nep-law New Economics Papers
on Law and Economics
Issue of 2022‒05‒09
fourteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Fueling Organized Crime: The Mexican War on Drugs and Oil Thefts By Giacomo Battiston; Gianmarco Daniele; Marco Le Moglie; Paolo Pinotti
  2. Police violence reduces civilian cooperation and engagement with law enforcement By Desmond Ang; Panka Bencsik; Jesse Bruhn; Ellora Derenoncourt
  3. Alcohol, Violence and Injury-Induced Mortality: Evidence from a Modern-Day Prohibition By Kai Barron; Charles D.H. Parry; Debbie Bradshaw; Rob Dorrington; Pam Groenewald; Ria Laubscher; Richard Matzopoulos
  4. A Journey in the History of Sovereign Defaults on Domestic-Law Public Debt By Aitor Erce; Enrico Mallucci; Mattia Picarelli
  5. Measuring Judicial Sentiment: Methods and Application to US Circuit Courts By Elliott Ash; Daniel L. Chen; Sergio Galletta
  6. Policing Disability: Law Enforcement Contact among Urban Teens By Amanda Geller; Kristin Turney; Sarah Remes
  7. Higher Education Expansion and Crime: New Evidence from China By Liu, Xingfei; Wang, Chuhong; Yan, Zizhong; Zhao, Yi
  8. Legal aspects of transnational scale corporations' activity in terms of sustainable development By Anatoliy Kostruba
  9. Does Measurement Error Explain the Increase in Subminimum Wage Payment Following Minimum Wage Increases? By Clemens, Jeffrey; Strain, Michael R.
  10. More Laws, More Growth? Evidence from U.S. States By Elliott Ash; Massimo Morelli; Matia Vannoni
  11. Pro-competition regulation in the digital economy: the United Kingdom’s Digital Markets Unit By Dunne, Niamh
  12. In-Group Favoritism and Peer Effects in Wrongful Acquittals: NBA Referees as Judges By Mocan, Naci; Osborne-Christenson, Eric
  13. Legalization and Long-Term Outcomes of Immigrant Workers By Deiana, Claudio; Giua, Ludovica; Nistico, Roberto
  14. Patent disputes as emerging barriers to technology entry? Empirical evidence from patent opposition By Arianna Martinelli; Julia Mazzei; Daniele Moschella

  1. By: Giacomo Battiston; Gianmarco Daniele; Marco Le Moglie; Paolo Pinotti
    Abstract: We show that the War on Drugs launched by the Mexican President Felipe Calderón in 2007 pushed drug cartels into large-scale oil thefts. Municipalities that the presidential candidate’s party barely won at the local elections in 2007-2009 exhibit a larger increase in illegal oil taps over the following years, compared to municipalities in which the presidential candidate’s party barely lost the elections. Challenger cartels in the drug market leapfrog incumbent drug cartels when entering the new illegal activity, analogous to what is typically observed in legal markets. Since challengers and incumbents specialize in different criminal sectors, the expansion of challengers does not increase violence in municipalities traversed by oil pipelines. At the same time, the municipalities traversed by a pipeline witness a decrease in schooling rates.
    Keywords: organized crime, War on Drugs, oil thefts, leapfrogging
    JEL: K42 L20
    Date: 2022
  2. By: Desmond Ang; Panka Bencsik; Jesse Bruhn; Ellora Derenoncourt
    Abstract: How do high-profile acts of police brutality affect public trust and cooperation with law enforcement? To investigate this question, we develop a new measure of civilian crime reporting that isolates changes in community engagement with police from underlying changes in crime: the ratio of police-related 911 calls to gunshots detected by ShotSpotter technology. Examining detailed data from eight major American cities, we show a sharp drop in both the call-to-shot ratio and 911 call volume immediately after the police murder of George Floyd in May 2020. Notably, reporting rates decreased significantly in both non-white and white neighborhoods across the country. These effects persist for several months, and we find little evidence that they were reversed by the conviction of FloydÕs murderer. Together, the results illustrate how acts of police violence may destroy a key input into effective law enforcement and public safety: civilian engagement and reporting.
