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on Law and Economics |
| By: | Bignon, Vincent (Bank of France); Caroli, Eve (Université Paris-Dauphine); Galbiati, Roberto (CNRS) |
| Abstract: | Using local administrative data from 1826 to 1936, we document the evolution of crime rates in 19th century France and we estimate the impact of a negative income shock on crime. Our identification strategy exploits the phylloxera crisis. Between 1863 and 1890, phylloxera destroyed about 40% of French vineyards. We use the geographical variation in the timing of this shock to identify its impact on property and violent crime rates, as well as minor offences. Our estimates suggest that the phylloxera crisis caused a substantial increase in property crime rates and a significant decrease in violent crimes. |
| Keywords: | crime, income shock, phylloxera, 19th century France |
| JEL: | K42 N33 R11 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8531&r=law |
| By: | Legree, Scott; Schirle, Tammy; Skuterud, Mikal |
| Abstract: | We provide evidence on the potential for reforms in labour law to reverse deunionization trends by relating an index of the favorability to unions of Canadian provincial labour relations statutes to changes in provincial union density rates between 1981 and 2012. The results suggest that shifting every province’s 2012 legal regime to the most union-friendly possible could raise the national union density by up to 7 percentage points in the long run. This effect appears driven by regulations related to the certification of new bargaining units, the negotiation of first contracts and the recruitment of replacement workers. The effects of reform are largest for women, particularly university-educated women employed as professionals in public services. Overall, the results suggest a limited potential for labour relations reforms to address growing concerns about labour market inequality. |
| Keywords: | Labour relations legislation, union density rates, union-management relations |
| JEL: | J50 J58 K31 |
| Date: | 2014–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-42&r=law |
| By: | Cremers, Katrin; Gaessler, Fabian; Harhoff, Dietmar; Helmers, Christian |
| Abstract: | We analyze the impact of the probabilistic nature of patents on the functioning of Germany's bifurcated patent litigation system where infringement and validity of a patent are decided independently by different courts. We show that bifurcation creates situations in which a patent is held infringed that is subsequently invalidated. Our conservative estimates indicate that 12% of infringement cases in which the patent's validity is challenged produce such 'invalid but infringed' decisions. We also show that having to challenge a patent's validity in separate court proceedings means that more resource-constrained alleged infringers are less likely to do so. We find evidence that 'invalid but infringed' decisions create uncertainty which firms that were found to infringe an invalid patent attempt to reduce by filing more oppositions against newly granted patents immediately afterwards. |
| Keywords: | Litigation,innovation,patents,bifurcation,Germany |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14072&r=law |
| By: | Timothy W. Guinnane; Ron Harris; Naomi R. Lamoreaux |
| Abstract: | British general incorporation law granted companies an extraordinary degree of contractual freedom to craft their own governance rules. In this paper we study the uses to which this flexibility was put by examining the articles of association written by three samples of companies from the late nineteenth and early twentieth centuries. We find that incorporators consistently wrote rules that shifted power from shareholders to directors, that the extent of this shift became greater over time, and that Parliament made little effort to restrain it. Although large firms were less likely to enact the most extreme provisions, such as entrenching specific directors for life, they too wrote articles that gave managers essentially unchecked power. These findings have implications for the literature on corporate control, for the "law-and-finance" argument that the common law was more conducive to financial development than the code-based systems of civil law countries, and for the debate on entrepreneurial failure in Britain during the late nineteenth and early twentieth centuries. |
| JEL: | G3 K22 N23 N24 N43 N44 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20481&r=law |
| By: | Franke, Benedikt; Simons, Dirk; Voeller, Dennis |
| Abstract: | Employment tax credit programs have been repeatedly used during economic crises, although their usefulness is empirically contestable. The objective of this paper is to quantify the tax effects of employment tax credit programs. A recent revision of the German inheritance tax law provides an eminent opportunity to analyze the effects caused by such a preferential treatment. The tax liability depends on a company's future employment expenses. Hence, we use micro-level data of realized business transfers from the German Inheritance Tax Statistic and combine them with a simulation of the future development of employment over the relevant time-horizon. We identify the magnitude of tax reductions granted to business transfers under a preferential treatment. Further, we demonstrate that these reductions are considerably larger in times of economic growth. Our findings also suggest that employment tax credits have pro-cyclical effects and specifically foster transfers between unrelated parties. Finally, the preferential treatment of business transfers does not provide incentives to increase employment. |
