nep-law New Economics Papers
on Law and Economics
Issue of 2023‒01‒09
24 papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Imperfect Law Enforcement, Informality, and Organized Crime By Mascarúa Lara Miguel A.
  2. Highway to Hell? Interstate Highway System and Crime By Calamunci, Francesca; Lonsky, Jakub
  3. Marijuana Legalization and Mental Health By Borbely, Daniel; Lenhart, Otto; Norris, Jonathan; Romiti, Agnese
  4. Custodial versus non-custodial sentences: Long-run evidence from an anticipated reform By Bastien Michel; Camille Hémet
  5. By Object or by Effect? The Collusive Potential of First Refusal Contracts By Patrick Van Cayseele; Andreas Bovin
  6. Can Soft Law Improve the Welfare of Sexual Minorities? The Case of Same-sex Partnership Policy in Japan By Sugiyama, Yuri
  7. In Pursuit of Balance: Vicarious Liability Doctrine in the United Kingdom and India By Ram Mohan, M.P.; Sai Muralidhar
  8. Did Caselaw Foster England’s Economic Development during the Industrial Revolution? Data and Evidence By Peter Grajzl; Peter Murrell
  9. Economic Research on Privacy Regulation: Lessons from the GDPR and Beyond By Garrett Johnson
  10. Church Against State: How Industry Groups Lead the Religious Liberty Assault on Civil Rights, Healthcare Policy, and the Administrative State By Last, Briana Shiri; Wuest, Joanna
  11. The Municipal Role in Policing By Alok Mukherjee; Erick Laming; Jihyun Kwon
  12. Public Comment for FTC's Commercial Surveillance ANPR By Sivan-Sevilla, Ido; Nissenbaum, Helen; Parham, Patrick T.
  13. How do tax technology and controversy expertise affect tax disputes? By Dyck, Daniel; Lorenz, Johannes; Sureth, Caren
  14. Why did shareholder liability disappear? By Bogle, David A.; Campbell, Gareth; Coyle, Christopher; Turner, John D.
  15. Man vs. Machine : Technological Promise and Political Limits of Automated Regulation Enforcement By Browne, Oliver R.; Gazze, Ludovica; Greenstone, Michael; Rostapshova, Olga
  16. Assessing Policy Impacts in Digital Services Trade: Implications for the Philippines By Quimba, Francis Mark A.; Moreno, Neil Irwin S.
  17. All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization By Howell, Sabrina T.; Jang, Yeejin; Kim, Hyeik; Weisbach, Michael S.
  18. Interrogation and Disclosure of Evidence By Jesse Bull
  19. Updating the Social Norm: the Case of Hate Crime after the Brexit Referendum By Facundo Albornoz; Jake Bradley; Silvia Sonderegger
  20. Process improvement for government drug procurement in India By Harleen Kaur; Ajay Shah; Siddhartha Srivastava
  21. Cross-Border Mergers and Acquisitions By Erel, Isil; Jang, Yeejin; Weisbach, Michael S.
  22. Collusion and Predation Under Cournot Competition By Emilie Dargaud; Maxime Menuet; Petros G. Sekeris
  23. Enhancing insolvency frameworks to support economic renewal By Christophe André; Lilas Demmou
  24. More EU Decisions by qualified majority voting - but how? Legal and political options for extending qualified majority voting By Mintel, Julina; von Ondarza, Nicolai

  1. By: Mascarúa Lara Miguel A.
    Abstract: How does imperfect law enforcement affect drug trafficking, predation on firms, informality, and aggregate production? To quantify it, a general equilibrium occupational model is developed in which there is room for drug trafficking, crime against businesses, and tax evasion in the presence of imperfect institutions. Detailed micro-level data on business victimization and cartels in Mexico are used to calibrate the model. It is found that the imperfect application of the law generates considerable losses in production derived from a misallocation of occupations and resources. Finally, using counterfactual simulations, the effects of policies that seek to improve the allocation of resources are calculated. With complete law enforcement in the illegal drug market, the workers in that sector would relocate to the productive sector, and aggregate production would increase. Without crimes against businesses, which would allow a reallocation of work, capital, and occupations to the formal sector, production would increase even more. However, the largest effects come from a decrease in informality.
