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on Law and Economics |
| By: | Panagiota Papadimitri (Portsmouth Business School); Ansgar Wohlschlegel (Portsmouth Business School) |
| Abstract: | We explore protection against enforcement as a motive for lobbying and present evidence for bank holding companies with good corporate governance but a poorly performing portfolio of subsidiaries to be more likely to lobby. A simple theoretical model of lobbying as a means for banks to communicate otherwise private information on their quality rationalizes regulators' responsiveness to lobbying, even though lobbying banks inadvertently expose themselves as violators of the regulation. Using a composite governance indicator as a proxy for a bank's quality, we take the hypotheses from the model to a panel dataset of 173 large bank holding companies and their subsidiaries. In line with the theoretical hypotheses, we find that subsidiaries of lobbying, high-governance parent companies are less likely to receive a regulatory enforcement action, but the reverse is true for poor-governance parent companies. Furthermore, banks whose parent companies have lobbied perform better (worse) after five years if the bank holding has a high (low) governance indicator. On a policy note, our paper highlights a potential benefit of the lobbying system and makes the case for carefully designed incentives and commitment powers of bank regulators in order to make the most of this benefit. |
| Keywords: | Lobbying, enforcement, bank regulation, corporate governance |
| JEL: | D72 G28 G34 K42 |
| Date: | 2019–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2019-08&r=all |
| By: | Andreeva, Andriyana; Yolova, Galina |
| Abstract: | The paper examines the specifics and system of regulation of the administrative penal liability under the Labour Migration and Labour Mobility Act (LMLMA). In the context of the peculiarities and essence of the subject matter of this special law, we have analysed the basic administrative offences and the penalties provided for them, as well as the corresponding competence of the control bodies. The authors have drawn conclusions and highlighted tendencies in the control and realisation of legal liability under the legislation, and have set forth basic recommendations for improving the legal provisions and clarifying the described offences. |
| Keywords: | occupational migration, labour mobility, administrative penal liability, provision of labour by foreigners, violations of LMLMA |
| JEL: | K31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95253&r=all |
| By: | Carlo Capuano (Università di Napoli Federico II); Iacopo Grassi (Università di Napoli Federico II); Riccardo Martina (Università di Napoli Federico II and CSEF) |
| Abstract: | In a context of imperfect patent protection, this paper analyses the strategic use of patents from a novel perspective; patents are seen as a means available to the incumbent firm to control entry and, more importantly, to influence the post-entry market interaction process effectively, by creating the conditions that favour collusion. The level of patent protection chosen by the incumbent affects the likelihood that a potential entrant will be found guilty of patent infringement. This mechanism can operate as a punishment device that eases the conditions for collusion sustainability. Therefore, in a sense, patent protection can be regarded as an instrument allowing replication of the monopoly outcome in the context of a contestable market. |
| Keywords: | patents, patent portfolio, litigation, collusion, foreclosing, entry game |
| JEL: | D43 K21 L13 |
| Date: | 2019–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:537&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Christelle Meniago (Sol Plaatje University, South Africa) |
| Abstract: | This study examines the persistence of software piracy with internet penetration vis-Ã -vis of PC users, conditional on Intellectual Property Rights (IPRs) institutions. The empirical evidence is based on a panel of 99 countries for the period 1994-2010 and the Generalised Method of Moments. The main finding is that, compared to internet penetration, PC usage is more responsible for the persistence of global software piracy. Knowing how technology affects the persistence of piracy is important because it enables more targeted policy initiatives. We show that the sensitivity of software piracy to IPRs mechanisms is contingent on the specific technology channels through which the pirated software is consumed. |
| Keywords: | Piracy; Business Software; Software piracy; Intellectual Property Rights |
| JEL: | F42 K42 O34 O38 O57 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/041&r=all |
| By: | Blake Rayfield; Omer Unsal |
| Abstract: | In this study, we investigate how institutional investors help mitigate business-related risks in a corporate environment. Using a large sample of employment disputes, litigations, and court cases, we find that institutional investors play a significant role in reducing employment litigation. We observe that firms with larger shares of institutional ownership have a lower incidence of employment lawsuits and that long-term institutional investors are more effective at decreasing employee mistreatment. Our results suggest that institutional investors can improve the employee work environment and help mitigate future employee litigation. The improvement of employee work conditions has been shown to increase a firm’s value through increased employee output, reduced litigation, and direct and indirect costs. Our results shed light on the effectiveness of institutional monitoring on a firm’s litigation risk. |
| Keywords: | Institutional Investors; Litigation; Labor Relations; Firm Value |
| JEL: | G30 G39 G23 K40 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nfi:nfiwps:2019-wp-02&r=all |
| By: | Mateo Dulce Rubio |