| Keywords: | Alternative tax treatments,Employment tax credits,Inheritance tax,Simulation |
| JEL: | C15 H30 K34 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:177&r=law |
| By: | Stefan Borsky; Esther Blanco |
| Abstract: | This article addresses the mediating effect of corruption on the influence of stringency of environmental regulation on firms' voluntary environmental performance. Using panel data from adoption of the EU Eco-Management and Audit Scheme (EMAS) across European Union countries from 1995 to 2011, we unveil a direct and an interacting effect of countries' corruption and regulatory stringency on the rate of adoption. First, stricter environmental regulation reduces the rate of EMAS certificates, thus supporting a crowding-out effect of mandatory regulation on voluntary action. Second, increased corruption reduces the rate of EMAS certificates. Third, the negative effect of stringency of regulation on EMAS certification rates is reinforced by corruption. In sum, these results suggest that previous studies address- ing the implications from stricter regulations on firms' voluntary action that abstract from corruption might underestimate the potential negative effect of stringency of regulation on firms' voluntary action. |
| Keywords: | Voluntary environmental action, environmental taxes, corruption, negative binomial regression |
| JEL: | F53 Q23 Q27 F18 L15 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2014-29&r=law |
| By: | Tröger, Tobias H. |
| Abstract: | This essay argues that at least some of the financial stability concerns associated with shadow banking can be addressed by an approach to financial regulation that imports its functional foundations more vigorously into the interpretation and implementation of existing rules. It shows that the general policy goals of prudential banking regulation remain constant over time despite dramatic transformations in the financial and technological landscape. Moreover, these overarching policy goals also legitimize intervention in the shadow banking sector. On these grounds, this essay encourages a more normative construction of available rules that potentially limits both the scope for regulatory arbitrage and the need for ever more rapid updates and a constant increase in the complexity of the regulatory framework. By tying the regulatory treatment of financial innovation closely to existing prudential rules and their underlying policy rationales, the proposed approach potentially ends the socially wasteful race between hare and tortoise that signifies the relation between regulators and a highly dynamic industry. In doing so it does not generally hamper market participants' efficient discoveries where disintermediation proves socially beneficial. Instead, it only weeds-out rent-seeking circumventions of existing rules and standards. |
| Keywords: | shadow banking,regulatory arbitrage,prudential supervision |
| JEL: | G21 G28 H77 K22 K23 L22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imfswp:83&r=law |
| By: | Ralph-C Bayer (School of Economics, University of Adelaide) |
| Abstract: | Traditional micro-lending schemes suffer from high transaction costs relative to the loan size, which renders many small loans uneconomical. This paper proposes an alternative lending protocol with lower transaction costs and shows that in theory repayment rates are not compromised. We then use laboratory experiments to confirm this finding. Finally we conclude that our lending protocol if implemented could improve social welfare by reducing transaction cost. |
| Keywords: | micro nance, group lending, group liability, joint liability. |
| JEL: | C70 C92 D71 D82 O12 O16 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2013-23&r=law |
| By: | Olmstead, Sheila (Resources for the Future); Richardson, Nathan (Resources for the Future) |
| Abstract: | Booming production of oil and gas from shale, enabled by hydraulic fracturing technology, has led to tension between hoped-for economic benefits and feared environmental and other costs, with great associated controversy. Study of how policy can best react to these challenges and how it can balance risk and reward has focused on prescriptive regulatory responses and, to a somewhat lesser extent, voluntary industry best practices. While there is undoubtedly room for improved regulation, innovative tools are relatively understudied. The liability system predates environmental regulation yet still plays an important—and in some senses predominant—role. Changes to that system, including burden-shifting rules and increased bond requirements, might improve outcomes. Similarly, new regulation can and should incorporate modern understanding of the benefits of market-based approaches. Information disclosure requirements can benefit the liability system and have independent benefits of their own. Policymakers faced with a need for policy change in reaction to shale development should carefully consider alternatives to regulation and, when regulation is deemed necessary, consider which tool is best suited. |
| Keywords: | shale, shale gas, liability, market-based tools, burden shifting, information |
| Date: | 2014–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-15&r=law |