|
on Law and Economics |
| By: | Astrid Gamba (University of Milan-Bicocca, Department of Economics); Giovanni Immordino (Università di Napoli Federico II and CSEF); Salvatore Piccolo (Catholic University of Milan, Department of Economics and Finance and CS) |
| Abstract: | When Legislators award amnesties to “low-rank” criminals cooperating with the justice, top criminals may react by capturing public officials to subvert the law and avoid being sanctioned. Policies that optimally deter crime should anticipate this danger and fight it back by granting amnesties not only to low-rank criminals, but also to officials who plea guilty and report bribe- givers. Indeed, even if the threat of being betrayed by their fellows may induce top criminals to bribe prosecutors, these policies boost the conviction risk not only for top criminals but also for low-rank ones, whereby increasing the risk premium that the latter require to participate in the crime. This higher risk premium increases the reservation wage that top criminals need to pay in order to recruit soldiers, and hence reduces the crime profitability: the bright side of subversion of law. |
| Keywords: | Criminal Organizations, Corruption, Leniency, Subversion of Law. |
| JEL: | K14 K42 D73 D78 |
| Date: | 2016–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:446&r=law |
| By: | Chatain, Olivier; Meyer-Doyle, Philipp |
| Abstract: | Research summary We examine how human-capital-intensive firms deploy their human assets and how firm-specific human capital interacts with incentives to influence this deployment. Our empirical context is the UK M&A legal market, where micro-data enable us to observe the allocation of lawyers to M&A mandates under different incentive regimes. We find that law firms actively equalize the workload among their lawyers to seek efficiency gains while ‘stretching’ lawyers with high firmspecific capital to a greater extent. However, lawyers with high firm-specific capital also appear to influence the staffing process in their favor, leading to unbalanced allocations and less sharing of projects and clients. Paradoxically, law firms may adopt a seniority-based rent-sharing system that weakens individual incentives to mitigate the impact of incentive conflicts on resource deployment. Managerial summary The study highlights the dilemmas when professional service firms allocate their key individuals to incoming projects and the role that monetary incentives play in aggravating or alleviating these dilemmas. In the context of UK M&A law firms we find that partners have a tendency to be attached to too many projects and not to share enough work, which is exacerbated when individual monetary incentives are stronger. Firms adopting a seniority based incentive system (lockstep system) are able to alleviate this effect. This implies that there is a tradeoff between rewarding personal performance versus balancing workloads and fostering collaboration among professionals. |
| Keywords: | Human-Capital-Intensive Firms; Human Capital; Managerial Dilemmas; Incentives; Capabilities; Micro-foundations; Mergers and Acquisitions; Law firms |
| Date: | 2015–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1120&r=law |
| By: | Ashley Hirashima (University of Hawaii Economic Research Organization (UHERO) and Department of Economics) |
| Abstract: | This paper seeks to investigate the effects of Ban-the-Box laws across the United States. Ban-the-Box laws make it illegal to ask whether an applicant has been convicted of a crime on a job application. The effects are consistent with that of statistical discrimination where the policy is having adverse effects on individuals labor market outcomes. I find that without perfect information about an individual's criminal history, firms base their perceived productivity of a potential applicant on an expected relationship between race and criminality. This results in negative effects on labor market outcomes for all individuals, especially for black males, who are particularly vulnerable. |
| Keywords: | Labor discrimination; Public Policy; Labor Demand |
| JEL: | J23 J38 J71 J78 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201606&r=law |
| By: | Riccardo Ferretti (Department of Communication and Economics, and Cefin (Centro Studi Banca e Finanza), University of Modena and Reggio Emilia, Italy); Pierpaolo Pattitoni (University of Bologna, Italy; The Rimini Centre for Economic Analysis, Italy); Roberto Patuelli (University of Bologna, Italy; The Rimini Centre for Economic Analysis, Italy) |
| Abstract: | This study analyzes the effectiveness of the Market Abuse Directive (MAD) in reducing possible profits from insider trading during voluntary tender offers with the purpose of delisting initiated by controlling shareholders. Exploiting the quasi-experimental setting provided by the introduction of the MAD, our event-study analysis on the Italian market suggests that the new regulation did not produce appreciable effects on the magnitude of abnormal returns and volumes noted before the announcement of a tender offer. Multivariate econometric analyses based on regression and matching methods confirm this result. However, poolability tests reveal that the MAD has changed the manner in which corporate characteristics influence the capacity of insiders to make profit. We interpret our results considering the choice problem of the optimal amount of insider trading, when comparing the marginal costs and benefits of the illegal activity. |
| Keywords: | Market Abuse Directive, Tender offer, Delisting, Event study |
| JEL: | K2 K4 G34 G14 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:16-16&r=law |
| By: | Daniel Rais |
| Abstract: | SECO Working Paper 6/2015 |
| Date: | 2015–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:903&r=law |
| By: | Daniel Rais |
| Abstract: | SECO Working Paper 15/2014 by Yovana Reyes Tagle, PUCP |
| Date: | 2014–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:944&r=law |
| By: | Kayis-Kumar, Ann |
| Abstract: | One of the most significant trends in the evolution of global tax systems has been the rise from relative obscurity of thin capitalisation rules, which are perceived as anti-avoidance rules which limit tax base erosion from cross-border interest deductions. However, over the same timeframe, innovations to financial instruments have challenged the traditional financial and legal distinctions between debt and equity, which in the cross-border setting has exposed the prevalence of economic inefficiencies in the design of the international tax system. This paper approaches the issue of thin capitalisation from a novel perspective by conceptualising the cross-border debt bias as the ‘disease’ and thin capitalisation as merely the ‘symptom’. Despite their prevalence, it is unclear whether thin capitalisation rules: (1) attain tax neutrality (specifically, do these rules mitigate the debt bias); (2) are effective in both theory and practice. This provides the basis to examine whether a cross-border manifestation of a fundamental reform could eliminate the need for existing thin capitalisation rules, which are presently a second-best solution to the tax-induced cross-border debt bias. Accordingly, this paper: (1) considers reforms traditionally designed to address the domestic debt bias; specifically, the allowance for corporate equity (ACE), comprehensive business income tax (CBIT), combined ACE-CBIT and allowance for corporate capital; (2) examines the literature and implementation experience of the ACE, the only one of these fundamental reforms which has been experimented with in practice, to consider whether it is effective in both theory and practice; (3) presents the possibility of extending the combined ACE-CBIT to the cross-border context as an alternative to thin capitalisation rules. |
