New Economics Papers
on Law and Economics
Issue of 2011‒08‒15
four papers chosen by
Jeong-Joon Lee, Towson University

  1. The Nature, Timing and Impact of Broadband Policies: a Panel Analysis of 30 OECD Countries By Filippo Belloc; Antonio Nicita; Maria Alessandra Rossi
  2. Preparing for Basel IV (whilst commending Basel III) : why liquidity risks still present a challenge to regulators in prudential supervision ( Part II) By Ojo, Marianne
  3. Integrity, respect for others, and ethics – three essential leadership qualities By Ojo, Marianne
  4. What is the True Loss Due to Piracy?: Evidence from Microsoft Office in Hong Kong By Leung, Tin Cheuk

  1. By: Filippo Belloc; Antonio Nicita; Maria Alessandra Rossi
    Abstract: We empirically investigate the impact of a vast array of public policies on wireline broadband penetration through a novel and unique dataset covering 30 OECD countries, over 1995-2010. We find that while both supply and demand-side policies have a positive effect on broadband penetration, their relative impact depends on the actual stage of broadband diffusion. When an advanced stage is reached, only demand-side policies appear to generate a positive and increasing effect. Moreover, both technological and market competition play a positive role, and the effect of the latter shows a non-linear path along the stage of market development. Finally, the relative weight of the service sector in the national economy reveals to be crucial for broadband penetration. Our analysis provides new insights into the policy debate and in particular on the rationale of a selective policy design for broadband penetration and, in perspective, for the rollout of next-generation networks.
    Keywords: telecommunications policies, broadband penetration, infrastructure investments
    JEL: K20 L96 O31 O57
    Date: 2011–07
  2. By: Ojo, Marianne
    Abstract: Whilst the predecessor (Part I) to this paper addresses criticisms and challenges which have arisen in response to recent Basel Committee's initiatives aimed at addressing capital and liquidity standards, the present paper highlights further measures which are being introduced by the Basel Committee to address such criticisms and challenges. As well as presenting and drawing attention to proposals which could serve as means of addressing challenges presented by liquidity risks, Part I of the paper concludes with the result that market based regulation is an essential and vital tool in the Basel Committee's efforts to address some of the challenges presented by liquidity risks. The present paper highlights the Basel Committee's acknowledgement of this conclusion. Furthermore, it draws attention to other areas which are considered to constitute fertile substrates for purposes of future research. This paper will also illustrate why the potential of banking regulations and disclosure requirements to impact risk taking levels is not only dependent on certain factors such as the dissemination of information to appropriate recipients, appropriate volume of disseminated information, when to disseminate such information, but also on other factors such as ownership structures and effective corporate governance measures aimed fostering monitoring, supervision and accountability. In arguing that additional leverage ratios which have recently been proposed by the Basel Committee will play a key role in facilitating the diversification of banks‘ liquid assets – via the new liquidity standards (Liquidity Coverage Ratio and the Net Stable Funding Ratio), contribution is also made to the current discussion on the resilience of the banking sector – albeit from the perspective of the stabilisation of the entire system.
    Keywords: liquidity risks; systemic risks; capital; standards; Basel III; moral hazard; disclosure; information; Liquidity Coverage Ratio (LCR); Net Stable Funding Ratio (NSFR); accountability; corporate governance
    JEL: K2 E32 G3 D8
    Date: 2010–12–30
  3. By: Ojo, Marianne
    Abstract: Ethics, respect for others and integrity (embracing respect for the law), should definitely be pre requisites for leadership. Unfortunately many so called leaders do not understand or practise these values. Some leaders who are held with high regard and esteem at the workplace are prepared to sacrifice a life time's achievement and reputation within seconds. What is even worse, these (appalling) role models comfortably reveal their weaknesses and lack of character publicly. If we cannot trust our leaders to exercise a reasonable degree of integrity – both with respect to observing and practising the law, who can we be responsible to or look up to? There is also the very critical and rather unfortunate issue where the environment encourages or even accepts such low ethical standards. Many leaders with low ethical values are therefore encouraged into believing they can escape certain practices (are beyond the law) – even where their targets are entitled to prevailing jurisdictional rights!!! Some leaders who serve as poor role models for their future generations are frequently associated with the shameful practice of bullying their younger successors. Whilst certain countries appreciate the roles which their future generations will assume in the future and prepare these for the future, other jurisdictions are content to watch selfishly and parasitically exploit their future leaders. In many organisations, workplaces, the input of future leaders (of tomorrow) is unbelievably low that one wonders how these future leaders will be able to assume their future responsibilities competentently and confidently. To educate is of vital importance. To re educate constitutes even a greater task – where certain perceptions are already permanently and firmly embedded in a mode of thinking.Where the development of a nation or organisation depends on the need and ability to change certain perceptions, then such re education becomes vitally important. Through a consideration of issues which include the need to respect the rights of others, the need for leadership qualities such as ethics and integrity, this paper not only presents „research which is capable of practical application within organisations“, but also reflects „evidence and considerations of how the research can benefit ethics within businesses and other organisations.“
    Keywords: integrity; selflessness; respect; ethics; trust; leadership; privacy; human rights; ECHR; accountability; communication
    JEL: K2 G3 D8
    Date: 2011–04
  4. By: Leung, Tin Cheuk
    Abstract: Software piracy remains rampant despite the successful measures the Hong Kong government has taken to eradicate street piracy. This is because most people prefer substituting a counterfeit copy of a software CD (street piracy) with an illegal download of the software (Internet piracy). To support this claim, I construct a unique data set from 281 college students in Hong Kong to demonstrate two things. First, I estimate a random-coefficient discrete choice demand system for Microsoft Office from legal and different illegal sources. Estimates obtained from a Bayesian approach, with a mixture of normal priors, indicate a strong substitution pattern between street piracy and Internet piracy. Second, I conduct counterfactuals in which street piracy is absent. Results are twofold. First, most students would switch to Internet piracy. Second, the government, by assuming that each pirated copy represents a lost sale, may over-estimate the gain from eradicating piracy by up to nine times.
    Keywords: software piracy; bayesian; conjoint analysis
    JEL: K42 L86
    Date: 2011–07

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