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on Law and Economics |
| By: | Bjuggren, Per-Olof (Jönköping International Business School); Eklund, Johan (Jönköping International Business School); Wiberg, Daniel (Jönköping International Business School) |
| Abstract: | This paper contributes to the literature on ownership, control and performance by exploring these relationships for Swedish listed companies (1997-2002). We find that firms, on average, are making inferior investment decisions and that the use of dual-class shares have a negative effect on performance. According to our results concentration of ownership has a negative impact on investment performance and firm value when control instruments that separate votes from capital share are used. Marginal q is used as a measure of economic performance. It was presented in an article by Mueller and Reardon in 1993 and has recently been used in empirical studies of ownership and performance by among others Gugler and Yurtoglu (2003). Frequently Tobin’s q is used in studies of this type, but Tobin’s q has a number of disadvantages which can be circumvented by employing a marginal q. This study adds to earlier studies by investigating how the separation of vote and capital shares’ creates a wedge between the incentives and the ability to pursue value maximization. The relationships between the performance measure and different ownership characteristics like ownership concentration and foreign ownership are also investigated. |
| Keywords: | marginal q; ownership structure; firm performance; investments; dual-class shares |
| JEL: | C23 D21 G30 K22 L20 |
| Date: | 2005–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0071&r=law |
| By: | David S. Evans; Albert L. Nichols; Richard Schmalensee |
| Abstract: | U.S. v. Microsoft and the related state suit filed in 1998 appear finally to have concluded. In a unanimous en banc decision issued in late June 2004, the D.C. Circuit Court of Appeals rejected challenges to the remedies approved by the District Court in November 2002. The wave of follow-on private antitrust suits filed against Microsoft also appears to be subsiding. In this paper we review the remedies imposed in the United States, in terms of both their relationship to the violations found and their impact on consumer welfare. We conclude that the remedies addressed the violations ultimately found by the Court of Appeals (which were a subset of those found by the original district court and an even smaller subset of the violations alleged, both in court and in public discourse) and went beyond them in important ways. Thus, for those who believe that the courts were right in finding that some of Microsoft's actions harmed competition, the constraints placed on its behavior and the active, ongoing oversight by the Court and the plaintiffs provide useful protection against a recurrence of such harm. For those who believe that Microsoft should not have been found liable because of insufficient evidence of harm to consumers, the remedies may be unnecessary, but they avoided the serious potential damage to consumer welfare that was likely to accompany the main alternative proposals. The remedies actually imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal and harming consumers by unnecessarily restricting Microsoft's ability to compete. |
| JEL: | K21 L1 L4 L6 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11727&r=law |
| By: | Simen Bjornerud; Vassiliki Koutsogeorgopoulou; Michael Wise; Helmut Ziegelschmidt |
| Abstract: | The OECD Growth Study and other empirical work have shown that the strength of competition in product markets plays an important role in the economic growth process as well as contributing to a more efficient allocation of resources in a static sense. More intense competition is likely to encourage stronger efforts of managers to improve efficiency and induce higher innovative activity, leading to higher multi-factor productivity. This paper begins with a short review of Australia’s growth performance since the early 1990s and its possible link to strengthened competitive pressures and their interaction with other economic reforms. Attention is then turned to indicators of product market competition to gauge the strength of competitive pressures. This is followed by an assessment of the general competition policy framework and its role in promoting competition. The next section presents the framework of the National Competition Policy and reviews the completeness of the reform programme and the areas requiring further action. The paper then examines a number of sectors where regulatory policies can be expected to have particularly large impacts. The implications of trade liberalisation on Australia’s economic performance and the scope for further improvements are also discussed in some detail. The paper concludes