| Abstract: | I use residential burglary data from Bogota, Colombia, to fit an agent-based modelfollowing truncated Lévy flights (Pan et al., 2018) elucidating criminal rational behaviorand validating repeat/near-repeat victimization and broken windows effects. The estimatedparameters suggest that if an average house or its neighbors have never been attacked,and it is suddenly burglarized, the probability of a new attack the next day increases, dueto the crime event, in 79 percentage points. Moreover, the following day its neighborswill also face an increment in the probability of crime of 79 percentage points. This effectpersists for a long time span. The model presents an area under the Cumulative AccuracyProfile (CAP) curve, of 0.8 performing similarly or better than state-of-the-art crimeprediction models. Public policies seeking to reduce criminal activity and its negativeconsequences must take into account these mechanisms and the self-exciting nature ofcrime to effectively make criminal hotspots safer |
| Keywords: | Criminal behavior, Crime prediction model, Machine learning, Agent-basedmodel |
| JEL: | K42 H39 C53 C63 |
| Date: | 2019–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:col:000508:017347&r=all |
| By: | Guilherme Mendes de Paiva, Luiz; de Oliveira Carlos, Juliana |
| Abstract: | This paper reviews some of the main research on drug law enforcement in Brazil since the 2006 Drug Law came into force, noting a clear and constant pattern of police and judicial focus directed at retail drug trafficking, decisively impacting current incarceration rates. It then examines the lack of understanding of the actual functioning of illicit drug markets by the criminal justice system, leading to judicial decisions not only ineffective for its declared purposes, but also counterproductive in terms of controlling illicit economies. |
| Keywords: | illicit economies; criminal justice system; prisons; illicit drug markets; sentencing |
| JEL: | N0 L81 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:101205&r=all |
| By: | Vesla M Weaver (Johns Hopkins University); Amanda Geller (New York University) |
| Abstract: | The standard account of policy feedback scholarship centers on self-reinforcing dynamics of social policies: the provision of resources not only promotes economic security and well being, it also enables the individuals and communities directly affected by the policies to engage more constructively with state actors. Criminal justice policies have typically had the opposite effect: they embolden those with interests in a punitive policy agenda, while disempowering those most affected by the policies.This is of particular concern for children and adolescents, whose first encounters with state actors often come through police contact, and carry adverse social and political consequences at a critical developmental stage. In this article we reimagine youth engagement with the state, not only by substantially reducing police surveillance of young people, but by promoting youth attachment to civic life. We call for an investment in institutions, both state-based and community-based, that reinforce citizenship and civic health. |
| Keywords: | policing, criminal justice, youth, civic engagement, policy feedbacks, community-building, race-class subjugation |
| JEL: | D63 K14 K42 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:pri:crcwel:wp19-08-ff&r=all |
| By: | Bratti, Massimiliano; Conti, Maurizio; Sulis, Giovanni |
| Abstract: | In 2012 a labour market reform, known as Fornero Law, substantially reduced firing restrictions for firms with more than 15 employees in Italy. The results from a difference in regression discontinuities design that compares firms below versus those above the cut-off before and after the reform demonstrate that, after the Fornero Law, the number of trained workers increased in firms just above the threshold, with an order of magnitude of approximately 1.5 additional workers in our preferred empirical specification. We show that this effect might be partly explained by the reduction in worker turnover and a lower use of temporary contracts at the threshold after the reform. Our study highlights the counter-intuitive and potentially adverse effects of employment protection legislation (EPL) on training in dual labour markets due to larger firms seeking to avoid the higher costs of EPL by means of temporary contracts. |
| Keywords: | employment protection legislation,training,dual labour markets,temporary contracts,Italy |
| JEL: | J42 J63 J65 M53 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:368&r=all |
| By: | Gaessler, Fabian (MPI-IC Munich); Hall, Bronwyn H. (MPI-IC Munich); Harhoff, Dietmar (MPI-IC Munich) |
| Abstract: | A \"patent box\" is a term for the application of a lower corporate tax rate to the income derived from the ownership of patents. This tax subsidy instrument has been introduced in a number of countries since 2000. Using comprehensive data on patents filed at the European Patent Office, including information on ownership transfers pre- and post-grant, we investigate the impact of the introduction of a patent box on international patent transfers, on the choice of ownership location, and on invention in the relevant country. We find that the impact on transfers is small but present, especially when the tax instrument contains a development condition and for high value patents (those most likely to have generated income), but that invention itself is not affected. This calls into question whether the patent box is an effective instrument for encouraging innovation in a country, rather than simply facilitating the shifting of corporate income to low tax jurisdictions. |
| Keywords: | patent box; ip box; innovation tax; beps; epo; invention incentive; patent ownership; |
| JEL: | H32 K34 O34 |
| Date: | 2019–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:177&r=all |
| By: | Amanda Geller (New York University); Ellis Monk (Harvard University) |
