nep-law New Economics Papers
on Law and Economics
Issue of 2021‒08‒16
sixteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Mediation Procedure in Case of Crime of Preventing the Freedom to Practice Religion By Nicoleta-Elena Heghes
  2. The Effect of 3.6 Million Refugees on Crime By Murat Guray Kirdar; Ivan Lopez Cruz; Betul Turkum
  3. Assaults during Lockdown in NSW and Victoria By Moslehi, Solmaz; Parasnis, Jaai; Tani, Massimiliano; Vejayaratnam, Josephina
  4. Treatment of Intellectual Property License in Insolvency: Analysing Indian law in comparison with the U.S. and U K By Ram Mohan, M.P.; Gupta, Aditya
  5. Is Recreational Marijuana a Gateway to Harder Drug Use and Crime? By Joseph J. Sabia; Dhaval M. Dave; Fawaz Alotaibi; Daniel I. Rees
  6. Local government and innovation: The case of Italian provinces By Fortuna Casoria; Marianna Marino; Pierpaolo Parrotta; Davide Sala
  7. A Brief History of the U.S. Regulatory Perimeter By Katherine Di Lucido; Nicholas K. Tabor; Jeffery Y. Zhang
  8. Cross-border Data Regulation for Digital Platforms: Data Privacy and Security By Serzo, Aiken Larisa O.
  9. Systemic Discrimination among Large U.S. Employers By Kline, Patrick; Rose, Evan K.; Walters, Christopher R.
  10. Shifting Punishment on Minorities: Experimental Evidence of Scapegoating By Bauer, Michal; Cahlíková, Jana; Chytilová, Julie; Roland, Gerald
  12. Non-compliance with temporary agency work regulations: Initial evidence from Germany By Ganserer, Angelika
  13. Legislative and Jurisprudential Considerations Regarding the Restriction of the Free Movement of Goods on the EU Internal Market from the Viewpoint of Public Health Protection By Cristina-Luiza Erimia
  14. Measuring Multidimensional Labour Law Violation with an Application to South Africa By Haroon Bhorat; Ravi Kanbur; Benjamin Stanwix; Amy Thornton
  15. Size Matters: Corruption Perceptions versus Corruption Experiences by Firms By Rajeev K. Goel; Ummad Mazhar; Rati Ram
  16. Data-driven mergers and personalization By Zhijun Chen; Chongwoo Choe; Jiajia Cong; Noriaki Matsushima

  1. By: Nicoleta-Elena Heghes (Dimitrie Cantemir Christian University of Bucharest, Romania)
    Abstract: In this article we intend to highlight the particularities of the mediation procedure in the case of crimes of preventing the freedom to practice religion provided in article 381 of the Romanian Criminal Code. Mediation applies in criminal cases concerning offenses for which, according to the law, the withdrawal of the prior complaint or the reconciliation of the parties removes the criminal liability. According to the Criminal Code in force, crime of preventing the freedom to practice religion is one of those crimes that are subject to mediation. Mediation includes two phases: the phase preceding the mediation procedure, in which the parties come to find out about the advantages of mediation. Once they have taken note of this, the parties shall decide whether or not to accept the mediation and shall send the invitation to mediation to the opposing party through the mediator. A second phase is the actual mediation, which can take place in a single session or more, being both joint sessions and separate sessions, depending on the will of the parties. The mediation procedure can be concluded by a mediation agreement, by denouncing the mediation contract or the failure of the mediation is ascertained.
    Keywords: religious freedom, crime, parties, prior complaint, criminal mediation
    Date: 2021–05
  2. By: Murat Guray Kirdar (Department of Economics, Boğaziçi University); Ivan Lopez Cruz (Faculty of Arts and Social Sciences, Sabanci University); Betul Turkum (Department of Economics, European Economic Institute)
    Abstract: Most studies examining the impact of migrants on crime rates in hosting populations are in the context of economic migrants in developed countries. However, we know much less about the crime impact of refugees in low- and middle-income countries—whose numbers are increasing worldwide. This study examines this issue in the context of the largest refugee group in any country—Syrian refugees in Turkey. Although these refugees are much poorer than the local population, have limited access to formal employment, and face partial mobility restrictions, we find that total crime per person (including natives and refugees) falls due to the arrival of the refugees. This finding also applies to several types of crime; the only exception is smuggling, which increases due to the population influx. We also show that the fall in crime does not result from tighter security; we find no evidence of a change in the number of armed forces (military and civil personnel) in the migrant-hosting regions.
    Keywords: refugees, refugees, crime, security, immigration-crime nexus, civil war.
