GLOBAL ECONOMIC SANCTIONS, GLOBAL BANK LINKAGES AND INFORMATION ASYMMETRY: AN EVIDENCE FROM CROSS-COUNTRY DATA

This paper investigates the effects of global economic sanctions (GESs) on global bank linkages (GBLs) by using 4,032 pairs of 66 countries during the 2001–2013 period. We use the structural gravity model combining with the rich database of the Global Sanction Data Base introduced by Felbermayr et al. [(2020). The global sanctions data base. European Economic Review, 129, 1–23]. Our empirical results show a negative association between the GESs and GBLs. The differential effects of GESs on the GBLs are conditional on the sanction types. Furthermore, the consequences of global sanctions become more severe for countries featuring higher information asymmetries, captured either by a high level of world uncertainty, an occurrence of crisis and shocks or by a weak institutional system. Our results are robust and reliable when we use an alternative measure of bank connections, and in the context of controlling the potential endogeneity of global sanction.

R&D SPILLOVERS IN AN ENDOGENOUS GROWTH MODEL WITH PHYSICAL CAPITAL, HUMAN CAPITAL, AND VARIETIES

There is a family of models with physical and human capital and R&D for which convergence properties have been discussed [Lutz G. Arnold, European Economic Review 44, 1599–1605 (2000); Manuel Gómez, Studies in Nonlinear Dynamics and Econometrics 9(1), Article 5 (2005)]. However, spillovers in R&D have been ignored in this context. We introduce spillovers in this model and derive the steady-state and stability properties. This new feature implies that the model is characterized by a system of four differential equations. A unique balanced growth path, along with a two-dimensional stable manifold, is obtained under simple and reasonable conditions. Transition is oscillatory toward the steady state for plausible values of parameters. We discovered that these features are due to the presence of the R&D spillovers externality in the decentralized equilibrium.