    Date: 2021
  3. By: Kai Barron; Charles D.H. Parry; Debbie Bradshaw; Rob Dorrington; Pam Groenewald; Ria Laubscher; Richard Matzopoulos
    Abstract: This paper evaluates the impact of a sudden and unexpected nation-wide alcohol sales ban in South Africa. We find that this policy causally reduced injury-induced mortality in the country by at least 14% during the five weeks of the ban. We argue that this estimate constitutes a lower bound on the true impact of alcohol on injury-induced mortality. We also document a sharp drop in violent crimes, indicating a tight link between alcohol and aggressive behaviour in society. Our results underscore the severe harm that alcohol can cause and point towards a role for policy measures that target the heaviest drinkers in society.
    Keywords: alcohol, mortality, economics, health, crime, South Africa, Covid-19, violence
    JEL: I18 I12 K42
    Date: 2022
  4. By: Aitor Erce; Enrico Mallucci; Mattia Picarelli
    Abstract: We introduce a novel database on sovereign defaults that involve public debt instruments governed by domestic law. By systematically reviewing a large number of sources, we identify 134 default and restructuring events of domestic debt instruments, in 52 countries from 1980 to 2018. Domestic-law defaults are a global phenomenon. Over time, they have become larger and more frequent than foreign-law defaults. Domestic-law debt restructurings proceed faster than foreign ones, often through extensions of maturities and amendments to the coupon structure. While face value reductions are rare, net-present-value losses for creditors are still large. Unilateral amendments and post-default restructuring are the norm, but negotiated pre-default restructurings are becoming increasingly frequent. We also document that domestic-law defaults typically involve debt denominated in local currency and held by resident investors. We complement our analysis with a collection "sovereign histories", which provide the fine details about each episode.
    Keywords: Public debt; Sovereign default; Domestic law; Database
    JEL: E62 E65 F34 G01 H12 H63 K00 K41
    Date: 2022–03–18
  5. By: Elliott Ash; Daniel L. Chen (IAST - Institute for Advanced Study in Toulouse); Sergio Galletta
    Abstract: This paper provides a general method for analysing the sentiments expressed in the language of judicial rulings. We apply natural language processing tools to the text of US appellate court opinions to extrapolate judges' sentiments (positive/good vs. negative/bad) towards a number of target social groups. We explore descriptively how these sentiments vary over time and across types of judges. In addition, we provide a method for using random assignment of judges in an instrumental variables framework to estimate causal effects of judges' sentiments. In an empirical application, we show that more positive sentiment influences future judges by increasing the likelihood of reversal but also increasing the number of forward citations.
    Date: 2022
  6. By: Amanda Geller (UC Irvine Department of Criminology, Law and Society); Kristin Turney (UC Irvine Department of Sociology); Sarah Remes (DC Action)
    Abstract: Youth with disabilities, especially disabilities with behavioral manifestations, are at high risk for intrusive police contact, as are youth of color. However, most current research cannot identify diagnosis or race/ethnicity as distinct risk factors from socioeconomic and behavioral characteristics. Using the Fragile Families and Child Wellbeing Study (N=3,128), we assessed disparities in three measures of youth-police contact by disability status, race/ethnicity, and intersections between the two. Regression models indicated disparities in in-school police contact. Youth diagnosed with Attention-Deficit or Attention-Deficit/Hyperactivity Disorder (ADD/ADHD) reported more contact than their non-disabled counterparts. The few youth in the sample diagnosed with autism reported relatively little police contact. Within-race/ethnicity disparities by ADD/ADHD diagnosis were largest and most robust among Hispanic girls. Black boys diagnosed with ADD/ADHD, compared to Black boys without diagnoses, were more likely to be stopped at school. They also reported more intrusive contact than White boys with ADD/ADHD diagnoses, suggesting they faced risks associated with both their disability and their race/ethnicity. Findings highlight inequalities in police contact among youth – especially youth of color – with disabilities. Given the repercussions of police contact for health, educational attainment, and further interactions with the justice system, policing may exacerbate inequalities between youth with and without disabilities.
