nep-law New Economics Papers
on Law and Economics
Issue of 2019‒08‒26
six papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Does Locked Up Mean Locked Out? The Effects of the Anti-Drug Act of 1986 on Black Male Students’ College Enrollment. Working Paper #101-19 By Britton, Tolani
  2. Cigarette Prices and Driving Fatalities Among Youths By Vinish Shrestha
  3. Adoption of CSR and Sustainability Reporting Standards: Economic Analysis and Review By Hans B. Christensen; Luzi Hail; Christian Leuz
  4. Guiding Principles in Setting Cartel Sanctions By Marcel Boyer; Anne Catherine Faye; Éric Gravel; Rachidi Kotchoni
  5. Moral Hazard and the Property Rights Approach to the Theory of the Firm By Schmitz, Patrick W.
  6. The impact of Foreign Direct Investment and the institutional quality on Welfare in Latin America and Sub-saharan Africa By Aloui, Zouhaier

  1. By: Britton, Tolani
    Abstract: This paper explores one reason for the educational gaps experienced by Black men. Using variation in state marijuana possession and distribution laws, this paper examines whether the Anti-Drug Act of 1986, which increased the disproportionate incarceration of Black males, also led to differences in college enrollment rates. The results suggest that Black males had a 2.2% point decrease in the relative probability of college enrollment after the passage of the Anti-Drug Abuse Act of 1986. There is some evidence that laws around crack cocaine, and not marijuana, led to this decrease in the probability of enrollment.
    Keywords: Social and Behavioral Sciences, CRIMINAL JUSTICE, EDUCATION, GENDER AND RACE
    Date: 2019–04–01
  2. By: Vinish Shrestha (Department of Economics, Towson University)
    Abstract: Deaths from motor vehicle crashes are a leading cause of unintentional deaths in the United States. This paper investigates the effect of increases in cigarette taxes and prices following the Master Settlement Agreement (MSA) on non-alcohol and alcohol-related motor vehicle fatalities among youths. I find that increases in cigarette taxes and prices are associated with a reduction in non-alcohol related accidents between 1998 and 2006 among 16-to-20 year olds.
    Keywords: Cigarette Taxes and Prices, Driving Fatalities, Externalities.
    JEL: I10 I12 I18
    Date: 2019–08
  3. By: Hans B. Christensen; Luzi Hail; Christian Leuz
    Abstract: This study provides an economic analysis of the determinants and consequences of corporate social responsibility (CSR) and sustainability reporting. To frame our analysis, we consider a widespread mandatory adoption of CSR reporting standards in the United States. The study focuses on the economic effects of standards for disclosure and reporting, not on the effects of CSR activities and policies themselves. It draws on an extensive review of the relevant academic (CSR and non-CSR) literatures in accounting, economics, finance, and management. Based on a discussion of the fundamental economic forces at play and the key features and determinants of (voluntary) CSR reporting, we derive and evaluate possible economic consequences, including capital-market effects for select stakeholders as well as potential firm responses and real effects in firm behavior. We also highlight issues related to the implementation and enforcement of CSR reporting standards. Our analysis yields a number of insights that are relevant to the current debate on CSR and sustainability reporting and provides scholars with avenues for future research.
    JEL: F30 G30 G38 K22 L21 M14 M41 M48
    Date: 2019–08
  4. By: Marcel Boyer; Anne Catherine Faye; Éric Gravel; Rachidi Kotchoni
    Abstract: We discuss various theoretical and empirical hurdles that antitrust authorities and courts must overcome to determine appropriate cartel sanctions, namely regarding the probability of detection, cartel dynamics, cartel duration, and cartel overcharge. Nous discutons les enjeux et embûches théoriques et empiriques auxquels les autorités de concurrence et les tribunaux font face pour sanctionner les cartels, à savoir la probabilité de détection, la dynamique de cartel, la durée de l’impact et le surprix.
    Keywords: Cartels,Fines,Competition Policy,Antitrust, Cartels,Amendes,Politique de concurrence,Antitrust
    Date: 2019–08–16
  5. By: Schmitz, Patrick W.
    Abstract: In the Grossman-Hart-Moore property rights theory, there are no frictions ex post (i.e., after non-contractible investments have been sunk). In contrast, in transaction cost economics ex-post frictions play a central role. In this note, we bring the property rights theory closer to transaction cost economics by allowing for ex-post moral hazard. As a consequence, central conclusions of the Grossman-Hart-Moore theory may be overturned. In particular, even though only party A has to make an investment decision, B-ownership can yield higher investment incentives. Moreover, ownership matters even when investments are fully relationship-specific (i.e., when they have no impact on the parties' disagreement payoffs).
    Keywords: Incomplete Contracts; Investment incentives; moral hazard; Ownership rights; relationship specificity
    JEL: D23 D86 G34 L23 L24
    Date: 2019–07
  6. By: Aloui, Zouhaier
    Abstract: This article examines the impact of foreign direct investment (FDI) and institutional quality on well-being in Latin American and sub-Saharan African countries between 1996-2014. We use as key variables FDI, indicators of institutional quality (control of corruption and the rule of law) and the Human Development Index (HDI) as the main variables. Our analyzes confirm the positive and significant relationship between FDI and well-being in Latin America. Although the rule of law has been established to improve well-being. This result shows that legal variables of institutional quality play an important role in improving well-being. Nevertheless, this relationship between FDI, institutional quality and well-being is significantly different between Latin America and sub-Saharan Africa. So legal indicators create a positive effect on well-being. This study shows that institutional quality indicators attack well-being in the Latin American region. In addition, the quality of institutions and the strengthening of governance tend to amplify the positive effects on well-being in the region. The result of the regression confirms the positive links between FDI, institutional quality and improved well-being. Regarding the impact of FDI and institutional quality on well-being, FDI and the rule of law have more impact on improving well-being in Latin American countries than in sub-Saharan African countries.
    Keywords: Foreign Direct Investment, Institutions, Welfare, Latin America, Sub-Saharan Africa.
    JEL: F21 I31 K23
    Date: 2019–08–09

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