    JEL: J15 K42 D74
    Date: 2021–08
  3. By: Moslehi, Solmaz (Monash University); Parasnis, Jaai (Monash University); Tani, Massimiliano (University of New South Wales); Vejayaratnam, Josephina (Monash University)
    Abstract: We study the relationship between Covid-19 lockdowns and domestic assaults in New South Wales and Victoria using police data on crime by Local Government Area over the period 2019-2020. We apply both Ordinary Least Squares and a fixed effect estimator, and find that domestic assaults decline during the lockdowns of 2020, but less than other types of assaults. As a result, there is a higher relative incidence of domestic assaults rather than an overall increase in crime. The results are robust to omitted variable bias based on Oster's (2019) test, and mimic Boman and Gallupe (2020) - a similar study carried out in the US.
    Keywords: domestic assault, COVID-19, lockdowns, crime
    JEL: I10 K42
    Date: 2021–07
  4. By: Ram Mohan, M.P.; Gupta, Aditya
    Abstract: A bankrupt debtor’s ability to escape unprofitable contracts, enshrined in Section 365 of the American Bankruptcy Code, is considered central to a successful reorganisation within Chapter 11. The ambit of this power and the consequence of its application has been the subject of unceasing legal and business controversy. Intellectual property licenses assumed the forefront of this controversy in 1985 when the Court of Appeals for the Fourth Circuit held that Section 365 includes a unilateral power to rescind an Intellectual Property License. Congress reacted to the Court’s decision by amending Section 365 and legislating specific protections for Intellectual Property Licensees. This paper explores the American jurisprudence on the treatment of intellectual property licenses during bankruptcy and examines them within the insolvency regimes of the United Kingdom and India. The study reveals an important legal deficiency: neither jurisdiction incorporates any explicit protections for Intellectual Property Licenses during bankruptcy. Further, we find no substantive provisions that deal with the treatment of ongoing contracts during Corporate Insolvency Resolution Proceedings in India and Administration in the UK. For India, this raises an important issue relating to the desirability of a resolution professional’s ability to interfere with pre-petition IP licensing agreements. The authors underline the importance of such interference and suggest amendments to the Indian insolvency regime to deal with intellectual property licenses during bankruptcy.
    Date: 2021–08–11
  5. By: Joseph J. Sabia; Dhaval M. Dave; Fawaz Alotaibi; Daniel I. Rees
    Abstract: Recreational marijuana laws (RMLs), which legalize the possession of small quantities of marijuana for recreational use, have been adopted by 18 states and the District of Columbia. Opponents argue that RML-induced increases in marijuana consumption will serve as a “gateway” to harder drug use and crime. Using data covering the period 2000-2019 from a variety of national sources (the National Survey of Drug Use and Health, the Uniform Crime Reports, the National Vital Statistics System, and the Treatment Episode Data Set) this study is the first to comprehensively examine the effects of legalizing recreational marijuana on hard drug use, arrests, drug overdose deaths, suicides, and treatment admissions. Our analyses show that RMLs increase adult marijuana use and reduce drug-related arrests over an average post-legalization window of three to four years. There is little evidence to suggest that RML-induced increases in marijuana consumption encourage the use of harder substances or violent criminal activity.
    JEL: I12 I18 K14
    Date: 2021–07
  6. By: Fortuna Casoria (University of Lyon); Marianna Marino (SKEMA Business School); Pierpaolo Parrotta (IESEG School of Management); Davide Sala (University of Passau)
    Abstract: This paper exploits quasi-natural experiments associated with three waves of reforms occurred in Italy in 1992, 2001 and 2004, to establish 8, 4, and 3 new provinces, respectively. Using a difference-in-difference approach, we find evidence of a significant detrimental effect of (further) decentralization on innovation in Northern and Central Italian provinces. We argue that this finding can be rationalized with the costs imposed by the “mafia transplantation†phenomenon, as we find that the new provinces that were more exposed to “mafiosi in confino†reduced their innovation output extensively. We perform a number of robustness checks that corroborate our main findings.
    Keywords: local government, decentralization, innovation, mafia transplantation, difference-in-difference
    JEL: D72 H72 K42 L20 O31
    Date: 2021–04
  7. By: Katherine Di Lucido; Nicholas K. Tabor; Jeffery Y. Zhang
    Abstract: This paper provides a brief history of the U.S. financial regulatory perimeter, a legal cordon comprised of “positive†and “negative†restrictions on the conduct of banking organizations. Today’s regulatory perimeter faces a wide range of challenges, from disaggregation, to new commercial entrants, to new varieties of charters (and new uses of legacy charters). We situate these challenges in the longer history of American banking, identifying a pattern in debates about the nature, shape, and position of the perimeter: outside-in pressure, inside-out pressure, and reform and expansion. We also observe a shift in this pattern, beginning roughly three decades ago, which gradually made the perimeter broader, more complex, and arguably more permeable. We show this trend graphically in an animation accompanying this paper.
