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on Law and Economics |
| By: | Florian Smuda (ZEW Centre for European Economic Research; MaCCI Mannheim Centre for Competition and Innovation); Patrice Bougette (University of Nice Sophia Antipolis, France; GREDEG CNRS; LAMETA CNRS); Kai Hüschelrath (ZEW Centre for European Economic Research; MaCCI Mannheim Centre for Competition and Innovation) |
| Abstract: | The duration of appellate court proceedings is an important determinant of the efficiency of a court system. We use data of 234 firm groups that participated in 63 cartels convicted by the European Commission between 2000 and 2012 to investigate the determinants of the duration of the subsequent one- or two-stage appeals process. We find that while the speed of the first-stage appellate court decision depends on the court’s appeals-related workload, the complexity of the case, the degree of cooperation by the firms involved and the clarity of the applied rules and regulations, the second-stage appellate court proceedings appear to be largely unaffected by those drivers. We take our empirical results to derive conclusions for both firms that plan to file an appeal as well as public policy makers. |
| Keywords: | Law and economics, antitrust policy, cartels, appeals, European Union |
| JEL: | K21 K41 K42 L41 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-25&r=law |
| By: | Nicola Giocoli |
| Abstract: | It is impossible to tell the history of American antitrust law and economics during the so-called formative era (1890- 1915) without a preliminary understanding of the economic rationale underlying that major phase of American constitutional law commonly called laissez faire constitutionalism, or Lochner era. The essay is a preliminary effort to locate such a rationale in the almost perfect overlap between classical political economy, especially the notion of competition as the supreme organizing principle of thriving societies, and classical liberalism, in particular the notion of liberty of contract. It is argued that the well-known Progressive interpretation of the Lochner era fails to recognize the true meaning and extent of this overlap. The protagonists of our story are economists Adam Smith, John Stuart Mill and Francis Wayland, and Supreme Court Justices James Wilson, Oliver Wendell Holmes and Rufus Peckham. |
| Date: | 2014–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:thk:rnotes:42&r=law |
| By: | Patrick Martens (Maastricht School of Management) |
| Abstract: | This paper is focused on the links between the protection of Traditional Knowledge (TK), including origin products, and local economic development in developing countries. The analytical framework for the paper is based on Amartya Sen‟s elaboration of “development as freedom” in which development is seen as a fundamental human rights issue encompassing protective security, the provision of economic facilities, political freedoms, social opportunities and transparency guarantees (Sen, 1999). Context is provided by criticism of the behavior of multinational companies (MNCs) in developing countries, including allegations of bio-piracy, unfair labor practices and misappropriation of TK and Genetic Resources (GR) from their owners in combination with the growing importance of Corporate Social Responsibility as a business imperative for MNCs as well as civil society activism for human rights in north-south economic relations. Furthermore, owners and holders of TK and GR frequently also have to contend with anti-democratic practices and exploitation by their own governments and local elites thereby underlining the importance of international economic law (IEL). The paper assesses the current situation regarding the protection of TK in IEL, particularly regarding promising initiatives requiring compulsory benefit sharing and prior consultation, with specific reference to case studies of products from developing countries; notably, these products have become integrated into global value chains (which also include MNCs as lead actors). Two particularly relevant cases: argane oil from Morocco and rooibos from South Africa are discussed in relation to Sen‟s „development as freedom‟ framework. These contrasting experiences lead to conclusions being made on the need to strengthen international, regional and national protective legal systems and political freedoms while at the same time providing an appropriate level of development support in the establishment of „economic facilities‟, „transparency guarantees‟ and „social opportunities‟ in Sen‟s terms, including value chain upgrading and well-designed technical assistance. |
| Keywords: | Development as Freedom, Economic Facilities, Geographical Indications, Intellectual Property Rights, Protective Security, Social Opportunities, Traditional knowledge, Transparency Guarantees |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2014/31&r=law |
| By: | Hornuf, Lars; Schwienbacher, Armin |