    Keywords: Misallocation;aggregate distortions;drug cartels;crime;formal and informal sectors
    JEL: O11 O17 O43 O47 K42
    Date: 2022–12
  2. By: Calamunci, Francesca (Sapienza University of Rome); Lonsky, Jakub (University of Liverpool)
    Abstract: The United States witnessed an unprecedented crime wave in the second half of the twentieth century, with the total index crime rate more than tripling between 1960-1980. Little is known about the causes of this surge in criminal activity across the country. This paper investigates the role played by the Interstate Highway System (IHS), an ambitious federal government project that led to the construction of over 40,000 miles of highways between 1956-1992. Using a staggered difference-in-differences design and a county-by-year panel dataset spanning all US counties between 1960-1993, we find that a highway opening in a county led to a 5% rise in the local index crime. This effect is driven by property crime (namely larceny and motor vehicle theft), while violent crime remained unaffected. Exploring potential mechanisms, we show that the increase in crime could be explained by the positive effect of IHS on local economic development. At the same time, we find that increases in the local law enforcement size and presence in the affected communities mitigated any substantial crime surge induced by the highway construction.
    Keywords: Interstate Highway System, local crime, economic development, local law enforcement
    JEL: H54 K42 O18
    Date: 2022–12
  3. By: Borbely, Daniel (University of Dundee); Lenhart, Otto (University of Strathclyde); Norris, Jonathan (University of Strathclyde); Romiti, Agnese (University of Strathclyde)
    Abstract: This study examines the effects of U.S. state-level marijuana policies on mental health. Using data from three nationally representative data sets and estimating difference-in-differences models that account for the staggered implementation of both medical and recreational marijuana legislation, we evaluate the impact on marijuana use as well as two measures of mental distress. We show that marijuana laws have positive effects on marijuana use, but find no evidence for any effect on mental health on average. Nonetheless, null aggregate effects mask sharp heterogeneities across the age distribution. Our findings show that elderly individuals (age 60 and older) benefit from medical marijuana legalization in terms of better mental health, whereas legalizing recreational marijuana produces negative mental health effects for younger individuals (below age 35). The effects of medical marijuana legislation are driven by elderly people with pre-existing chronic health conditions, whereas those of recreational marijuana legislation are driven by younger and relatively healthy individuals. Furthermore, results are stronger for women than for men.
    Keywords: marijuana legalization, recreational marijuana, medical marijuana, mental health
    JEL: I18 I10 K32
    Date: 2022–12
  4. By: Bastien Michel (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - Nantes Université - École Centrale de Nantes - Nantes Univ - Nantes Université); Camille Hémet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We study the relative impact of custodial and non-custodial sentences on later crime and labor-market outcomes in Denmark, a country where detention conditions are particularly good. To do so, we take advantage of a large-scale reform of the Danish legislation implemented in 2000, whereby incarceration was replaced by a non-custodial sentence for most drunk-driving crimes, which represented a quarter of the custodial sentences inflicted prior to the reform. Our first key finding is that stakeholders anticipated the consequences of the reform: around the time of the reform, the number of cases tried dropped and the nature of the cases changed significantly. To measure the relative impact of incarceration, we therefore resort to a novel instrumental variable approach exploiting quasi-exogenous variation in the probability of being tried after the reform, and therefore incarcerated, based on the crime date. We find that incarcerated offenders commit more crimes and have weaker ties to the labor market after release. The pattern of results suggests that part of the explanation for this increase in offenders' criminal activities can be found in their greater precariousness.
    Keywords: Crime, Employment, Incarceration, Recidivism
    Date: 2022–12
  5. By: Patrick Van Cayseele; Andreas Bovin
    Abstract: This article examines the collusive potential of first refusal contracts, which are contracts that grant one party, the buyer, a right of first refusal on the output of another party, the seller. When two parties enter into this type of contract, the seller is obligated to offer any output she wishes to sell to the buyer first. It is only after a 'first refusal' by the buyer that output can be offered to third parties. We compare the outcomes which arise under first refusal contracts with those resulting from explicit cooperation. Our findings suggest that these contracts can result in an identical distortion of competition, while remaining under the radar of antitrust authorities.