    Keywords: Regulatory perimeter; Banking regulation; Law and economics; Non-bank financial intermediation
    JEL: K20 K40 N20 N40
    Date: 2021–08–02
  8. By: Serzo, Aiken Larisa O.
    Abstract: The rise of digital platforms necessarily entails the processing of personal data between platforms and their users. More than enabling the delivery of services by the platforms, data shared by users has increasingly become valuable as various businesses are able to leverage their access to data in order to create and upsell other services. <p>However, the ability of platforms to engage in cross-border transactions or operations are affected by the stringent requirements of data protection laws, coupled with the divergent regulations among jurisdictions. <p>With the Philippines as an example, this paper points out the salient points in existing data protection regulations and the impact of these principles on both platforms and data subjects. <p> Comments to this paper are welcome within 60 days from date of posting. Email
    Keywords: regulatory reform, data privacy, digital platforms, data sharing
    Date: 2020
  9. By: Kline, Patrick (University of California, Berkeley); Rose, Evan K. (University of Chicago); Walters, Christopher R. (University of California, Berkeley)
    Abstract: We study the results of a massive nationwide correspondence experiment sending more than 83,000 fictitious applications with randomized characteristics to geographically dispersed jobs posted by 108 of the largest U.S. employers. Distinctively Black names reduce the probability of employer contact by 2.1 percentage points relative to distinctively white names. The magnitude of this racial gap in contact rates differs substantially across firms, exhibiting a between-company standard deviation of 1.9 percentage points. Despite an insignificant average gap in contact rates between male and female applicants, we find a between-company standard deviation in gender contact gaps of 2.7 percentage points, revealing that some firms favor male applicants while others favor women. Company-specific racial contact gaps are temporally and spatially persistent, and negatively correlated with firm profitability, federal contractor status, and a measure of recruiting centralization. Discrimination exhibits little geographical dispersion, but two digit industry explains roughly half of the cross-firm variation in both racial and gender contact gaps. Contact gaps are highly concentrated in particular companies, with firms in the top quintile of racial discrimination responsible for nearly half of lost contacts to Black applicants in the experiment. Controlling false discovery rates to the 5% level, 23 individual companies are found to discriminate against Black applicants. Our findings establish that systemic illegal discrimination is concentrated among a select set of large employers, many of which can be identified with high confidence using large scale inference methods.
    Keywords: discrimination, audit studies, empirical bayes, q-values
    JEL: C11 C9 C93 J7 J71 J78 K31 K42
    Date: 2021–08
  10. By: Bauer, Michal (Charles University, Prague); Cahlíková, Jana (Max Planck Institute for Tax Law and Public Finance); Chytilová, Julie (Charles University, Prague); Roland, Gerald (University of California, Berkeley)
    Abstract: This paper provides experimental evidence showing that members of a majority group systematically shift punishment on innocent members of an ethnic minority. We develop a new incentivized task, the Punishing the Scapegoat Game, to measure how injustice affecting a member of one's own group shapes punishment of an unrelated bystander ("a scapegoat"). We manipulate the ethnic identity of the scapegoats and study interactions between the majority group and the Roma minority in Slovakia. We find that when no harm is done, there is no evidence of discrimination against the ethnic minority. In contrast, when a member of one's own group is harmed, the punishment "passed" on innocent individuals more than doubles when they are from the minority, as compared to when they are from the dominant group. These results illuminate how individualized tensions can be transformed into a group conflict, dragging minorities into conflicts in a way that is completely unrelated to their behavior.
    Keywords: punishment, minority groups, inter-group conflict, discrimination, scapegoating, lab-in-field experiments
    JEL: C93 D74 D91 J15
    Date: 2021–07
  11. By: Gerald A. Carlino
    Abstract: This paper examines how the enforceability of employee non compete agreements affects the entry of new establishments and jobs created by these new firms. We use a panel of startup activity for the U.S. states for the period 1977 to 2013. We exploit Michigan’s inadvertent policy reversal in 1985 that transformed the state from a non enforcing to an enforcing state as a quasinatural experiment to estimate the causal effect of enforcement on startup activity. In a difference-in-difference framework, we find little support for the widely held view that enforcement of non-compete agreements negatively affects the entry rate of new firms or the rate of jobs created by new firms. We find that increased enforcement had no effect on the entry rate of startups, but a positive effect on jobs created by these startups in Michigan relative to a counterfactual of states that did not enforce such covenants pre- and post-treatment. Specifically, we find that a doubling of enforcement led to an increase of about 8 percent in the startup job creation rate in Michigan. We also find evidence that enforcing non-competes positively affected the number of high-tech establishments and the level of high tech employment in Michigan. Extending our analysis to consider the effect of increased enforcement on patent activity, we find that enforcement had differential effects across technological classifications. Importantly, increased enforcement had a positive and significant effect on the number of Mechanical patents in Michigan, the most important patenting classification in that state.
