New Economics Papers
on Law and Economics
Issue of 2013‒10‒25
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Businesses seized from organized crime groups: their relations with the banking system By Luigi Donato; Anna Saporito; Alessandro Scognamiglio
  2. Seasonality in smoking behaviour: Re-evaluating the effects of the 2005 public smoking ban in Italy By Emilia Del Bono; Klaus Grünberger; Daniela Vuri
  3. The Local Determinants of Victimization By Camille Hémet
  4. Multilateral Environmental Agreements in the WTO: Silence Speaks Volumes By Horn, Henrik; Mavroides, Petros C.
  5. They played the merger game: A retrospective analysis in the UK videogames market By Aguzzoni, Luca; Argentesi, Elena; Buccirossi, Paolo; Ciari, Lorenzo; Duso, Tomaso; Tognoni, Massimo; Vitale, Cristiana
  6. The likely impact of Basel III on a bank's appetite for renewable energy financing By Narbel, Patrick A.
  7. A Level Playing Field: An Optimal Weighting Scheme of Dismissal Protection Characteristics By Michael Kind
  8. The case for non-discrimination in the international protection of intellectual property By Difei Geng; Kamal Saggi
  9. Taxes and the Choice of Organizational Form by Entrepreneurs in Sweden By Edmark, Karin; Gordon, Roger

  1. By: Luigi Donato (Bank of Italy); Anna Saporito (Bank of Italy); Alessandro Scognamiglio (Bank of Italy)
    Abstract: This paper analyzes the relations between businesses seized from organized crime and the banking system. The first part of the paper examines legislative developments regarding seized and confiscated assets and highlights the persistence of problem areas despite the efforts to create a systematic framework for measures to combat crime on the economic plane. The analysis of firms’ credit and operational profiles in the second part of the paper finds no evidence that banks, following the confiscation order, impose more onerous terms and conditions with respect to other companies in the same sectors, located in the same geographical areas and having similar operational profiles. This finding appears to be linked to the observation that the deterioration of the main indicators dates back to the years before the confiscation order, presumably in part following preventive action by the banks, prompted as a precaution to reduce their exposure at the first hint of a firm’s involvement in anti-mafia investigations. The paper concludes with implications for policy, taking into consideration the crucial role of expectations, the need to restore firms to healthy conditions through timely planning and the importance of economically efficient operational choices.
    Keywords: requisition, organized crime, bank-firm relationships
    JEL: K42 G32
    Date: 2013–09
  2. By: Emilia Del Bono (ISER, University of Essex, IZA); Klaus Grünberger (University of Rome "Tor Vergata"); Daniela Vuri (University of Rome "Tor Vergata")
    Abstract: This paper investigates the impact of the public smoking ban which came into effect in Italy on January 2005 on individual smoking behaviour. Current empirical evidence supports the existence of a negative effect of the Italian ban on smoking prevalence and consumption in the general population. This is in contrast to what has been found in some other European countries. Our analysis shows that the apparent success of the Italian smoking ban is due to the fact that existing results do not take into account seasonal differences in smoking behaviour. Using quarterly data from the 1999/2000 and 2004/2005 Italian Health Surveys and adopting a difference-in-difference approach that nets out monthly variation in smoking rates, we show that the Italian smoking ban had no impact on individual smoking behaviour for the population as a whole, and only small effects on some groups of individuals.
    Keywords: Smoking, cigarette consumption, public smoking ban, treatment effects.
    JEL: I12 I18 K32 C31
    Date: 2013–10–18
  3. By: Camille Hémet (Department of Economics, Sciences Po - Sciences Po, AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM))
    Abstract: This paper explores the determinants of victimization at the neighborhood level, using data from the French victimization survey. Its contribution to the economics of crime literature is threefold. First, I provide evidence that neighborhood characteristics explain victimization better than individual characteristics. Second, I find that local unemployment rate is one of the most important factor explaining victimization, with a particularly large effect on small crimes such as motorbike theft or vandalism. I then tackle the endogenous location selection issue, by adopting the strategy developed by Bayer et al. (2008), based on the fact that the study is conducted at a very low geographic level. Third, I take advantage of the precise localization of the data to adopt a spatial approach, comparing the effect of unemployment rate in the reference neighborhood and in adjacent neighborhoods. The results support the idea that criminals are mobile across neighborhoods for more serious economic crimes, in line with the Beckerian theory of crime, but that petty crimes and vandalism do not involve any mobility, relating to the social disorganization theory.