    Keywords: Right of first refusal, contract, theory of harm, abuse of bargaining power
    JEL: L4 L40 L41 L42
    Date: 2022
  6. By: Sugiyama, Yuri
    Abstract: Soft law, defined as a set of not legally binding rules, can play a potentially important role in protecting minorities, but it remains empirically unknown whether and how such law works. This study examines how the introduction of soft law affects the welfare of sexual minorities in the context of Japan, where an increasing number of municipalities have adopted a non-binding policy that officially recognizes same-sex relationships (“Same-sex partnership policy”). Using a difference-in-differences and an event study analysis that exploits the variations in the timing of adoption, I find that the same-sex partnership policy reduces the suicide rate of the general population by 5%. I then show that the partnership policy promotes a greater awareness of sexual minorities among residents. Google search data reveal that the number of searches for the word “LGBT” increases after the introduction of the partnership policy, while that for discriminatory words for sexual minorities decreases. Furthermore, original survey data shows the level of subjective happiness of sexual minorities became higher after their municipalities introduced the partnership policy. The survey analysis also suggests that cisgender heterosexuals from the municipalities with the partnership policy became more tolerant toward sexual minorities. Finally, all of these effects are more prominent in the more liberal municipalities. These results altogether imply that soft law can improve the welfare of sexual minorities by increasing the social awareness and acceptance of sexual minorities, especially where people are more likely to accept the new norms proposed by laws.
    Date: 2022–12
  7. By: Ram Mohan, M.P.; Sai Muralidhar
    Abstract: The Doctrine of Vicarious Liability is a unique exception to the principle of fault-based liability and holds persons liable for the actions of third parties. The recent verdicts in WM Morrison Supermarkets v Various Claimants (2020) and Various Claimants v Barclays Bank (2020) by the UK Supreme Court restricting the scope of vicarious liability through its interpretation of the akin to employment test as well as the close connection test deserves scrutiny. The Supreme Court apart from reaffirming the traditional distinction between independent contractors and employees also has limited the circumstances in which claims of vicarious liability can be upheld. Given that tort law in India is deeply rooted in the common law of the UK, it is unsurprising that principally vicarious liability in India and UK has evolved similarly. The paper analyses the various principled justifications behind the doctrine and focuses on the various tests such as the akin to employment test, course of employment test & close connection test which are used to impose liability. Further, it comprehensively examines the evolution of the doctrine in the UK and India, and analyses the varying approach taken by the judiciary in both countries against the backdrop of the socio-economic conditions of the workforce. Lastly, the paper identifies the difficulties that the doctrine may face in the future.
    Date: 2022–12–21
  8. By: Peter Grajzl; Peter Murrell
    Abstract: We generate and analyze data pertinent to the role of caselaw in England's economic development during the Industrial Revolution. Applying topic modeling to a corpus of 67,455 reports on English court cases, we construct annual time series of caselaw developments between 1765 and 1865. We then add a real per-capita GDP series to our caselaw series and estimate a structural VAR. Caselaw shocks account for more of the variability in per-capita GDP than do shocks directly to per-capita GDP. The response of per-capita GDP to caselaw innovations critically depends on the legal domain. Developments in caselaw on intellectual property, organizations, debt and finance, and inheritance exerted positive effects while developments in property and ecclesiastical caselaw reduced per-capita GDP. Our analysis uncovers a 'bleak law era' when the legal system misallocated attention between development-promoting and development-hindering areas of law.
    Keywords: caselaw, England, economic development, Industrial Revolution, topic modelling, time series
    JEL: N13 N43 K10 K30 P48 O17
    Date: 2022
  9. By: Garrett Johnson
    Abstract: This paper reviews the economic literature on the European Union's General Data Protection Regulation (GDPR). I highlight key challenges for studying the regulation including the difficulty of finding a suitable control group, variable firm compliance and regulatory enforcement, as well as the regulation's impact on data observability. The economic literature on the GDPR to date has largely—though not universally—documented harms to firms. These harms include firm performance, innovation, competition, the web, and marketing. On the elusive consumer welfare side, the literature documents some objective privacy improvements as well as helpful survey evidence. The literature also examines the consequences of the GDPR's design decisions and illuminates how the GDPR works in practice. Finally, I suggest opportunities for future research on the GDPR as well as privacy regulation and privacy-related innovation more broadly.
    JEL: K2 L51
    Date: 2022–12
  10. By: Last, Briana Shiri; Wuest, Joanna
    Abstract: Industry-funded religious liberty litigation groups have sought to undermine healthcare policy and law while simultaneously attacking the rights of sexual and gender minorities. Whereas past scholarship has tracked religiously-affiliated healthcare providers’ growing political power and attendant transformations to legal doctrine, our account emphasizes the political donors and visionaries who have leveraged religious providers and the U.S. healthcare system’s delegated structure to transform social policy and bureaucratic agencies more generally. We collect and analyze industry-funded litigation briefs, track statutory and constitutional developments in federal courts, and employ a historical institutionalist analysis of the U.S. healthcare system. Case studies include: 1) the Affordable Care Act’s implementation, 2) Department of Health and Human Services (HHS) interpretations of its rules and relevant congressional statutes, 3) the professional civil service, and 4) state and federal COVID-19 public health policies. We find that industry-funded religious liberty legal organizations have successfully limited the rights of sexual and gender minorities and access to reproductive healthcare while also curtailing the administrative authority of agencies including HHS. Our case studies highlight the threat that industry-funded religious liberty legal organizations pose for effective healthcare regulation, reproductive healthcare access, and civil rights enforcement for sexual and gender minorities.
