs and industrial production of RES technologies. Exante economic analyses advocated considerable economic and industrial spill-overs from the introduction of RES support policies. Despite official rhetoric and ex-ante studies about jobs and economic growth associated to RES adoption, at scholarly level there is no consensus on the actual effects and implications of these policies on National economies. This paper provides a first comprehensive ex-post analysis of the Italian case, filling an important gap. Our analysis is carried out with the development of a specific input-output model, with refined technological vectors and with the internalization of trade coefficients. We show that the effects have been unequivocally lower than expected; that most of the jobs created belonged to the service sector and not to the industrial sector and that the value added was much lower than expected due to significant export leakages.

Quantifying technology–industry spillover effects based on patent citation network analysis of unmanned aerial vehicle (UAV)

Unmanned aerial vehicle (UAV) technologies have been fast developing over the past 20years and are expected to generate extensive spillovers into other industry sectors. However, no previous studies have investigated such spillover effects. In this study, we propose the framework of two-mode network analysis to quantify the spillover effects of UAV technology into various industries using patent citation data of the United States Patent and Trademark Office. A two-mode matrix consists of rows corresponding to UAV technologies and columns corresponding to beneficiary industries, and the value depicts the spillover probability obtained using International Patent Classification codes and the technology/industry concordance table. The out- and in-degree centralities of the spillover network are used to identify strong spillover-generating UAV technologies and strong spillover-receiving industries, respectively. We observed that the weapon industry received extensive spillover effects during the period 2005–2009. Based on Mann–Kendall tests, the spillover effects of UAV-related software technologies exhibited a consistently upward trend during both the last 10 and 20years. The past significant trend of spillovers can help us to forecast future trends. The proposed quantification method can be readily applied to investigate other specific technology–industry spillover patterns.

How do analysts react to shareholder class action lawsuits?

This paper examines security analyst's earnings estimates and recommendations during the period around shareholder class action lawsuits. We find that analysts respond rapidly to the class action lawsuits. The magnitude of the forecast revisions is greater for smaller firms and for firms with large unexpected earnings surprises (SUE), high beta, and more negative three-day cumulative abnormal returns around the filing date. The speed of analyst response is directly related to firm size, SUE, beta, and share turnover, and is inversely related to the magnitude of the cumulative abnormal return for the three days around filing date. Finally, our results show that analysts utilize an industry spillover effect when estimating earnings for other related firms in the same industry.

Geographical and industrial spillovers in entry decisions across export markets

This article addresses sequential entry decisions in export markets. It focuses on externalities derived from previous export activity in countries close to those for which a potential entry decision is made (geographical spillovers) and externalities derived from previous presence of other firms in the same industry (industrial spillovers). The empirical analysis uses Spanish microdata for the period 2000–2010 in a firm decision model that also integrates country and industry characteristics. The results suggest that these two types of spillovers have a positive effect in explaining entry decisions in new export markets, though both are smaller in magnitude than the effects coming from previous presence in the same specific destination.

The role of innovation in inventory turnover performance

How a firm utilizes technological innovation to improve operations management is an important research question in today's knowledge economy but lacks empirical evidence in the literature. We use a dataset of all non-service U.S. public firms from 1976 to 2005 to examine how a firm's innovation performance is associated with its inventory turnover performance. In particular, we measure a firm's innovation performance by the ratio of its patents (either citations or counts) to its research and development (R&D) expenditure. Our fixed-effect panel regression results indicate a positive relation between innovation performance and inventory turnover ratio, and such a relation varies across industries. By differentiating process and product innovation according to patent usages, we find that process innovation has a consistent and long-lasting effect, whereas product innovation has an immediate but short-lasting effect. We also find supporting evidence for industry spillovers by showing that firms in a more innovative industry are likely to better manage their inventory performance. Our results confirm the benefit of using innovation in logistics and operations management and point to the strategic importance of integrating technology and operations management.

Foreign direct investment industry characteristics and spillovers

Purpose– The purpose of this paper is to develop a double mechanism model to separate two foreign direct investment (FDI) intra-industry spillovers mechanisms: spillovers by FDI intensity and by FDI efficiency. This paper seeks to illustrate the potential use of the double mechanism model rather than provide precise estimates of spillovers. The evidence on the links between technology and the nature, size and mechanisms of FDI spillovers effects in economically developing countries is mixed.Design/methodology/approach– A model is developed and tested, in principle. Empirical testing was conducted in two steps. In the first step, the authors examined the effect of each influencing factor to FDI spillovers separately. To complete this step, the authors divided the whole sample industry into sub-groups and tested them with the double-mechanism using ordinary least squares regression. This study applies Chinese National Bureau of Statistics manufacturing industry level data, for the years 2000, 2001 and 2002, including the food industry, beverage industry, textile industry, textiles and garments, chemicals and chemical products industry, overall manufacturing equipment, special equipment, computer and other electronic equipment manufacturing industries.Findings– The analysis suggests significant differences between types of spillovers: export orientation of domestic firms mainly influences FDI spillovers by intensity; the capability gap between local and foreign firms influences spillovers by efficiency; and the growth of local firms influences both types of spillovers. This paper develops existing models of FDI and suggests that disaggregating spillovers types may provide important theoretical and policy insights.Originality/value– This study has found, first, that compared with the classic single mechanism model, the double mechanism model is more appropriate for testing FDI intra-industry spillovers, as it is able to separate spillovers by intensity and spillovers by efficiency, which are shown as two distinct mechanisms for FDI spillovers. This allows a deeper analysis into each mechanism and the identification of relevant influencing factors.

Going abroad on regional shoulders: the role of spillovers on the composition of regional exports

In this paper we examine the existence of destination, industry, and generic export spillovers at the regional level. The empirical analysis is conducted by examining data on export activity of one hundred three Italian NUTS 3 regions, the ten industries with the highest export values in the period 2004-2008, and the fifteen main countries of destination of Italy’s exports. In particular we analyse the decision of export and subsequent flow of trade and we aim to identify the source and quantify the effect of spillovers generated at the regional level by means of a selection-bias corrected panel data model. In order to control for the different territorial effects, three models are estimated. The first one uses all the observations in the period, the second one is estimated using only the regions located in the north-centre of Italy, and the last one is estimated considering the data from the south of Italy. With the inclusion of controls, results show a distinct effect of export industry, destination, and generic spillovers both on the intensive and extensive margins of trade. Spillovers at the start of export activity are stronger when specific by product while are stronger generically when analysing the export flow.

Transport Infrastructure Investment and Interindustry Spillovers: The Effects on the Cost Structure of Australian Industries

This paper examines the impact of the provision of public transport infrastructure on the cost structure of the Australian economy within a context that recognises industry agglomeration externalities. The paper extends the symmetric generalised quadratic cost function by incorporating public transportation capital as an external input and adapting the spatial econometric techniques to an industrial context to allow for industry spillovers in the cost analysis. Using industry level data over the period 1990-2010, the paper finds that while public transport has a productive effect in reducing the cost of production, neglecting inter-industry spillovers has noticeably overestimates this effect.