    Keywords: victimization; neighborhood effects; unemployment; geography
    Date: 2013–10
  4. By: Horn, Henrik (Research Institute of Industrial Economics (IFN)); Mavroides, Petros C. (EUI, Florence)
    Abstract: This study contributes to the debate concerning the appropriate role of multilateral environmental agreements (MEAs) in in WTO dispute settlement. Its distinguishing feature is that it seeks to address this relationship in light of the reason why the parties have chosen to separate their obligations into two bodies of law without providing an explicit nexus between them. The basic conclusion is that legislators’ silence concerning this relationship should speak volumes to WTO adjudicating bodies: MEAs should not be automatically understood as imposing legally binding obligations on WTO Members, but could be used as sources of factual information.
    Keywords: settlement; Environmental agreements; WTO; Dispute
    JEL: F13 K32 K33 Q56
    Date: 2013–10–07
  5. By: Aguzzoni, Luca; Argentesi, Elena; Buccirossi, Paolo; Ciari, Lorenzo; Duso, Tomaso; Tognoni, Massimo; Vitale, Cristiana
    Abstract: We study the effect of a merger in a dynamic high-technology industry - the videogame market - which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains. --
    Keywords: R&D,Ex-post Evaluation,Videogames market,Retail sector
    JEL: K21 L24 L44 D22 O32
    Date: 2013
  6. By: Narbel, Patrick A. (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: The new Basel III regulations are likely to make long-term financing more expensive, which will affect the financing of capital-intensive renewable energy technologies, because they typically rely on long-term financing. In addition, the capital and liquidity requirements of Basel III are likely to limit the amount of capital available for renewable energy financing from banks in the future. Together, these are threats to renewable energy deployment because limited financing may prevent the financing of some projects and because more expensive loans are likely to make a number of projects uninteresting financially. A potential solution is proposed here, which requires financing capital-intensive energy projects, pooling these investments into a portfolio and selling down the portfolio in tranches to various types of investors. The benefit of this solution for banks is that it will allow them to maintain the financing of capital intensive renewable energy projects, while complying more easily with Basel III.
    Keywords: Renewable energy financing; Basel III; capital-intensive energy projects
    JEL: Q00 Q20 Q40
    Date: 2013–10–17
  7. By: Michael Kind
    Abstract: In the case of collective redundancies, employers are forced to regard certain characteristics when deciding who is going to be dismissed. This paper develops a procedure to derive an empirical based weighting scheme between the characteristics relevant for this selection (age, disability, dependencies and tenure). First, panel data from the German Socio-Economic Panel (SOEP) for the years 1991-2010 is used to estimate, conditional on the existence of dismissal protection, the relationships of the four characteristics with respect to reemployment probabilities and the quality of the new job (measured in terms of wage). Second, the individual valuation of the two outcomes is compared applying a life satisfaction analysis. Finally, based on the empirical results a weighting scheme for the characteristics is proposed, which serves as an evidence based guideline for employers, employees and unions in the process of collective redundancies.
    Keywords: Dismissal protection, reemployment probability, wage hit
    JEL: J63 J64
    Date: 2013
  8. By: Difei Geng (Vanderbilt University); Kamal Saggi (Vanderbilt University)
    Abstract: We evaluate the case for non-discrimination in the international protection of intellectual property. If trade is not subject to any frictions then requiring national treatment (NT) in patent protection does not have any consequences for innovation (and welfare) since unfavorable discrimination abroad is fully offset by favorable discrimination at home. In the presence of trade frictions, however, such international offsetting in patent protection is incomplete and innovation incentives are actually lower under NT. The formation of a free trade agreement increases the effective global protection available to members without affecting the protection available to the non-member.
    Keywords: Intellectual property rights, patent protection, non-discrimination, national treatment, trade barriers
    JEL: F1 O3
    Date: 2013–10–17
  9. By: Edmark, Karin (Research Institute of Industrial Economics (IFN)); Gordon, Roger (University of California)
    Abstract: This paper estimates the role of both tax and non-tax determinants in the choice in Sweden to be a closely-held corporation vs. a proprietorship, using individual data for 2004 to 2008 on owners of closely-held businesses. While lower-income individuals face relatively neutral incentives, higher income individuals face strong tax incentives to be corporate. The data suggest a relatively strong correlation between these tax incentives and the likelihood that a firm is corporate. Many conventional non-tax determinants are confirmed in the data as well.
    Keywords: Self-employment; Entrepreneurship; Taxation of closely-held businesses; Business organizational form
    JEL: G32 G38 H25
    Date: 2013–10–10

This issue is ©2013 by Eve-Angeline Lambert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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