    Date: 2022–11–28
  11. By: Alok Mukherjee; Erick Laming; Jihyun Kwon (University of Toronto)
    Abstract: Although municipalities play a significant role in the provision of police services (while others rely on provincial and federal police forces), they face constraints when it comes to police governance and accountability, including control over police budgets. The fifth report in the Who Does What series from the Institute on Municipal Finance and Governance (IMFG) and the Urban Policy Lab focuses on the role that Canadian municipalities play in policing, which functions they are best suited to perform, and how they can work better with other orders of government. Mukherjee and Kwon draw attention to the municipal policing responsibilities that arise from federal mandates or areas of federal jurisdiction. They call for an inter-governmental discussion on the division of responsibilities among federal, provincial and municipal orders of government. They suggest that municipalities should fund public safety–related functions, which should be separated from those requiring armed police. Provincial legislation on policing, they argue, should accurately reflect the delineation of responsibilities, different types of policing services, the consequent structures, and municipal obligations. Laming proposes replacing the current structure of local police services boards, which includes political representation, with a purely civilian model of governance. He provides a framework to implement this approach, ending with 10 recommendations to improve the governance and accountability of local policing.
    Keywords: Canada, municipalities, policing, intergovernmental relations, police services boards
    JEL: H70 H59 K42
    Date: 2022–12
  12. By: Sivan-Sevilla, Ido (University of Maryland); Nissenbaum, Helen; Parham, Patrick T.
    Abstract: These comments, respectfully submitted in response to the Federal Trade Commission’s (FTC) advanced notice of proposed rulemaking (ANPR) on the prevalence of commercial surveillance and data security practices that harm consumers, are based on selected research findings – our own and others. They are organized into four Parts. Part I drives a stake through the heart of direct-to-consumer consent-based approaches, arguing that notice and consent, transparency and choice, and privacy policies are not only ineffective; they may constitute “unfair and deceptive” practices. Part II addresses questions about data minimization, purpose limitations and sectoral approaches, vulnerable populations, and costs and benefits by drawing on the theory of privacy as contextual integrity (CI) (Nissenbaum, 2009). Part III discusses questions on the role of third party intermediaries in the enforcement process and facilitation of new disclosure rules, mechanisms to require/incentivize companies to be forthcoming about their data practices, and the role of civil rights agencies. Part IV suggests an adaptive regulatory model for the FTC through three regulatory learning cycles that can help the Commission account for changes in business models of surveillance-based industries.
    Date: 2022–11–22
  13. By: Dyck, Daniel; Lorenz, Johannes; Sureth, Caren
    Abstract: Given the rising number, magnitude, and harshness of tax disputes between firms and tax authorities, firms increasingly call on tax technology and controversy expertise to try to resolve these disputes. This study investigates how tax technology embedded in the firm's Tax Risk Management System (TRMS) and the expertise of tax controversy managers affect dispute outcomes and compliance incentives. Using a game-theoretic model, we derive equilibrium strategies for a tax manager's compliance effort, a controversy manager's dispute resolution effort, and a tax authority's litigation decision. Absent a controversy manager, we find that improving a firm's TRMS quality unambiguously decreases the litigation probability. However, in the presence of a controversy manager, we surprisingly find that improving TRMS quality crowds out compliance efforts and can increase litigation probability. Overall we find that a high-quality TRMS is essential to take advantage of the dispute resolution function of a controversy manager.
    Keywords: tax dispute resolution,tax risk management,tax technology,controversy expertise,litigation
    JEL: H25 H26 C72 K34
    Date: 2022
  14. By: Bogle, David A.; Campbell, Gareth; Coyle, Christopher; Turner, John D.
    Abstract: Why did shareholder liability disappear? We address this question by looking at its use by British insurance companies from 1830 until its complete disappearance by 1975. We explore three explanations for its demise: (1) regulation and government-provided policyholder protection meant that it was no longer required; (2) it had become de facto limited; and (3) shareholders saw an opportunity to expunge something they disliked when insurance companies grew in size. Using hand-collected archival data, our findings suggest investors attached a risk premium to shareholder liability, and it was phased out after a merger movement increased the size of insurance companies which meant that they were better able to pool risks.
