In recent years, debates over the social purpose of corporations have taken center stage amidst rising concern about externalities (such as those associated with climate change and harmful speech) generated by firms. A key motivation is claim that government regulation liability regimes appear not to be functioning sufficiently well force firms internalize these externalities. There thus intere...

We develop an empirical approach to examine static and dynamic knowledge externalities in the context of a regional total factor productivity relationship. Static externalties refer to current period scale or industry-size effects which have been labeled localization externalities or region-size effects known as agglomeration externalities. Dynamic externalities refer to the relationship betwee...

The identification of aggregate human-capital externalities is still not fully understood. The existing (Mincerian) approach confounds positive externalities with wage changes due to a downward sloping demand curve for human capital. As a result, the Mincerian approach yields positive externalities even when wages equal marginal social products. We propose an approach that identifies human-capi...

Abstract Governments are expected to tackle externalities such as pollution, epidemics and environmental catastrophes, but whether how governments themselves generate is a question equally important for exploring socially beneficial policies institutional reforms. The problem with defining government that governments, through regulation distribution, inevitably allocate costs benefits asymmetri...

Identification of the strength of human capital externalities at the aggregate level is still not fully understood. The existing method may yield positive or negative externalities even if wages reflect marginal social products. We propose an approach that yields positive average human capital externalities if and only if the marginal social product of workers with above-average human capital e...

We incorporate externalities into the stable matching theory of two-sided markets: We establish the existence of stable matchings provided that externalities are positive and agents’ choices satisfy substitutability, and we show that the standard insights of matching theory, such as the existence of side optimal stable matchings and the rural hospitals theorem, remain valid despite the presence...

Network externalities are playing an increasingly important role in the economy, and they have significant implications for firms' marketing strategies. The authors study the effects of network externalities in conjunction with other product and firm characteristics on the survival of pioneers. They apply an accelerated failure time model to data on 45 office products and consumer durables. The...

The architecture of social and economic networks is often explained in terms of the externalities shaping the link-forming incentives of players. We make two contributions to this literature. First, we bring into its ambit the linear-quadratic utility model. Since players’ utilities are now a function of their network centralities, this permits endogenizing their locational incentives in a netw...