| Abstract: | This paper first presents the development of the crowdinvesting market in Europe since its start in 2007. Then, using hand-collected data on the complete set of crowdinvesting campaigns run in Germany, the paper shows that successful campaigns tend to be launched by new startups and when the minimum ticket size is small so that more crowd investors can participate. Moreover, the use of the partiarisches Darlehen (a specific form of equity-linked notes not subject to prospectus regulation) adopted at the end of 2012 in Germany (as a response to alleviating regulatory constraints) has led to larger amounts being raised but also campaigns becoming more likely to achieve their targets. These two results combined indicate that contractual arrangements that enable more participation from the crowd tend to work best. Finally, campaigns launched on portals already having some experience are more likely to raise larger amounts. These findings should be of use to entrepreneurs who need to choose among a larger range of different crowdinvesting portals. |
| Keywords: | entrepreneurial finance; business finance; crowdinvesting; equity crowdfunding |
| JEL: | G3 L26 M13 K22 |
| Date: | 2014–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:21388&r=law |
| By: | Liang, J. Nellie (Board of Governors of the Federal Reserve System (U.S.)); Falato, Antonio (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | Using a regression discontinuity design, we provide evidence that incentive conflicts between firms and their creditors have a large impact on employees. There are sharp and substantial employment cuts following loan covenant violations, when creditors exercise their ex post control rights. The negative impact of violations on employment is stronger for firms that face more severe agency and financing frictions and those whose employees have weaker bargaining power. Employment cuts following violations are much larger during industry and macroeconomic downturns, when employees have fewer alternative job opportunities and reduced bargaining power. Union elections that create new labor bargaining units lead to higher loan spreads, consistent with creditors requiring compensation for their reduced control rights when labor is stronger. Overall, these findings enrich our understanding of the consequences of the state contingent transfer of control rights by identifying a risk-shifting channel from creditors to employees. Our analysis establishes an endogeneity-free link between financing frictions and employment and offers direct evidence that binding financial covenants are an important amplification mechanism of economic downturns. |
| Keywords: | Covenant violations; employment |
| Date: | 2013–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-61&r=law |
| By: | Babatunde Buraimo; Giuseppe Migali; Robert Simmons |
| Abstract: | The literature on economics of corruption is lacking in evidence on consumer responses to identifiable scandals. The Calciopoli episode affecting Italian football in the 2005/06 season serves as an opportunity for an empirical investigation into consumer (fan) behaviour following punishments imposed by the Italian league on clubs whose officials were found guilty of corrupt practices. Using a difference-in-difference estimation method, where the convicted teams are the treatment group, we find that home attendances for treated teams fell by around 16%, relative to control group teams defined as those clubs not subject to league-imposed punishment. We show further that the fall in attendances identified with Calciopoli punishment resulted in non-trivial gate revenue reductions. Our results suggest that a sizeable number of fans of the punished clubs were subsequently deterred from supporting their teams inside the stadium. We explore alternative explanations of this adverse fan response. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:64473209&r=law |
| By: | Beatrice Scheubel |
| Abstract: | In countries with strong employment protection laws it is often considered to be unwise to hire a woman in childbearing age because she might get pregnant. However, such labour demand e ects of job protection measures related to maternity leave are often rather anecdotal. To provide analytical evidence, this paper studies the impact of changes in maternity-related job protection in Germany on employment opportunities for women in childbearing age without children for whom the observed e ects should be largely demand-related. Exogenous, discrete policy changes in the German labour market of the 1980s and 1990s constitute the setting for a difference-in-differences analysis of the transition into employment as well as wages. The data for this study are taken from the German Socio-Economic Panel and from the German Microcensus. Doubling the job-protected leave period from 6 months to 12 months between 1986 and 1988 led to an approximately 6% lower probability of being hired for women in childbearing age without a university degree.In addition, I nd a 5-10% increase in wages for women in childbearing age associated with the latter reform. Since this effect disappears when controlling for having a child in the future, this may indicate an increased need to signal commitment by increased effort after the reform. |
| Keywords: | Maternity leave legislation, gender pay gap, education, unemployment, difference-in-differences with group-correlated errors, quasi-natural experiment |
| JEL: | J64 J18 J16 J31 K31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp685&r=law |