    Keywords: Police, Law Enforcement, Youth, Disability
    Date: 2022–03
  7. By: Liu, Xingfei (University of Alberta, Department of Economics); Wang, Chuhong (Yango University); Yan, Zizhong (Jinan University); Zhao, Yi (Tsinghua University)
    Abstract: In this paper we present causal evidence on the impact of higher education expansion on crime by exploiting a massive expansion of college enrollment in China since 1999, using data from multiple sources. Our identification strategy exploits regional variation in the intensity of the higher education expansion with partially identified difference-in-differences models. We explore various assumptions to account for the potential unparallel trends over years and find that college expansion causally reduces crime rates and the effect changes over time. Moreover, the crime reducing effect extends beyond the post-secondary educational level and into the senior high schools. Our findings document an important yet overlooked positive externality associated with higher education expansion.
    Keywords: Higher education expansion; Crime; China; Partial identification
    JEL: I20 K42
    Date: 2022–03–24
  8. By: Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University)
    Abstract: This paper discusses the legal aspects of the activities of transnational corporations. The relevance of the subject matter is determined by the significant impact exerted by transnational corporations on the world economy in general and on the economic situation of the country in which such corporations are registered as a subject of legal form of ownership in particular. Quality functioning of transnational corporations is an effective factor for the formation of sustainable development. This study reveals and determines the relationship between the scale of activity of transnational corporations and their legal status within the framework of both single countries and entire economic communities, the individual subjects of law of which are transnational corporations. The practical significance of this study lies in the possibility of identifying and stating key aspects that play a significant role in assessing the practical activities of transnational corporations in the context of existing legal law with the ability to use the identified patterns in specific legal practice. The results of this study can be of significant practical importance for employees in the field of legal support for the activities of transnational-scale corporations, who are faced with the need to deeply analyse the legal aspects of the activities of these organisations and provide management of such structures with timely, highquality legal recommendations regarding the correction of the activities of these organisations in the context of the existing legal field.
    Keywords: International organisations,Legal field,Transnational activity,Transnational corporations,Kostruba,corporate covernance,Corporate responsibility,Corporate law and regulation
    Date: 2022–02–18
  9. By: Clemens, Jeffrey (University of California, San Diego); Strain, Michael R. (American Enterprise Institute for Public Policy Research)
    Abstract: In analyses of minimum wages, positive "ripple effects" and subminimum wages are difficult to distinguish from measurement error. Indeed, prior work posits that a simple, symmetric measurement process may underlie both phenomena in Current Population Survey data for the full working age population. We show that the population-wide symmetry between spillovers and subminimum wage payment is illusory in that spillovers accrue to older individuals while underpayment accrues to the young. Symmetric measurement error cannot explain this heterogeneity, which increases the likelihood that both spillovers and subminimum-wage payment are real effects of minimum wage increases rather than artifacts of measurement error.
    Keywords: minimum wage, subminimum wage, noncompliance
    JEL: J08 J38 K42
    Date: 2022–03
  10. By: Elliott Ash; Massimo Morelli; Matia Vannoni
    Abstract: This paper analyzes the conditions under which more legislation contributes to economic growth. In the context of U.S. states, we apply natural language processing tools to measure legislative flows for the years 1965-2012. We implement a novel shift-share design for text data, where the instrument for legislation is leave-one-out legal-topic flows interacted with pre-treatment legal-topic shares. We find that at the margin, higher legislative output causes more economic growth. Guided by a simple model of reform decision-making under uncertainty, we find that the effect is driven by contingent clauses, that the effect is concave in the preexisting stock of legislation, and that the effect size is increasing with economic policy uncertainty.
