Spillovers

Spillover refers to the spread of effects from a source to areas, actors, or systems beyond the immediate origin. The term is used across disciplines to describe how actions, events, or phenomena in one context produce consequences elsewhere.

In economics, spillovers are externalities—costs or benefits not reflected in market prices. Positive spillovers include knowledge diffusion from research activities to neighboring firms or regions, while negative spillovers can involve pollution, congestion, or competition that harms others. Knowledge and technology spillovers are often cited in the analysis of innovation clusters and regional development.

In epidemiology and ecology, spillover describes transmission across species or ecological boundaries. Zoonotic spillovers occur when pathogens move from animals to humans, potentially triggering new diseases. Spillovers can also refer to ecological flows or disturbances that cross habitat or ecosystem boundaries.

In finance and macroeconomics, spillovers capture how shocks in one market or country propagate to others, affecting asset prices, volatility, or growth. Such contagion can be driven by trade linkages, financial interconnectedness, or shifts in expectations.

Mechanisms underlying spillovers include networks of trade and finance, travel and information flows, shared technologies, and geographic proximity. Policies, institutions, and regulatory coordination influence both the likelihood and magnitude of spillovers.

Measurement approaches encompass econometric spillover indices, network analysis, and models that trace transmission channels. Policy responses aim to internalize externalities or mitigate risks, through instruments like taxes or subsidies, cross-border regulation, investment in diffusion and surveillance, and international cooperation.

Examples include cross-border pollution, technology spillovers from clusters, and market contagion during crises. See also externality, contagion, cross-border pollution, knowledge spillover, zoonosis.