with a set of policy recommendations. This Working Paper relates to the 2005 OECD Economic Survey of Australia (www.oecd.org/eco/surveys/australia). <P>Concurrence sur les marchés de produits et performance économique en Australie L’Étude sur la croissance de l’OCDE et d’autres travaux empiriques ont montré que la vigueur de la concurrence sur les marchés des produits joue un rôle important dans le processus de croissance économique et contribue aussi à une allocation plus efficiente des ressources du point de vue statique. Un renforcement de la concurrence encouragera vraisemblablement les gestionnaires à faire des efforts plus soutenus pour améliorer l’efficience et induire une activité plus novatrice, conduisant à une augmentation de la productivité multifactorielle. Ce document de travail commence avec un bref examen de la performance de l’Australie sur le plan de la croissance depuis le début des années 90 et de ses liens éventuels avec le renforcement des pressions concurrentielles et leur interaction avec d'autres réformes économiques. On s’intéressera aussi aux indicateurs de la concurrence sur les marchés des produits de façon à évaluer la vigueur des pressions concurrentielles. Cet examen est suivi d’une évaluation du cadre général de la politique de la concurrence et de son rôle dans la promotion de la concurrence. La section suivante expose le cadre de la politique nationale de la concurrence et analyse l’exhaustivité du programme de réformes et les domaines exigeant une action plus approfondie. Plusieurs secteurs où les politiques réglementaires devraient avoir une incidence particulièrement importante sont ensuite passés en revue. Les conséquences de la libéralisation commerciale sur la performance économique de l’Australie et les possibilités d’autres améliorations sont aussi examinées en détail. Le document se conclut par un ensemble de recommandations d’action. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de l’Australie, 2005 (www.oecd.org/eco/etudes/australie). |
| Keywords: | telecommunications, télécommunications, health, santé, productivité, politique de la concurrence, air transport, transport aérien, trade policy, politique commerciale, retail distribution, electricity, gas, électricité, gaz, eau, national competition policy, NCP, Trade Practices Act, ACCC, Dawson Review, multifactor productivity, access regime, water, rail, road, television broadcasting, legal services, multifactorielle, NCP, Trade Practices Act, ACCC, Commission Dawson, révision de la législation, régime d’accès, transport feroviaire, transport routier, télédiffusion, distribution de détail, professions juridiques |
| JEL: | H4 K20 K21 L50 L94 L96 Q1 Q4 |
| Date: | 2005–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:451-en&r=law |
| By: | Vassiliki Koutsogeorgopoulou; Helmut Ziegelschmidt |
| Abstract: | This Working Paper looks at structural policies which would improve Greece’s long-term economic performance and help speed economic and social convergence with average European Union member countries. It focuses on a number of key areas which are particularly important for rapid growth as they offer substantial scope for catching up with international best practice. These areas are: getting more people into work through higher flexibility in the labour market and more effective labour market policies; competition policy reform; the liberalisation of product markets, in particular the energy, telecommunication and transport sectors; policies to foster entrepreneurship; and financial market reform, including the implementation of a better corporate governance regime. A number of Annexes provide additional information on the reform of the energy markets (electricity, gas, oil), the telecommunications sector, maritime transport and financial markets. This Working Paper relates to the 2005 OECD Economic Survey of Greece (www.oecd.org/eco/surveys/Greece) <P>Renforcer le potentiel de croissance de la productivité en Grèce Ce document de travail examine les politiques structurelles qui amélioreraient les performances à long terme de la Grèce en matière de productivité et contribueraient à accélérer la convergence sur le plan économique et social avec les autres pays membres de l’UE. Ce document de travail se concentre sur un certain nombre de domaines clés, particulièrement importants pour une progression rapide de la productivité car ils offrent des possibilités non négligeables d’harmonisation avec les meilleures pratiques internationales. Ces domaines sont les suivants : réforme de la politique de la concurrence, promotion d’une économie fondée sur le savoir, libéralisation des marchés de produits, en particulier dans les secteurs de l’énergie, des télécommunications et du transport, mesures favorisant l’entrepreneuriat, et mise en œuvre d’un régime de gouvernement d’entreprise de meilleure qualité. Un certain nombre d'annexes prévoient l'information additionnelle sur la réforme des marchés de l'énergie (l'électricité, gas, pétrole), du secteur de télécommunications, du transport maritime, et des marchés financiers. Ce document de travail se rapporte à l'Étude économique de l'OCDE de la Grèce (www.oecd.org/eco/surveys/Grèce) |