    Keywords: Legislative production, growth, regulatory complexity, economic uncertainty
    Date: 2022
  11. By: Dunne, Niamh
    Abstract: The United Kingdom, like many jurisdictions, is introducing more demanding ex ante regulation for the digital economy. Centered on the work of a Digital Markets Unit located within the existing copetition authority, the U.K. proposals are defined by an explicit commitment to “pro-competition” regulation. This article traces the evolution and emerging design of the forthcoming U.K. regime. It then explores the notion of pro-competition regulation in greater detail. While the concept increasingly transcends its domestic origins, this article argues that the balancing act between conventional competition law and traditional regulation that it reflects can be fully understood only when located within the distinctive circumstances of the wider U.K. regulatory landscape.
    Keywords: digital economy; competition law; UK law; pro-competition; Sage deal
    JEL: F3 G3
    Date: 2022–03–21
  12. By: Mocan, Naci (Louisiana State University); Osborne-Christenson, Eric (Pace University)
    Abstract: We provide the first analysis of racial in-group bias in Type-I and Type-II errors. Using player-referee matched data from NBA games we show that there is no overall racial bias or in-group bias in foul calls made by referees. Similarly, there is no racial bias or in-group bias in Type-I errors (incorrect foul calls). On the other hand, there is significant in-group favoritism in Type-II errors. These are wrongful acquittals where the referee did not blow the whistle although a foul was committed. We also analyze peer effects and find that black referees' proclivity to make Type-II errors in favor of black players exists as long black referees have at least one black peer referee on the court, and that the bias disappears only if black referees have two white peers. In case of white referees, in-group favoritism in Type-II errors emerges if white referees have two black peers with them on the court. We provide evidence showing that the results are not attributable to skill differences between referees. We also show that a higher Type-I error rate during the season lowers referees' probability to be selected to officiate a game in the playoffs, whereas variations in the rate of Type-II errors have no impact on the likelihood of a playoff assignment. These results indicate that in-group favoritism takes place in a domain which is not costly (making Type-II errors), and that bias is eliminated when it is costly to the decisionmaker.
    Keywords: racial bias, judicial decisions, in-group bias, Type-I error, Type-II error, peers, incentives
    JEL: K J71
    Date: 2022–03
  13. By: Deiana, Claudio (University of Essex); Giua, Ludovica (European Commission, DG Joint Research Centre); Nistico, Roberto (University of Naples Federico II)
    Abstract: This paper establishes a new fact about immigration policies: legalization has long-term effects on formal employment of undocumented immigrants and their assimilation. We exploit the broad amnesty enacted in Italy in 2002 together with rich survey data collected in 2011 on a representative sample of immigrant households to estimate the effect of regularization in the long run. Immigrants who were not eligible for the amnesty have a 14% lower probability of working in the formal sector a decade later, are subject to more severe ethnic segregation on the job and display less linguistic assimilation than their regularized counterparts.
    Keywords: undocumented immigrants, amnesty program, formal employment, discrimination, segregation
    JEL: J15 J61 K37
    Date: 2022–03
  14. By: Arianna Martinelli; Julia Mazzei; Daniele Moschella
    Abstract: The recent surge of patent disputes plays an important role in discouraging firms from entering new technology domains (TDs). Using a large-scale dataset combining data from the EPO-PATSTAT database and ORBIS-IP and containing patents applied at EPO between 2000 and 2015, we construct a new measure of litigiousness using patent opposition data. We find that the degree of litigiousness and the density of patent thickets negatively affect the likelihood of firms entering new TDs. Across technologies, the frequency of oppositions discourages firms mostly in high-tech industries. Across firms, the risk of opposition falls disproportionately on small rather than large firms. Finally, for large firms, we observe a sort of learning-by-being-opposed effect. This evidence suggests that litigiousness and hold-up potential discourage firms from entering new TDs, shaping Schumpeterian patterns of innovation characterized by a stable number of large-established firms and a lower degree of turbulence.
    Keywords: Patent opposition; Technological entry; Innovation Strategies.
    Date: 2022–05–02

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