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on Law and Economics |
| By: | Tania Babina; Simcha Barkai; Jessica Jeffers; Ezra Karger; Ekaterina Volkova |
| Abstract: | We hand-collect and standardize information describing all 3, 055 antitrust law suits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries. |
| Keywords: | antitrust enforcement, economic activity, employment, business formation |
| JEL: | L4 E24 K21 J21 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-50&r=law |
| By: | Kento NISUGI (Osaka School of International Public Policy, Osaka University) |
| Abstract: | Amidst the rising influence of State-owned enterprises and sovereign wealth funds, the eligibility of State-backed investors to claim standing as a claimant before an ICSID tribunal emerges as a significant point of contention. The established‘Broches test’suggests that State-ownership per se does not disqualify an entity from being a ‘national’ under Article 25 of the ICSID Convention. However, the ambiguities inherent in its content and legal authority have yielded varied interpretations. A newer perspective suggests relying on attribution standards reflected in the Articles on Responsibility of States for Internationally Wrongful Act (ARSIWA) for guidance. This article examines critically these prevalent approaches and obstacles to the transplantation of ARSIWA’s attribution rules to this specific context. Instead, it proposes a method for piercing the ‘national’ veil of State-backed investors in accordance with the general principle of law of abuse of legal personality and process. This proposed framework strikes a proper balance between safeguarding the integrity of the ICSID system and ensuring State-backed investors’ access to ICSID. Moreover, this article paves the way for future tribunals by drawing inspiration from the parallel practice of the European Court of Human Rights. |
| Keywords: | International investment law; Investor-State arbitration; ICSID; State-backed investors; Broches test; ARSIWA; Attribution; Piercing the veil |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:23e003&r=law |
| By: | Benito Arruñada |
| Abstract: | This chapter presents an analytical framework that draws upon the economics of personal and real rights, which helps in understanding the institutions of the Roman familia. The discussion proceeds in four stages. First, it outlines the central tenets of the theory, which regards the formalization of transactions as a critical, secondary, public “contractual” step for creating a tradable legal commodity, specifically robust property (real) rights that are enforceable in rem against everyone but do not increase transaction costs. Second, it applies the theory to the marriage contract, a fundamental component of family law. Third, the chapter examines some of the primary features of Roman personal contracting from this analytical perspective, particularly the standard transactions related to the Roman familia, which is better comprehended as a household than as a mere family. Lastly, it focuses on one of the main features of Roman family law: the dowry, explaining the tendency to enforce it as a right in rem. |
| Keywords: | economics of ancient law, economics of ancient societies, economic analysis of Roman law, Law and Economics, family law, dowry, Property rights, transaction costs, personal exchange, New Institutional Economics |
| JEL: | D1 D23 K11 K12 K36 L22 N13 O17 P48 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1407&r=law |
| By: | Alessandro Melcarne (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Benjamin Monnery (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - École Centrale de Nantes - Nantes Univ - Nantes Université) |
| Abstract: | While there is widespread evidence that sentences for similar cases tend to differ across courts, the production of sentencing disparities by prosecutors versus judges has received very limited attention to date. In this paper, we focus on this issue using traffic offenses data from neighboring courts in South-East France. First, we measure disparities for observably similar cases both at the extensive margin (type of sentences) and intensive margin (quantum) and find large differences in sentencing across courts. Second, we decompose those disparities between the influence of prosecutors through their procedural choices (simplified versus classical criminal procedures) and that of judges who always have the final word on sentences. While there is heterogeneity in the role of prosecutors between courts, we find that most sentencing disparities cannot be explained by the sole decisions of prosecutors. |
| Keywords: | Courts Judicial disparities, Sentencing, Prosecutors, Mediation analysis |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03680153&r=law |
| By: | Malhotra, Manjunathan; Bhagwan, Sumitra; Shaturaev, Jakhongir |
| Abstract: | South Asia is a region of diverse post-colonial countries that are undergoing significant constitutional and socioeconomic change. Constitutional law scholars have taken an interest in South Asian constitutionalism and how the region is addressing its unstable democratic systems. In recent years, South Asian states have amended or replaced their constitutions and forms of governance. Two recent crises, the 2021 Taliban offensive in Afghanistan and the 2022 Sri Lankan political crisis, highlight the importance of economic governance and the role of accountable government in the market. Despite constitutional structures for economic governance and the establishment of government institutions, South Asian states are witnessing the weakening of institutional mechanisms and the delegitimization of the rule of law. This paper argues that South Asian states need to develop practices that focus on accountable constitutional governance of the economy and strengthening financial institutions. While South Asian constitutions have traditionally kept economic actions by the state outside the purview of judicial and public scrutiny, the lack of accountability and the cynical manipulation of economic institutions by authoritarian leaders raises questions about the constitutional limits of the power of elected leaders. The paper explores how strengthening the pillars of economic constitutionalism can lead to the creation of a stable constitutional order in South Asia. |
