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on Law and Economics |
| By: | Calamunci, Francesca; Drago, Francesco |
| Abstract: | We analyze the economic consequences on firm profitability, performance, and investments of having another firm in the same market affiliated with a criminal organization. We do so by evaluating the spillover effects of a law providing the judicial administration of organized crime firms through the imposition of external managers in order to remove the connection to the criminal organization, and at the same time guarantee the continuity of production. By using detailed information on more than 180,000 companies, we exploit the firms' yearly variation in the exposure to criminal firms' judicial administration in their market (in the same province and industry). The empirical design allows us to control for confounding effects at the firm, market, and year levels. The results show that there is a large, positive spillover from the enforcement law, suggesting that the burden the organized crime firms impose on other firms is very large. Firms' performance and turnover increases by 2.2 and 0.7 percent, respectively, in the first four years after an organized crime firm enters the status of judicial administration. Investments measured by tangible and intangible assets increase with the number of firms entering into judicial administration by 0.75 percent. These results suggest that intensifying confiscation measures against criminal organizations has a strong positive effect on the economy. |
| Keywords: | event study analysis; organized crime; public policy evaluation |
| JEL: | H00 H32 J00 K14 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14326&r=all |
| By: | Battaglini, Marco; Harris, Jorgen; Patacchini, Eleonora |
| Abstract: | We examine the effect of hearing cases alongside female judicial colleagues on the probability that a federal judge hires a female law clerk. Federal judges are assigned to cases and to judicial panels at random and have few limitations on their choices of law clerks: these two features make the federal court system a unique environment in which to study the effect of professional interactions and beliefs in organizations. We constructed a unique dataset by aggregating federal case records from 2007-2017 to collect information on federal judicial panels, and by merging this data with judicial hiring information from the Judicial Yellow Book, a directory of federal judges and clerks. We find that a one standard deviation increase in the fraction of co-panelists who are female increases a judge's likelihood of hiring a female clerk by 4 percentage points. This finding suggests that increases in the diversity of the upper rungs of a profession can shift attitudes in a way that creates opportunities at the entry level of a profession. |
| Keywords: | discrimination; Economics of gender; Labor Force Composition |
| JEL: | J16 J71 J82 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14370&r=all |
| By: | Carletti, Elena; Ongena, Steven; Siedlarek, Jan-Peter; Spagnolo, Giancarlo |
| Abstract: | The effect of regulations on the banking sector is a key question for financial intermediation. This paper provides evidence that merger control regulation, although not directly targeted at the banking sector, has substantial economic effects on bank mergers. Based on an extensive sample of European countries, we show that target announcement premia increased by up to 16 percentage points for mergers involving control shifts after changes in merger legislation, consistent with a market expectation of increased profitability. These effects go hand-in-hand with a reduction in the propensity for mergers to create banks that are too-big-to-fail in their country. |
| Keywords: | Antitrust; banks; Merger Control; mergers and acquisitions; regulation |
| JEL: | G21 G34 K21 L40 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14449&r=all |
| By: | Rodríguez-Pose, Andrés; Zhang, Min |
| Abstract: | Does the variation in the quality of local government institutions affect the capacity of firms to innovate? This paper uses a unique dataset that combines the specific features of 2,700 firms with the institutional and socioeconomic characteristics of the 25 cities in China where they operate, in order to assess the extent to which institutional quality -- measured across four dimensions: rule of law, government effectiveness, corruption, and regulatory quality -- affects both the innovation probability and intensity of firms. The results of the econometric analysis show that poor institutional quality in urban China is an important barrier for firm-level innovation. In particular, a deficient rule of law, high corruption, and a weak regulatory quality strongly undermine firm-level innovation. The role of these factors is far more limited in the case of innovation intensity. Better institutions also reduce the amount of time firms spend dealing with government regulations in order to facilitate innovation. The results also indicate that the cost of weak institutions for innovation is higher for private than for state-owned firms, at least in the early stages of innovation. In general, differences in institutional quality generate local urban ecosystems that impinge on the propensity of firms to innovate. |
| Keywords: | China; cities; firms; Government quality; Innovation; institutions |
| JEL: | H1 O3 O31 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14399&r=all |
| By: | Naomi R. Lamoreaux; John Joseph Wallis |
| Abstract: | Before the middle of the nineteenth century most laws enacted in the United States were special bills that granted favors to specific individuals, groups, or localities. This fundamentally inegalitarian system provided political elites with important tools that they could use to reward supporters, and as a result, they were only willing to modify it under very special circumstances. In the early 1840s, however, a major fiscal crisis forced a number of states to default on their bonded debt, unleashing a political earthquake that swept this system away. Starting with Indiana in 1851, states revised their constitutions to ban the most common types of special legislation and, at the same time, mandate that all laws be general in their application. These provisions dramatically changed the way government and the economy worked and interacted, giving rise to the modern regulatory state, interest-group politics, and a more dynamic form of capitalism. |