| Keywords: | International tax law, Tax policy, Public economics, Thin capitalisation rules, Corporate taxation, Multinational debt shifting, Debt bias, Allowance for corporate equity, Economic rent tax |
| JEL: | F3 G3 K0 K00 K33 K34 |
| Date: | 2015–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72031&r=law |
| By: | Pavlova, N.S. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Baulina, A.A. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shastitko, Andrey E. (Russian Presidential Academy of National Economy and Public Administration (RANEPA)) |
| Abstract: | The paper analyzes the issue of the integration of environmental factors in the assessment of agreements on co-operation between competitors in terms of the admissibility of the antimonopoly legislation. The existing institutional environment determines how the different characteristics of different types of environmental externalities affect the possibility of taking them into account, and, ultimately, on their role in deciding on the admissibility of the cooperation agreements. As a result, the positive externalities that have the properties of public goods can be provided into account only to a limited extent, which may lead to type I error when making the antimonopoly authority on the admissibility of horizontal agreements decisions. |
| Keywords: | environmental factors, assessment of agreements, antimonopoly legislation |
| Date: | 2016–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:452&r=law |
| By: | Uriel Procaccia; Eyal Winter |
| Abstract: | Corporate entities enjoy legal subjectivity in a variety of forms, but they are not human beings. This paper explores, from a normative point of view, one of the limits that ought to be imposed on the capacity of corporations to be treated "as if" they had a human nature, their recognition as legitimate bearers of basic human rights. The assertion that corporations, like living persons, are entitled to constitutional protection was famously brought to the fore by a number of recent Supreme Court cases, most notably the Citizens United and the Hobby Lobby cases. In the rational choice analysis that follows this paper concludes that the new jurisprudence emanating from Citizens United may be justified in the relatively insignificant cases of small companies with egalitarian distribution of shares, but ought to be rejected in the more meaningful cases of large public corporations with controlling stockholders. Hobby Lobby, on the other hand, presents a more nuanced dilemma and has some normative advantages that are not apparent in situations resembling Citizens United. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp698&r=law |
| By: | Jiri Schwarz (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic; Czech National Bank, Na Prikope 28, 115 03 Prague 1, Czech Republic); Martin Stepanek (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | This paper utilizes a data set of over 208,000 U.S. patents applied for between 1975 and 2010 to study development of strategic patenting over time and across industries. With received citations as a measure of patent social value, we use data envelopment analysis to estimate firm-level relative importance of strategic versus protective patenting. Our novel identification strategy reveals there was an almost universal drop in patent social value in the second half of the 1990s, signaling a shift towards the strategic use of patents. But the development of patenting strategies continued even after 2000 with semiconductor companies increasing their focus on patent value relative to companies from other industries. On average, aerospace and software companies preferred the production of valuable patents, but patenting strategies can differ vastly even among companies operating within one industry. The results confirm our expectations regarding the focus of aerospace companies on socially valuable patents. |
| Keywords: | Patents, patent value, strategic patenting, intellectual property rights |
| JEL: | D23 K11 O32 O34 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2016_08&r=law |
| By: | Alemanno, Alberto |
| Abstract: | Beyond Networks critically dissects and systematizes an insightful, well-researched and elegantly written account of the democratic potential carried out by coalitions of civil society actors. Once established a case for studying coalitions of civil society organization through the lens of Global Administrative Law, the book eventually unveils its underlying research question. This volume specifically attempts to explain how civil society networks – which are studied within the broader notion of Global Civil Society (GSC) – drive the development of principles of democratic value at the supranational level. It does so within the broader debate about new modes of global governance and in particular that of experimentalist governance. It proceeds to theorize an autonomous organization network model within GSC: the so-called 'interlocutory coalitions'. Those coalitions are typically made of diverse category of entities whose major – sometimes solely – common feature is the cross-border pursuit of a common cause. In order to build an original and valuable taxonomy of civil society networks, interlocutory coalitions must be contrasted to other forms of networks, including social networks, trans-governmental committees, think tanks, Parallel Summits and QUANGOs. After reconstructing their respective composition, membership, rules of governance and legal status, the book delves into interlocutory coalitions' decision-making. How do coalitions presenting high degree of variation when it comes to their mission, governance, funding and membership coalesce around one common cause? How do they come to existence and get along? How can such coalitions speak with one voice when representing and advocating their common position in front of the relevant international organizations? What kind of techniques and deliberative mechanisms are used to attain a common position and then convey it to the outside world? This book provides a rigorous, constructive and promising stepping stone to embark on such a challenging journey. Yet the case for a global participatory democracy remains to be made. |
| Keywords: | Open government; Transparency; Participation; Civic empowerment; Coalitions; Legitimacy; Accountability; Civil society; European Union; Good governance |
| JEL: | K19 K33 |
| Date: | 2016–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1138&r=law |