| Keywords: | telecommunications, télécommunications, financial markets, marchés financiers, productivity, productivité, competition policy, politique de la concurrence, labour markets, marché du travail, privatisation, transport, transport, privatisation, product markets, marchés de produits, reforms, réformes, flexibility, energy sector, entrepreneurship, corporate governance, régime d’accès, flexibilité, secteur d'énergie, entrepreneuriat |
| JEL: | J22 J38 K20 L94 L96 N2 |
| Date: | 2005–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:452-en&r=law |
| By: | Leo H. Kahane (California State University, East Bay); David Paton (Nottingham University Business School); Rob Simmons (Lancaster University Management School) |
| Abstract: | We use panel data from 1983 to 1997 for the 42 police force areas in England and Wales to test the hypothesis that legalizing abortion contributes to lower crime rates. We provide an advance on previous work by focusing on the impact of possible endogeneity of effective abortion rates with respect to crime. Our use of U.K. data allows us to exploit regional differences in the provision of free abortions to identify abortion rates. When we use a similar model and estimation methodology, we are able to replicate the negative association between abortion rates and reported crime found by Donohue and Levitt for the U.S. However, when we allow for the potential endogeneity of effective abortion rates with respect to crime, we find no clear connection between the two. |
| Keywords: | abortion, crime, fertility |
| JEL: | K42 I38 J13 |
| Date: | 2005–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:nub:occpap:16&r=law |
| By: | Patrick Bayer (Economic Growth Center, Yale University); David E. Pozen |
| Abstract: | This paper uses data on juvenile offenders released from correctional facilities in Florida to explore the effects of facility management type (private for-profit, private nonprofit, public state-operated, and public county-operated) on recidivism outcomes and costs. The data provide detailed information on individual characteristics, criminal and correctional histories, judge-assigned restrictiveness levels, and home zipcodes—allowing us to control for the non-random assignment of individuals to facilities far better than any previous study. Relative to all other management types, for-profit management leads to a statistically significant increase in recidivism, but, relative to nonprofit and state-operated facilities, for-profit facilities operate at a lower cost to the government per comparable individual released. Costbenefit analysis implies that the short-run savings offered by for-profit over nonprofit management are negated in the long run due to increased recidivism rates, even if one measures the benefits of reducing criminal activity as only the avoided costs of additional confinement. |
| Keywords: | Juvenile Crime; Juvenile Correctional Facilities; Recidivism; Prison Privatization; Provision of Public Goods: Nonprofit, For-profit, Public |
| JEL: | H0 H1 H4 K0 K4 |
| Date: | 2003–07 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:863&r=law |
| By: | Ricardo J. Caballero; Eduardo M.R.A. Engel (Dept. of Economics, Yale University); Alejandro Micco |
| Abstract: | Microeconomic flexibility, by facilitating the process of creative-destruction, is at the core of economic growth in modern market economies. The main reason for why this process is not infinitely fast is the presence of adjustment costs, some of them technological, others institutional. Chief among the latter is labor market regulation. While few economists would object to such a view, its empirical support is rather weak. In this paper we revisit this hypothesis and find strong evidence for it. We use a new sectoral panel for 60 countries and a methodology suitable for such a panel. We find that job security regulation clearly hampers the creative-destruction process, especially in countries where regulations are likely to be enforced. Moving from the 20th to the 80th percentile in job security, in countries with strong rule of law, cuts the annual speed of adjustment to shocks by a third while shaving off about one percent from annual productivity growth. The same movement has negligible effects in countries with weak rule of law. |
| Keywords: | Microeconomic rigidities, creative-destruction, job security regulation, adjustment costs, rule of law, productivity growth |
| JEL: | E24 J23 J63 J64 K00 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:893&r=law |