    Keywords: Insurance,regulation,shareholder liability,United Kingdom
    JEL: G11 G22 N20 N40
    Date: 2022
  15. By: Browne, Oliver R. (University of California, Berkeley); Gazze, Ludovica (University of Warwick, Department of Economics & CAGE); Greenstone, Michael (University of Chicago); Rostapshova, Olga (University of Chicago)
    Abstract: New technologies allow perfect detection of environmental violations at near-zero marginal cost, but take-up is low. We conducted a field experiment to evaluate enforcement of water conservation rules with smart meters in Fresno, CA. Households were randomly assigned combinations of enforcement method (automated or in-person inspections) and fines. Automated enforcement increased households’ punishment rates from 0.1 to 14%, decreased water use by 3%, and reduced violations by 17%, while higher fine levels had little effect. However, automated enforcement also increased customer complaints by 1,102%, ultimately causing its cancellation and highlighting that political considerations limit technological solutions to enforcement challenges.
    Keywords: Field Experiment ; Automated Enforcement ; Remote Sensing ; Water Conservation JEL Codes: Q25 ; K42
    Date: 2022
  16. By: Quimba, Francis Mark A.; Moreno, Neil Irwin S.
    Abstract: Rapid digitalization has become an integral feature of the global economy in recent years, as markets became more connected and new modes of production and trade emerged. Having a relatively open digital environment, the Philippines is poised for digital trade integration with its Asia-Pacific neighbors. However, various measures must be taken for the country to be fully prepared for regional integration. Some of these are considered low-hanging fruits and can be quickly adopted by the government. This paper examined these low-hanging fruits in terms of their effects on the digital services trade. It conducted a two-stage regression of the gravity model of trade using data from various sources. This allowed for the estimation of country-specific characteristics in the presence of three-way fixed effects. Results show that the low-hanging fruits generate heterogenous effects on digital services trade. Ratifying the revised WTO Agreement on Government Procurement (GPA) is positively associated with digital services trade, despite an earlier version having negative effects. Data retention requirements and online piracy have both positive and negative effects, while the effects of local loop unbundling were inconclusive. Overall, data retention was more facilitative, while online piracy had greater adverse effects on the digital services trade. These findings suggest the importance of acceding to the GPA, revising the conditions of data retention requirements, strengthening copyright enforcement, and providing additional channels for promoting legal content. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: digital services trade;WTO GPA;local loop unbundling;data retention policy;copyright enforcement
    Date: 2022
  17. By: Howell, Sabrina T. (New York University); Jang, Yeejin (UNSW Sydney); Kim, Hyeik (University of Alberta); Weisbach, Michael S. (Ohio State University and ECGI, Brussels)
    Abstract: Infrastructure assets have undergone substantial privatization in recent decades. How do different types of owners target and manage these assets? And does the contract form—control rights (concession) vs. outright ownership (sale)—matter? We explore these questions in the context of global airports, which like other infrastructure assets have been privatized by private firms and private equity (PE) funds. Our central finding is that PE acquisitions bring marked improvements in airport performance along a rich array of dimensions such as passengers per flight, total passengers, number of routes, number of airlines, cancellations, and awards. Net income increases after PE acquisitions, which does not reflect lower costs or layoffs. In contrast, in the few cases where non-PE acquisitions bring some improvement, it appears to reflect targeting rather than operational changes. Overall, we find little evidence that privatization alone increases airport performance; instead, infrastructure funds improve performance both in privatization and subsequent acquisitions from non-PE private firms. These effects are largest when there is a competing airport nearby. Finally, we show that outright ownership rather than control rights alone is associated with the most improvement after privatization.
