nep-law New Economics Papers
on Law and Economics
Issue of 2017‒10‒08
eleven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The Effect of Competition Law on Brunei’s Small and Medium Enterprises By Michael, Bryane
  2. An Evolutionary Analysis of the Assignment of Property Rights By Atsushi Tsuneki
  3. The Inner Workings of the Board: Evidence from Emerging Markets By de Haas, Ralph; Ferreira, Daniel; Kirchmaier, Tom
  4. Jobs, News and Re-offending after Incarceration By Galbiati, Roberto; Ouss, Aurélie; Philippe, Arnaud
  5. The Use of Electronic Medical Records as Evidence in the Criminal Process in Indonesia By Anny Retnowati
  6. Emotions in Civil Litigation By Ben Chen; Jose A. Rodrigues Neto
  7. Kwangju Incident and Role of the Judiciary in South Korea By Muhammad Ramzan
  8. Incarcerate one to calm the others? Spillover effects of incarceration among criminal groups By Philippe, Arnaud
  9. Settling the Staggered Board Debate By Amihud, Yakov; Schmid, Markus; Davidoff Solomon, Steven
  10. "Settling Inconsistencies Associated with The Genesis of The Financial Services Authority Act" By Theresia Anita Christiani
  11. Disentangling Crowdfunding from Fraudfunding By Karami, Moein; Cumming, Douglas; Hornuf, Lars; Schweizer, Denis

  1. By: Michael, Bryane
    Abstract: Brunei must enact an effective competition policy in order to participate as a member in regional trading blocs like the APEC, ASEAN and the Trans-Pacific Partnership. What effect would Brunei’s Competition Order have on Brunei – and specifically its small and medium enterprises or SMEs (the motor of non-petrol led growth)? We develop an indication of the scope of competition policy – and use that indicator in cross-country analysis to figure out competition’s effect on Brunei’s SMEs. Using back-of-the-envelope calculation methods, increasing competition under the status quo would likely cost Brunei US$100 million. Yet, if serious innovation policy tags along with Brunei’s expanding competition policy, Brunei’s SMEs could experience a $10 billion jump in GDP. Without policies to boost the effectiveness of the US$1.5 billion in Wawasan innovation spending, increased competition could harm Brunei’s SMEs. We identify the lack of Competition Commission independence and information dissemination.
    Keywords: antitrust,Brunei,competition policy,Competition Order
    JEL: K21 L44
    Date: 2017
  2. By: Atsushi Tsuneki
    Abstract: We develop an evolutionary game model to reveal the theoretical basis for the assignment of property right, where both plaintiff and defendant argue for their rights by claiming their reliance investment. We allow for the possibility that the value of the total product depend not only on the investment conferred by the owner but also on the reliance investment provided by the trespasser. The resulting evolutionary stable set of preferences shows that the endowment effect hardwired to the owners and trespassers depends on the difference of productivities among both parties and the density of owners within the population.
  3. By: de Haas, Ralph; Ferreira, Daniel; Kirchmaier, Tom
    Abstract: We survey non-executive directors in emerging markets to obtain detailed information about the inner workings of corporate boards across a variety of institutional settings. We document substantial variation in the structure and conduct of boards as well as in directors' perceptions about the local legal environment. Further analysis indicates that directors who feel adequately empowered by local legislation are less likely to actively vote against board proposals. They also form boards that play a stronger role in the company's strategic decision-making. This suggests that a supportive legal environment allows directors to focus more on their advisory, as opposed to their monitoring, role.
    Keywords: Boards of directors; corporate governance; emerging markets
    JEL: G30 G38 K22
    Date: 2017–09
  4. By: Galbiati, Roberto; Ouss, Aurélie; Philippe, Arnaud
    Abstract: We study how local labor market conditions and information about jobs affect recidivism among former inmates. Our identification strategy exploits daily variations on new job vacancies and news coverage of job openings and closings at the county level, merged with individual-level administrative data on inmates released from French prisons. Overall job creations do not affect recidivism, but inmates released when more jobs in manufacturing are created are less likely to recidivate. We also show that media coverage of job creation reduces recidivism, beyond actual employment opportunities, suggesting implications for crime-control policies: information about employment contributes to reduce recidivism.
    Date: 2017–09
  5. By: Anny Retnowati (Faculty of Law, Universitas Atmajaya Yogyakarta, Indonesia)
    Abstract: "Objective – This article deals with the prospective use of electronic medical records as instruments of evidence in criminal procedural law in Indonesia. In particular, this article concerns the usefulness of these records in criminal cases. Methodology/Technique – This article applies doctrinal research involving a consideration of the relevant legal norms. Hence, a qualitative method is used to analysis the relevant data. Findings – The study suggests the legal basis in article 184 of the KUHAP should be revised by adding electronic evidence so that the use of electronic medical records can be used as evidence in the criminal process in Indonesia. Novelty – The study tries to provide ways to enhance the evidencing in criminal process."
    Keywords: Electronic Medical Record; Criminal Process; Evidence; Indonesia.
    JEL: K14 O33
    Date: 2017–02–06
  6. By: Ben Chen; Jose A. Rodrigues Neto
    Abstract: In a civil-litigation game, monetary and emotional variables motivate a plaintiff and a defendant simultaneously to exert costly efforts; the emotional variables capture their relational emotions toward each other, and a non-monetary joy of winning. Based on the litigants’ efforts and exogenous relative advantages, a generally-formulated success function gives their probabilities of success. A cost-shifting rule shifts a proportion of the winner’s costs to the loser. In equilibrium, negative relational emotions (but not positive joy of winning) amplify the effects of cost shifting. Negative relational emotions increase the equilibrium relative effort and probability of success of the more advantageous litigant.
