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on Law and Economics |
| By: | František Turnovec (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | A simple algebraic model of a property structure leading to the Leontief-type input-output scheme is developed and used to eliminate indirect ownership relations and evaluate the final distribution of national property among individual owners. Concepts of "family capitalism" and "capitalism of agents" type of corporate governance are defined and compared. Implications of different designs of corporate governance for general equilibrium theory, profit distribution and decision making are discussed. |
| Keywords: | Corporate governance; Leontief input-output model; ownership structure; primary owners; principal-agent problem; secondary owners |
| JEL: | C60 L33 K11 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp070&r=law |
| By: | Ondřej Knot (Center for Economic Research and Graduate Education-Economics Institute, Prague, Czech Republic); Ondřej Vychodil (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic; CERGE-EI, Prague, Czech Republic) |
| Abstract: | The paper presents facts on the ex-post efficiency of the Czech bankruptcy procedures. First, it briefly summarizes in what aspects bankruptcy systems differ across countries and introduces the main observations made about the Czech case so far. Second, international data are presented to assess the Czech standings in four aspects of bankruptcies' ex-post efficiency – duration, recovery rate, administrative costs, and continuation/liquidation decision. Third, the paper provides a summary of statistical observations on ex-post efficiency based on data on 903 Czech companies whose bankruptcies were completed during 2004 by the distribution of returns to the claim-holders. In the paper, understanding the ex-post efficiency is meant as an important prerequisite for an analysis from the ex-ante efficiency prospective. |
| Keywords: | bankruptcy; liquidation; ex-post efficiency |
| JEL: | G33 K39 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2006_03&r=law |
| By: | Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College) |
| Abstract: | Traditional analyses of household service losses in personal injury and wrongful death litigation calculate the losses over the expected lifetime of the injured or deceased individual. In fact, the losses to the surviving family members are more accurately described by using joint survival probabilities of the injured or deceased person and their survivors, or a “joint life expectancy.” The use of joint probabilities will always serve to reduce expected household service losses and these reductions can be especially significant when the deceased is significantly younger than the surviving spouse or if the survivor has a relatively low remaining life expectancy. |
| Keywords: | forensic economics, household services |
| JEL: | K13 K41 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0611&r=law |
| By: | W. Stanley Siebert (University of Birmingham and IZA Bonn) |
| Abstract: | Why should floors be set under wages and working conditions by labour market regulations? This paper finds that efficiency arguments are questionable, because of the disemployment effects of strict regulation. Regulation is better explained in terms of the choices of the employed semi- and unskilled worker group. This group contains the median voter, who rationally desires strict regulation to divert rent from other groups such as the skilled workers and the unemployed. Legal origin may also be important: some countries have fallen under the influence of the interventionist French (or German) legal tradition. Given a predisposition to intervene, these countries begin with some degree of labour regulation, which then creates its own constituency of rent protectors and rent growers. |
| Keywords: | labour market regulation, European Union, median voter, legal origin, minimum wages, working conditions floors, wage inequality, job opportunity inequality, long-term unemployment |
| JEL: | J38 J41 J58 J68 J83 K31 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2430&r=law |
| By: | John Haltiwanger (University of Maryland, U.S. Census Bureau, NBER and IZA Bonn); Stefano Scarpetta (World Bank and IZA Bonn); Helena Schweiger (European Bank for Reconstruction and Development) |
| Abstract: | This paper reviews the process of job creation and destruction across a sample of 16 industrial and emerging economies over the past decade. It exploits a harmonized firm-level data-set drawn from business registers and enterprise census data. The paper assesses the importance of technological factors that characterize different industries in explaining crosscountry differences in job flows. It shows that industry effects play an important role in shaping job flows at the aggregate level. Even more importantly, differences in the size composition of firms - within each industry - explain a large fraction of the overall variability in job creation and destruction. However, even after controlling for industry/technology and size factors there remain significant differences in job flows across countries that could reflect differences in business environment conditions. In this paper, we look at one factor shaping the business environment, namely, regulations on hiring and firing of workers. To minimize possible endogeneity and omitted variable problems associated with cross-country regressions, we use a difference-in-difference approach. The empirical results suggest that stringent hiring and firing costs reduce job turnover, especially in those industries that require more frequent labor adjustment. Regulations also distort the patterns of industry/size flows. Within each industry, medium and large firms are more severely affected by stringent labor regulations, while small firms are less affected, probably because they are partially exempted from such regulations or can more easily circumvent them. |
| Keywords: | gross job flows, firm dynamics, firm size, product and labor market regulations, firm-level data |
| JEL: | J23 J53 K31 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2450&r=law |
| By: | Fei Peng (University of Birmingham Business School); W. Stanley Siebert (University of Birmingham Business School and IZA Bonn) |
| Abstract: | This paper analyzes the cyclical behaviour of male real wages in Italy using the European Community Household Panel 1994-2001. We distinguish between job stayers (remaining in the same job), and within- and between-company job movers. Stayers are the large majority. We find stayers in Northern Italy to have high cyclicality of real wages, higher in fact than the US and the UK. The Northern cyclicality is significant for all sub-samples (except for public sector workers), and higher in small firms, the private sector, and for temporary workers, as expected. In contrast, we find little wage cyclicality for any sub-group in the Centre-South, even for workers in small private sector firms. Evidently, labour markets in the North of Italy operate much more competitively than in the Centre and South. |
| Keywords: | real wage cyclicality, job stayers, Italy, ECHP |
| JEL: | E32 J31 K31 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2465&r=law |
| By: | Jesse Bull (Department of Economics, Florida International University) |
| Abstract: | This paper explores the limits of "verifiability" induced by the process of costly evidence production in contractual relationships of complete information. I study how the cost of providing evidence (disclosing documents) influences the set of enforceable contracts. I show that evidence cost can be both beneficial and detrimental with regard to enlarging the set of settlement outcomes that can be implemented. Further, I study how what can be considered verifiable is influenced by parties’ incentives to produce evidence and by the particular evidence cost structure. My analysis includes the opportunity for contracting parties to renegotiate (or settle) prior to the enforcement phase. I also study how the availability of redundant documents expands the set of enforceable contracts, and discuss the relevance of my findings to the design of legal institutions. |
| Keywords: | contracts, verifiability |
| JEL: | C70 D74 K10 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:0611&r=law |
| By: | Jesse Bull (Department of Economics, Florida International University) |
| Abstract: | This paper compares the relative merits of adversarial and inquisitorial systems of civil procedure in the presence of evidence suppression. Each party has the incentive to suppress evidence that may damage her case, and to reveal any evidence that strengthens her case. I model the decision of a litigant to suppress evidence. The court conditions its action (transfers between the parties) upon the evidence which is revealed. Enforcement costs, which are the cost of suppression and the cost of requesting evidence, are a loss to the relationship and form the basis for my evaluation of the relative merits of each system. I find that neither system always outperforms the other. The strength of the inquisitorial system is that it allows for randomization over evidence requests, which leads to lower expected enforcement cost. Litigants cannot commit to randomize as they are motivated by the expected award in litigation. The strength of the adversarial system is that it sometimes allows litigants to utilize their information about the level of suppression. |
| Keywords: | contracts, litigation, fact finding |
| JEL: | C70 D74 K10 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:0612&r=law |