 Are strong neighbors good neighbors? “Doing business” spatial spillover effects and policy learningShujian Guo, Zhiduan Xu and Yilong Ruanzhou Journal of International Money and Finance, 2025, vol. 158, issue C Abstract: In this paper, we introduce a novel econometric framework to investigate the producers and recipients of the spillover effect. We find that proximity to neighboring economies with pro-business policies is associated with improvements in a domestic economy’s business environment. This positive spatial spillover is predominantly generated by high-income economies, while low-income economies exhibit negligible impact on their neighbors. Furthermore, non-African low-income economies benefit more from their neighbors’ business reforms compared to high-income ones. Our analysis also reveals that the magnitude of the spillover effect is moderated by the physical adjacency (land or maritime borders) and political alignment between neighbors. Only high-income economies demonstrate the ability to translate an enhanced business environment into superior economic outcomes. We highlight the importance of business connections between neighboring economies. Keywords: Spatial Econometrics; Economic Geography; Institutional Environment; Business Environment Spillover (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:158:y:2025:i:c:s0261560625001524 DOI: 10.1016/j.jimonfin.2025.103417 Access Statistics for this article Journal of International Money and Finance is currently edited by J. R. Lothian More articles in Journal of International Money and Finance from Elsevier |
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