| Keywords: | Democracy, Constitutional Order, Constitutional Crisis, Economic Constitutionalism, South Asia |
| JEL: | K0 K22 K4 K41 |
| Date: | 2023–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118727&r=law |
| By: | NAKAHARA Hirohiko; IKEDA Yoko; TANABE Kuniharu; URANO Ryoichi; HAGIWARA Naru; OGATA Hiroaki; OTA Satoshi; NAKAMURA Masakatsu; SAKASHITA Hirotaka; MASUGUCHI Yutaka |
| Abstract: | The Regulatory Sandbox is a new system that was established under the Law on Special Measures for Productivity Enhancement (enacted in 2018) and made permanent with the revised Industrial Competitiveness Enhancement Law. It is a framework for suspending existing regulations within a defined time period and scope of participants that was established to allow for rapid trials of new technologies and business models related to the Fourth Industrial Revolution. In some cases, the Regulatory Sandbox system has led to legal revisions in the Road Traffic Law, Building Lots and Building Transaction Law, Land and Building Lease Law, and Industrial Competitiveness Law (a special exception to the Civil Code). Based on the past five years of the system’s operation, we will conduct research on the policy, which represents the era of the Fourth Industrial Revolution. The structure of this paper is as follows: First, from the perspective of the administrative officials who established the system, we will provide an overview of the system and explain the foundation for the system, which is the method that is used to eliminate the bottlenecks that exist between new ideas and their public implementation. Then, we will analyze a case study from the perspective of the government officials who were actually involved in the operation of the system and who worked hard to undertake this project in cooperation with startups and regulatory agencies. Finally, as policy suggestions to promote further public-private co-creation innovation, we will discuss from various perspectives; (1) the future of rulemaking and policy makers, (2) the momentum for strengthening support for startups, which are the main players in the era of the fourth industrial revolution, and (3) new developments in the legal functions of companies. |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:23021&r=law |
| By: | Diego A. Martin (Growth Lab); Dario A. Romero |
| Abstract: | Did the COVID-19 pandemic create an opportunity to earn population control through illegal violence? We argue that criminal groups in Colombia portray as de facto police by using mass killings to reduce the COVID-19 outbreak. They used massacres as a threat to enforce social distance measures in places they considered worth decreasing mobility. Our results from an Augmented Synthetic Control Method model estimated that commuting to parks fell 20% more in areas with massacres than in places without mass killings. In addition, we do not find a decline in mobility to workplaces and COVID-19 deaths after the first mass killing. These findings are congruent with the hypothesis that illegal armed groups used fear to enforce mobility restrictions without hurting economic activities and their sources of revenue. However, violence slightly impacted the virus’ spread. Treated areas had a decline of 35 cases per 100, 000 inhabitants four months after the first massacre. |
| Keywords: | COVID-19, Social Distance, Lockdowns, Massacres, Governance |
| JEL: | H75 D74 K42 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:155a&r=law |
| By: | Olayinka Oyekola (Department of Economics, University of Exeter); Olapeju C. Ogunmokun (Faculty of Business and Law, De Montfort University); Martha A. Omolo (Department of Economics, University of Exeter); Samuel Odewunmi (Department of Economics, University of Exeter) |
| Abstract: | We explore the hypothesis that the gender of a firm's manager and a country's legal origin are important factors influencing whether or not firms hire external auditors to prepare their financial statements. International evidence from 140, 860 unique firms surveyed in 139 countries over the period 2008-2022 offers significant support for our hypothesis. In particular, our results suggest that: (1) the probability of female-managed firms producing externally audited financial statements is 1.42 percentage points (or 0.03 standard deviation) lower than their male-managed counterparts; (2) the probability of producing externally audited financial statements by firms in common law origin countries is 7 percentage points (or 0.14 standard deviation) higher than for firms located in civil law origin countries; and (3) the lower frequency with which female-managed firms in our sample report audited financial statements is exacerbated when the firms are located in a common law country. We verify that these results are robust with respect to a number of other considerations, including endogeneity issues, alternative proxies for key variables, additional confounding factors, and potential outliers. Our results contribute to the literature on the relationships between manager characteristics, firm disclosure, and country legal environment. |
| Keywords: | gender, legal origin, accounting disclosure |
| Date: | 2023–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2313&r=law |
| By: | Agan, Amanda (Rutgers University); Garin, Andrew (Carnegie Mellon University); Koustas, Dmitri (University of Chicago); Mas, Alexandre (UC Berkeley); Yang, Crystal S. (Harvard University) |
| Abstract: | We study the labor market impacts of retroactively reducing felonies to misdemeanors in San Joaquin County, CA, where criminal justice agencies implemented Proposition 47 reductions in a quasi-random order, without requiring input or action from affected individuals. Linking records of reductions to administrative tax data, we find employment benefits for individuals who (likely) requested their reduction, consistent with selection, but no benefits among the larger subset of individuals whose records were reduced proactively. A field experiment notifying a subset of individuals about their proactive reduction also shows null results, implying that lack of awareness is unlikely to explain our findings. |
| Keywords: | crime, labor markets |
| JEL: | J0 K0 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16528&r=law |