| JEL: | K1 K2 N4 N41 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27400&r=all |
| By: | Dimitrova, Darina |
| Abstract: | The paper examines the administrative law aspects of the legal relations between the regional governor and the Council of Ministers as the central body of the Executive. It clarifies the role of the regional governor as a local body of the Executive implementing the State’s policy. On the basis of this analysis the author draws conclusions and makes generalizations of theoretical and practical value. |
| Keywords: | Council of Ministers; Regional Governor; the Executive. |
| JEL: | K23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101043&r=all |
| By: | Tanai Khiaonarong; Terry Goh |
| Abstract: | Financial technology (Fintech) has prompted authorities to consider their potential financial stability benefits, risks, and effective regulation. Recent developments suggest that regulatory approaches and their legal foundations need to augment entity-based regulation with increasing focus on activities and risks as market structure changes. This paper draws on recent international experiences in modernizing legal and regulatory frameworks for payment services. An analytical framework based on a four-step process is proposed—(i) identifying payment activities; (ii) licensing entities and designating systems; (iii) analyzing and managing risks, and (iv) promoting legal certainty. As payment activities evolve and potential systemic risks heighten, adherence to international standards and additional regulatory requirements should be warranted. |
| Date: | 2020–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:20/75&r=all |
| By: | Kwadwo Osei Bonsu; Shoucan Chen |
| Abstract: | Economic theory has provided an estimable intuition in understanding the perplexing ideologies in law, in the areas of economic law, tort law, contract law, procedural law and many others. Most legal systems require the parties involved in a legal dispute to exchange information through a process called discovery. The purpose is to reduce the relative optimisms developed by asymmetric information between the parties. Like a head or tail phenomenon in stochastic processes, uncertainty in the adjudication affects the decisions of the parties in a legal negotiation. This paper therefore applies the principles of aleatory analysis to determine how negotiations fail in the legal process, introduce the axiological concept of optimal transaction cost and formulates a numerical methodology based on backwards induction and stochastic options pricing economics in estimating the reasonable and fair bargain in order to induce settlements thereby increasing efficiency and reducing social costs. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.11061&r=all |
| By: | Azmat, Ghazala Y.; Cuñat, Vicente; Henry, Emeric |
| Abstract: | Using a nationally representative longitudinal survey of lawyers in the U.S., we document a sizeable gap between men and women in their early aspirations to become law firm partners, despite similar early investments and educational characteristics. This aspiration gap can explain a large part of the gender promotion gap that is observed later. We propose a model to understand the role of aspirations and then empirically test its predictions. We show that aspirations create incentives to exert effort and are correlated with expectations of success and the preference for becoming a partner. We further show that aspirations are affected by early work experiences - facing harassment or demeaning comments early in the career affects long-term promotion outcomes mediated via aspirations. Our research highlights the importance of accounting for, and managing, career aspirations as an early intervention to close gender career gaps. |
| Keywords: | career aspirations; gender gaps; Promotion |
| JEL: | J16 J44 K40 M51 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14311&r=all |
| By: | Luigi Alberto Franzoni |
| Abstract: | The standardisation of trade secret protection was one of the goals of the TRIPs Agreement of 1998. Nevertheless, substantial differences in this protection remain across jurisdictions. When defining the optimal scope of trade secrets law, lawmakers should be aware that strong trade secret protection is likely to promote inventiveness, but it is also likely to hinder the diffusion of knowledge and prevent competition. |
| JEL: | K0 L1 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1150&r=all |
| By: | Payne, Jason Leslie (Australian National University); Morgan, Anthony |
| Abstract: | At the time of writing, there was 3.4 million confirmed cases of COVID-19 and more than 300,000 deaths worldwide. Not since the Spanish Flu in 1918 has the world experienced such a widespread pandemic and this has motivated many countries across globe to take unprecedented actions in an effort to curb the spread and impact of the SARS-CoV-2 virus. Among these government and regulatory interventions includes stringent domestic and international travel restrictions as well as a raft of stay-at-home and social distancing regulations. The scale of these containment measures has left criminologists wondering what impact this will have on crime in both the short- and long-term. In this study, we examine officially recorded property crime rates for March, 2020, as reported for the state of Queensland, Australia. We use ARIMA modeling techniques to compute six-month-ahead forecasts of property damage, shop theft, other theft, burglary, fraud, and motor vehicle theft rates and then compare these forecasts (and their 95% confidence intervals) with the observed data for March 2020. We conclude that the observed rates of reported property offending across Queensland were significantly lower than expected for shop theft, other theft and credit-card fraud but statistically unchanged for property damage, burglary, and motor-vehicle theft. |
| Date: | 2020–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:de9nc&r=all |