New Economics Papers
on Law and Economics
Issue of 2011‒11‒21
four papers chosen by
Jeong-Joon Lee, Towson University

  1. The Role of Law, Corruption and Culture in Investment Fund Manager Fees By Sofia Johan; Dorra Najar
  2. The unbearable foreignness of EU law in social policy, a sociological approach to law-making By Jean-Claude Barbier; Fabrice Colomb
  3. Law and Investment in Africa By Simplice A., Asongu
  4. Law, Finance and Investment: does legal origin matter? By Simplice A., Asongu

  1. By: Sofia Johan (Department of Economics - Tilburg University); Dorra Najar (CEREG - Centre de Recherche sur la gestion et la Finance - DRM UMR 7088 - Université Paris Dauphine - Paris IX)
    Abstract: This paper considers an international sample of venture capital and private equity funds to assess the role of law, corruption and culture in setting fund manager fees in terms of their fixed management fees, carried interest performance fees, clawbacks of fees and cash versus share distributions of fees. The data highlight a role of legal conditions in shaping fees paid to fund managers. In countries with better legal conditions, fixed fees are lower, carried interest fees are higher, clawbacks are less likely, and share distributions are more likely. These findings suggest legal conditions help to align the interests of managers and shareholders. More specifically, we examine which element of legal conditions matter most, and discover that corruption levels play a pronounced role in shaping fund manager fee contracts. We also show that cultural forces such as Hofstede's measures of power distance and uncertainty avoidance likewise play a role in influencing fees.
    Keywords: Managerial Compensation; Incentive Contracts, Private Equity; Law and Finance
    Date: 2011
  2. By: Jean-Claude Barbier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Fabrice Colomb (Centre Pierre Naville - Université d'Evry-Val d'Essonne)
    Abstract: The main purpose of the present text is assessing EU law from the perspective of its "impact" on national systems of social protection, social services and labour law : how does EU governance affect "social policy" in the Union ? After recalling the main characteristics of EU governance and presenting the relevant actors of the making of EU social law, we systematically compare EU and national law with respect to two essential dimensions : EU law making in general and the special case of "social law". Eventually we arrive at a global comparative assessment of the respective legitimacies of EU law and national legislation. Considered from the point of view of relevant actors interviewed during the research, the dynamics of this interaction emerges as structurally constrained but rather open-ended.
    Keywords: Sociology of European law, European social policy, European integration, Court of justice of the EU, Europeanization.
    Date: 2011–10
  3. By: Simplice A., Asongu
    Abstract: This paper sets a new tone in the legal origins debate with the overwhelming dominance of French civil-law countries in private investment: contrary to mainstream consensus where-in, English common-law countries are better at championing private property rights (La Porta et al., 1998; Beck et al, 2003). Findings are premised on much recent data (1996-2007) from 38 African countries. The study investigates how French, English, French sub-Saharan, Portuguese and North African legal origins shape domestic, foreign, private and public investments through law channels of regulation quality and the rule of law.
    Keywords: Law; investment; developing countries
    JEL: K40 K20 E22 G20 P50
    Date: 2011–11–14
  4. By: Simplice A., Asongu
    Abstract: This paper assesses if legal origin explains domestic, foreign, private and public investments through financial intermediary channels of depth, efficiency, activity and size. Findings show that legal origin matters in the finance-investment nexus; though its ability to explain aggregate investment dynamics only through financial intermediary channels is limited in the cases of private and public investments.
    Keywords: Law; Finance; Investment; Developing countries
    JEL: K40 K20 E22 P50
    Date: 2011–11–10

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