Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

A common concern with efforts to directly help some small businesses to grow is that their growth comes at the expense of their unassisted competitors. This study tests this possibility using a two-stage randomized experiment in Kenya. The experiment randomizes business training at the market level, and then within markets to selected businesses. Three years after training, the treated businesses are selling more, earn higher profits, and their owners have higher well-being. There is no evidence of negative spillovers on the competing businesses, and the markets as a whole appear to have grown in terms of number of customers and sales volumes. This market growth appears to come from enhanced customer service and new product introduction, generating more customers and more sales from existing customers. As a result, business growth in underdeveloped markets is possible without taking sales away from nontreated businesses.

Business Training --- Market Development --- Microenterprise --- Spillovers

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper assesses two research questions: has the presence of foreign firms contributed to productivity increases in Turkey, and how could Turkey increase foreign direct investment inflows? First, the analysis applies dynamic regressions in differences over an AMADEUS firm-level data set. Similar to the results for other emerging countries, Turkish firms that received foreign direct investment will see an increase in productivity after the fourth year. The paper finds evidence of negative but small competition spillovers over domestic firms in the same sector of the multinational, as well as positive and large knowledge spillovers to domestic firms in broader two-digit sectors. This finding constitutes a case for foreign direct investment attraction policies in Turkey. Second, based on the findings of the cross-country regressions, the paper argues that Turkey could increase its attractiveness to foreign investors by strengthening institutional quality, in particular the rule of law, and mitigating exchange rate volatility.

Determinants of FDI --- Foreign Direct Investment --- Knowledge Spillovers

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The diffusion of knowledge plays a central role in endogenous growth theories. Simply put, in these models new knowledge can be generated from preexisting knowledge. In other words, existing knowledge is a pure public good, which can benefit any economic agent anywhere. More generally, endogenous growth theories rely on a broad set of assumptions that have not been tested sufficiently, especially for developing economies. The scope and nature of knowledge spillovers is, however, important for policy, because the presumed positive spillovers can justify government intervention (if the spillovers are localized) or laissez faire (if the spillovers are international). This paper empirically assesses the scope and direction of knowledge spillovers in national patenting and, separately, product innovation by firms. The first set of exercises tests whether the cumulative knowledge specifications of the knowledge production function can explain international patterns of patenting or whether own research and development is necessary to produce patents. The second set of exercises analyzes whether firm product-quality upgrading and the introduction of new products depend on product innovation within industries, within or across countries. The evidence supports the view that existing stocks of knowledge, domestic and foreign, enhance national innovation and entrepreneurship in the form of product innovation. More specifically, the evidence suggests that within-country and international knowledge spillovers are positive, but international spillovers can be negative for firms that are far from innovative firms in terms of productivity. The results depend on the concept of "distance" between countries and firms.

Endogenous Growth --- Industry --- Macroeconomics and Economic Growth --- Patent Production Function --- Product Innovation --- Spillovers

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper analyzes the spillover effects of U.S. monetary policy announcements on emerging market economies since end-2008, the period coinciding with the use of unconventional policy measures. Monetary policy surprises are measured by changes in two-year Treasury yields in short windows of time around the Federal Reserve Board's policy announcements. The analysis finds that U.S. monetary policy surprises have a significant impact on emerging economies' exchange rates, equity prices, and bond yields. The impact is larger for surprise tightening of policy than for surprise easing. The impact is disproportionately larger for large surprises, implying that emerging markets are relatively insulated from anticipated policy announcements. The spillover effects of policy announcements of other advanced economies, such as the euro area, Japan, and United Kingdom, are found to be much weaker than those of the United States.

Asset Prices --- Emerging Markets --- Federal Open Market Committee --- Fomc --- International Spillovers --- Monetary Policy

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper investigates whether the agglomeration of economic activity in regional clusters affects long-run manufacturing total factor productivity growth in an emerging market context. It explores a large firm-level panel dataset for Chile during a period characterized by high growth rates and rising regional income inequality (1992-2004). The findings are clear-cut. Locations with greater concentration of a particular sector did not experience faster growth in total factor productivity during this period. Rather, local sector diversity was associated with higher long-run growth in total factor productivity. However, there is no evidence that the diversity effect was driven by the local interaction with a set of suppliers and/or clients. The authors interpret this as evidence that agglomeration economies are driven by other factors, such as the sharing of access to specialized inputs not provided solely by a single sector, such as skills or financing.

Achieving Shared Growth --- Agglomeration Economies --- Economic Growth --- Economic Theory & Research --- International Economics & Trade --- Knowledge Spillovers --- Labor Policies --- Local Growth --- Political Economy --- Total Factor Productivity Growth --- Chile