    Keywords: relative payoffs, non-monetary joy of winning, interdependent preferences, litigation, contest theory
    JEL: C72 C79 D91 K41
    Date: 2017–10
  7. By: Muhammad Ramzan (College of Business Administration, Alyamamah University, Kingdom of Saudi Arabia.)
    Abstract: "Objective – The Constitutional Court of South Korea (‘the Court’) is the guardian of the constitution and has jurisdiction to decide cases concerning potential violations of the constitution. In the Kwangju incident, innocent citizens were murdered and injured while they were protesting against the military government. Their demand was to be provided the basic rights which are granted by the constitution of South Korea, as well as seeking democracy in the country. This paper analyses the judgment of the Court and observations of the judges. Further, it discusses the effects of the judgment on legislation, as well as analysing the situation involved in deciding the case in which unconstitutional actions of the military government were declared inhumane. Methodology/Technique – The research reviews articles in related area. Findings – Through this judgement, the Court played a major role in strengthening the constitution and democracy, through the way in which it reached a conclusion in the Kwangju incident case. The Court suggested the legislator should introduce new legislation to remove the latches of the case. Novelty – The study intends to learn the effects of the judgement on South Korean legislation."
    Keywords: Kwangju Incident; Special-Legislation; Justice System; Democratization Movement.
    JEL: K10 K14
    Date: 2017–04–19
  8. By: Philippe, Arnaud
    Abstract: This paper documents the effect of peers’ incarceration on an individual’s criminal activity within small criminal groups. Using established criminal groups, I built a 48-month panel that records the criminal status, Individual imprisonment status and imprisonment status of group members. Panel regressions with individual fixed effects allows me to document five facts. First, the incarceration of a peer is associated with a 5 per cent decrease in the arrest rate among groups composed of two persons. No effect is observed among bigger groups. Second, this effect is present even for incarceration following lone crimes, ruling out an explanation based on common shocks. Third, the probability of committing a group crime strongly decreases, and there is no shift to crime with other peers or lone crimes. Four, this general effect hides significant within-group heterogeneity. The results are consistent with the idea that ‘leaders’ are not affected by the incarceration of ‘followers’. Five, the effect seems to be driven by lower risky behaviour among offenders who remain free, and not by ‘criminal capital’ loss or deterrence.
    Date: 2017–09
  9. By: Amihud, Yakov; Schmid, Markus; Davidoff Solomon, Steven
    Abstract: We address the heated debate over the staggered board. One theory claims that a staggered board facilitates entrenchment of inefficient management and thus harms corporate value. Consequently, some institutional investors and shareholder rights advocates have argued for the elimination of the staggered board. The opposite theory is that staggered boards are value enhancing since they enable the board to focus on long-term goals. Both theories are supported by prior and conflicting studies and theoretical law review articles. We show that neither theory has empirical support and on average, a staggered board has no significant effect on firm value. Prior studies did not include important explanatory variables in their analysis or account for the changing nature of the firm over time. When we correct for these issues in a sample of up to 2,961 firms from 1990 to 2013 we find that the effect of a staggered board on firm value becomes statistically insignificant after controlling for variables that affect both value and the incidence of a staggered board. Notably, we find that the adoption of a staggered board, its retention, and its removal are not random and exogenous but are rather endogenous, being related to firm characteristics and performance. The effect of a staggered board is idiosyncratic; for some firms it increases value, while for other firms it is value destroying. Our results suggest caution about legal solutions which advocate wholesale adoption or repeal of the staggered board and instead point to an individualized firm approach.
    Date: 2017–09
  10. By: Theresia Anita Christiani (Universitas Atma Jaya Yogyakarta, Indonesia. Author-2-Name: Maria Hutapea Author-2-Workplace-Name: Universitas Atma Jaya Yogyakarta, Indonesia.)
    Abstract: "Objective – The FSA Act the establishment of which is mandated by Article 34 of Law No. 23 of 1999 concerning the Bank of Indonesia, was enacted on 22 November 2011. This Act, together with Law No. 3 of 2004, regulates and supervises Indonesia’s integrated financial services sector. This article reveals the existence of inconsistencies between the legal terms underlying the establishment of the FSA one the one hand, and the provisions contained in the Financial Service Authority itself, on the other. These inconsistencies also become evident in the light of the 1945 Constitution which facilitated the establishment of the Bank of Indonesia Law. The purpose of this article is to ascertain a method of resolving these inconsistencies associated with the genesis of the Financial Service Authority. Methodology/Technique – The research method used in this article is doctrinal in nature that uses secondary data and information sources as material to analyse the relevant problems. Findings – The research has revealed that the most appropriate method of settling these inconsistencies requires a consideration of the express wording of the FSA. Novelty – This article indicates the need to apply legal principles rather and adjudicatory methods."
    Keywords: Settlement; Banking; Legal; Principle; Law.
    JEL: J21 J28 K23
    Date: 2017–03–23
  11. By: Karami, Moein; Cumming, Douglas; Hornuf, Lars; Schweizer, Denis
    Abstract: Using Kickstarter and Indiegogo, the two largest crowdfunding platforms, we conduct an exhaustive search of all fraud cases from 2010 through 2015. We present evidence that fraudsters in crowdfunding markets have specific characteristics: they are less likely to have engaged in prior crowdfunding activities, they are less likely to have a social media presence, and they are more likely to provide poorly worded and confusing campaign pitches.
    JEL: G21 G24 G32 K22 L26
    Date: 2017

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