    Keywords: Startup activity; Non-compete agreements; Regional economic growth.
    JEL: O30 O38 R11
    Date: 2021–08–05
  12. By: Ganserer, Angelika
    Abstract: Temporary agency work and outsourcing to a service contractor are two forms of alternative work arrangements with rather complex legal aspects which firms use for external staffing. The regulatory complexity of temporary agency work can lead to intended or unintended non-compliance when firms outsource to a service contractor. In this paper, I provide first evidence for non-compliance with temporary agency work regulations when firms contract out on the basis of a unique new firm survey. By exploiting a choice experiment, I demonstrate that firms do understand the regulatory baseline of temporary agency work, although detailed knowledge often seems to be missing. Non-compliance with regulations therefore often results from ignorance of the legal grayzone.
    Keywords: temporary agency work,contracting out,compliance,choice experiment
    JEL: K31 J41 J83 M55
    Date: 2021
  13. By: Cristina-Luiza Erimia (Ovidius University of Constanta, Romania)
    Abstract: In the context of a globalized economy, a functioning internal market of goods is an essential component of the current and future prosperity of the European Union. Taking into account that the harmonized legislation of the European Union has enshrined the principle of free movement of goods in concrete terms and for specific products, such as, for example, medicinal products, this article examines the restrictions and prohibitions which, even if raise barriers to free trade, they defend important objectives, such as human health. In the context of the current major global developments, the article aims to analyze how the reasons justifying the limiting of the free movement of goods, imposed by the principle of precaution for reasons of environmental and human health protection, have been used over time. In all EU policies, the concept of public health is inextricably linked to sustainable development and the effective protection of the health and life of citizens cannot be conceived without the greening of free movement of goods, more and more visible in recent years. At the same time, new innovative products and technical progress involve new challenges, and a national regulatory framework that ignores these developments may soon become an obstacle to cross-border trade.
    Keywords: public health, European internal market, Court of Justice of the European Union, innovative medicinal product, the principle of precaution, harmonized legislation
    Date: 2021–05
  14. By: Haroon Bhorat; Ravi Kanbur; Benjamin Stanwix; Amy Thornton (Development Policy Research Unit, University of Cape Town)
    Abstract: The rights of workers contained in labour law are multidimensional, yet analysts tend to concentrate on compliance one dimension at a time. How should we conceptualise and measure compliance with labour law in its totality? This paper draws on the multidimensional poverty literature to propose a measure of multidimensional labour law violation, which allows a quantification of the contribution of compliance along different dimensions. This index is applied to South Africa to illustrate its workings and the insights it can provide on the nature and granular structure of labour law compliance and worker vulnerability.
    Keywords: multidimensional, labour law, violation, compliance, index of violation, South Africa, worker vulnerability
    Date: 2020–02
  15. By: Rajeev K. Goel; Ummad Mazhar; Rati Ram
    Abstract: This study uses a large firm-level data set covering more than 80 countries to explore the effects of firm-size, city-size, and government-size on perceived and experienced corruption. Four points summarize our main findings, which seem instructive and new. First, there is a broad structural similarity in the major determinants of perceived and experienced corruption. Second, larger firms and larger government size lower corruption perceptions and experience. Third, larger cities raise corruption perceptions and experience. Fourth, when the sample is limited to large cities, the corruption-lowering effect of government size loses significance throughout, while firm size loses significance in experience regressions.
    Keywords: corruption perception, corruption experience, firm size, government size, city size, emerging economies
    JEL: K42 L25
    Date: 2021
  16. By: Zhijun Chen; Chongwoo Choe; Jiajia Cong; Noriaki Matsushima
    Abstract: This paper studies tech mergers that involve a large volume of consumer data. The merger links the markets for data collection and data application through a consumption synergy. The merger-specific efficiency gains exist in the market for data application due to the consumption synergy and data-enabled personalization. Prices fall in the market for data collection due to the merged firm's incentives to expand its outreach in the market for data application. But in the market for data application, prices generally rise as the efficiency gains are extracted away through personalized pricing, rather than being passed on to consumers. When the consumption synergy is large enough, the merger can result in monopolization of both markets, with further consumer harm when stand-alone competitors exit in the long run. We discuss policy implications including various merger remedies.
    Date: 2021–11

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