| Abstract: | Contemporary urban youth are heavily policed, many as early as preadolescence. This policing is characterized by significant racial disparities,with black teens reporting more,and more intrusive experiences. Along history, and growing literature, suggests that police encounters may vary not only by race, but by complexion.We examine skin tone disparities in police contact among a population-based sample of over 1,000 teens from the Fragile Families and Child Wellbeing Study. We observe a robust “light skin privilege†in which light-skinned adolescents are less likely than others to report contact with the police, and report lower levels of police intrusion. Significant skin tone differences in the probability of reporting stops were also observed within the subsample of black teens (N=504). Differences within the smaller subsample of Hispanic teens were of similar magnitude but statistically insignificant. For both black and Hispanic teens, within-race skin tone differences in stop intrusion were suggestive of a light skin privilege, but statistically significant. |
| JEL: | D63 K14 K42 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:pri:crcwel:wp19-07-ff&r=all |
| By: | Moreno Ruiz, Diego; Lemus Torres, Ana Belén |
| Abstract: | The Arm's Length Principle (ALP) has been broadly adopted by OECD countries to avoid the use of firms' internal transfer pricing as a device for shifting profits into low tax jurisdictions. While the ALP does not affect market outcomes under perfect competition, we show that under imperfect competition its adoption is non-neutral: a strict (lax) application of the ALP softens competition among subsidiaries (parents). Thus, under imperfect competition regulating transfer pricing optimally requires trading off its impact on market outcomes and tax revenue. |
| Keywords: | Vertical Separation; Imperfect Competition; Arm'S Length Principle; Transfer Pricing Regulation |
| JEL: | H26 L51 L13 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:28640&r=all |
| By: | Gaessler, Fabian (MPI-IC Munich); Wagner, Stefan (ESMT Berlin) |
| Abstract: | Pharmaceutical firms typically enjoy market exclusivity for new drugs from concurrent protection of the underlying invention (through patents) and the clinical trials data submitted for market approval (through data exclusivity). Patent invalidation during drug development renders data exclusivity the sole source of protection and shifts the period of market exclusivity at the project level. In instrumental variables regressions we quantify the effect of a one-year reduction in expected market exclusivity on the likelihood of drug commercialization. The effect is largely driven by patent invalidations early in the drug development process and by the responses of large originators. We hereby provide first estimates of the responsiveness of R&D investments to market exclusivity expectations. |
| Keywords: | patents; drugs; data exclusivity; clinical trials; |
| JEL: | K41 L24 L65 O31 O32 O34 |
| Date: | 2019–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:176&r=all |
| By: | Gaetano Lisi (University of Cassino) |
| Abstract: | Many empirical works confirmed the capacity of the "slippery slope" framework and tax morale in explaining tax compliance. So far, however, very few studies tried to fully integrate these two main behavioral approaches to understanding tax compliance. Indeed, a theoretical underpinning is still missing. In this paper, therefore, we first introduce tax morale and the “slippery slope” framework into an economic model of taxpayer’s behavior and then we test it empirically. We find that for increasing overall tax compliance, voluntary tax compliance (trust and tax morale) is more effective than enforced tax compliance. Eventually, from a policy point of view, we suggest a strategy based on rewards for honest taxpayers. |
| Keywords: | tax compliance, tax evasion, voluntary tax compliance, tax morale, enforced tax compliance |
| JEL: | H26 H3 K42 D22 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:dbe:wpaper:0219&r=all |
| By: | Callahan, Scott; Bruner, David; Giguere, Christopher S. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea19:290927&r=all |
| By: | Shuai Chen (Luxembourg Institute of Socio-Economic Research); Jan C. van Ours (Erasmus University Rotterdam) |
| Abstract: | We study the effect of marriage on the stability of formal partnerships exploiting same-sex marriage legalization in the Netherlands as a natural experiment. Same-sex marriage legalization allowed registered partnerships to be transformed into marriage. Since registered partnerships and marriages are similar in terms of rights and obligations we can investigate the effect of marital symbolism on the partnership stability. Using rich administrative data, we find that same-sex marriage legalization had two different effects. First, it increased the separation rate of existing same-sex registered partnerships. Second, partnerships that were transformed into marriage had a substantially lower separation rate. We take the second finding as evidence of the symbolic effect of marriage stabilizing partnerships. |
| Keywords: | Same-sex marriage, registered partnership, separation, duration analysis |
| JEL: | K36 J12 J16 J15 |
| Date: | 2019–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190055&r=all |
| By: | Luana F. J. Swensson (IPC-IG) |
| Abstract: | "In the past few years, various countries, regions and cities from low-income to high-income economies have been developing a range of food procurement initiatives designed to use the regular demand for food on the part of government entities as a policy instrument targeting broader development objectives". (...) |
| Keywords: | Aligning, policy, legal, framework, supporting, smallholder, farming, through, public, food, procurement, case, home-grown, school, feeding, programmes |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:177&r=all |