R iver pollution represents a classic negative externality that spills across political boundaries. The source region generates emissions that pollute the river, but social costs are borne downstream. In cases ranging from Western Europe to China, empirical studies have documented significant free riding along interjurisdictional river boundaries (Cai, Chen, and Qing 2013;Sigman 2002Sigman , 2005and Sandler 2006). 1 Sigman (2002) compares pollution in domestic and international rivers. She finds that stations immediately upstream of international borders have higher levels of biochemical oxygen demand (BOD) than similar stations elsewhere. Gray and Shadbegian (2004) find that near the Canadian-United States border BOD discharges are higher and that fewer inspections take place. Using Toxic Release Inventory data from 1987to 1996, Helland and Whitford (2003 show that facilities' water emissions are higher in counties that border other states. Sigman (2005) finds that free riding gives rise to a 4 percent degradation of water quality downstream of authorized US states. Lipscomb and Mobarak (2013) exploit a Brazilian natural experiment in which county borders are redrawn frequently and consequently changes strategic polluting behavior around borders. They conclude that solutions to cross-boundary spillovers require active regulatory involvement by upper-level governmental officials.

Globalisation enables foreign liquidity to access local property markets. This paper depicts a strong connection between foreigners’ property acquisitions and regional housing price movements in Singapore. Testing structure breaks also illustrates a ripple effect of prices from the central city to suburbs. A structural vector autoregression incorporates these two observations. Impulse-response function and forecast-error variance decomposition show that central region’s foreign-liquidity shocks can greatly impact housing price growth in not only the central region but also the non-central region where foreign buyers are inactive. The ripple effect of prices plays an important role. Non-central region’s foreign-liquidity shocks, in contrast, have small effects on both regions. Impacts of foreign-liquidity shocks can reach the public-housing market, where foreigners’ participation is prohibited. The findings are useful to policy makers who consider regulations of foreign home buyers as an instrument to stabilise housing markets.

This article empirically tests the relationship between corporate real estate (CRE) holdings and productivity risks of firms. Using a large sample of public listed U.S. firms for the period from 1984 to 2011, we show that CRE ownership is significantly and negatively correlated with productivity risks of firms. Firms with high‐productivity risk own less CRE assets. When testing dynamic changes to CRE holdings, we estimate a significant and positive elasticity of CRE investments of 5.2% in response to cash flow shocks. If the adjustment cost is high, high‐risk firms are expected to hold less CRE assets, so that they could reduce potential losses associated with CRE holdings when negative productive shocks occur.