    JEL: G32 G38 H54 L32 R42
    Date: 2022–10
  18. By: Jesse Bull (Department of Economics, Florida International University)
    Abstract: In recent years there has been a shift to less confrontational interrogation methods. One argument in favor of these methods is that they reduce the scope for false confessions. This paper explores this idea from an information perspective with rational agents. Should a police officer choose to interrogate an accused person, the goal is a confession. The police officer bases her decision of whether to interrogate on both the realization of some evidence and on a private non-verifiable signal; both of these influence the outcome at trial, should the case proceed to trial. So there are potentially two channels of information to the accused: 1) that the police officer decided to interrogate, and 2) the presentation of evidence to the accused during interrogation. The accused chooses whether to confess by weighing his expected payoff from going to trial against that from confessing. Less confrontational interrogation methods close the second channel of information and can reduce false confessions while still inducing guilty to confess. It is helpful for the accused to be somewhat informed about the strength of the case against him, and this comes through being interrogated. However, it can be detrimental for the accused to be too well informed about the strength of the case against him.
    Date: 2022–10
  19. By: Facundo Albornoz (University of Nottingham/CONICET/CEPR); Jake Bradley (University of Nottingham/IZA); Silvia Sonderegger (University of Nottingham)
    Abstract: Within the context of the Brexit referendum, we show that changes in the perception of social norms impact behavior. The referendum revealed new information about views over immigrants at country level. This new information caused a shift in the social norm which made xenophobic expressions more acceptable. At the margin, some of these expressions involve hate crime. We argue that the post-referendum behavioral change increased in the level of surprise at the referendum result, and that observed geographical variations of the effect depend on underlying local views on immigrants. Survey data corroborate these uncovered facts and support our theoretical mechanism.
    Keywords: social norm; social acceptability; xenophobia; value of information; social interactions; referendum
    Date: 2022–12
  20. By: Harleen Kaur (Independent Researcher'); Ajay Shah (xKDR Froum); Siddhartha Srivastava (NIPFP)
    Abstract: In India, drug quality is an important problem. Government agencies are an important buyer of drugs, and also face significant problems with drug quality. In this paper, we examine the mechanisms used for drug purchase by four Indian states - Rajasthan, Punjab, Bihar and Gujarat. We establish a taxonomy of 13 design elements that define the drug procurement process. We engage in deductive reasoning about the design elements that appear to be useful and those that are less so. This work would help policy makers placed in an Indian public sector context in devising better procedures for drug purchase.
    JEL: I11 I18 H83
    Date: 2022–12
  21. By: Erel, Isil (Ohio State University and ECGI, Brussels); Jang, Yeejin (UNSW Sydney); Weisbach, Michael S. (Ohio State University and ECGI, Brussels)
    Abstract: One of the most consequential events in any firm’s lifetime is a major acquisition. Because of their importance, mergers and acquisitions (M&As) have been an enormous area of research. However, the vast majority of this research and survey papers summarizing this research have focused on domestic deals. Cross-border ones, however, constitute about 30% of the total number and 37% of the total volume of M&As around the world since the early 1990s. We survey the literature on cross-border M&As, focusing on international factors that can lead firms to acquire a firm in another country. Such factors include differences in economic development, laws, institutions, culture, labor rights, protection of intellectual property, taxes, and corporate governance.
    JEL: F00 G32 G34
    Date: 2022–10
  22. By: Emilie Dargaud (Univ Lyon, Université Lumière Lyon 2, GATE, UMR 5824, F-69130 Ecully, France); Maxime Menuet (LEO, University of Orleans, Orleans, France. e-mail:; Petros G. Sekeris (Corresponding author: TBS Business School, 1 Place A. Jourdain, 31000 Toulouse, France)
    Abstract: This paper studies how predation strategies can affect the sustainability of collusion. We demonstrate that in the presence of few competitors collusion may be sustained at equilibrium for intermediate discount factors. In such instances predation implies that punishment strategies will yield low subgame perfect payoffs, thereby making collusion easier to sustain. For low discount factors collusion is not sustainable because of the high incentives to deviate to Cournot-Nash strategies. Moreover, for high discount factors it is always optimal to predate colluding firms, thus contrasting with much of the earlier literature showing that collusion is only achievable by sufficiently patient firms.
    Keywords: Collusion, Predation, Cournot competition
    JEL: D43 L13 L41
    Date: 2022
  23. By: Christophe André; Lilas Demmou
    Abstract: This paper updates of the OECD Insolvency framework indicator, which summarises the main features of insolvency systems, with respect to their ability to prevent the failure of viable firms, allow a timely exit of non-viable companies, facilitate corporate restructuring and promote entrepreneurship by offering a second chance to honest failed entrepreneurs. The indicator covers 45 countries, including all OECD and European Union members. Since the indicator’s previous vintage (2016), most countries have enhanced their insolvency frameworks, notably early warning systems and pre-insolvency procedures. There is still room for improvement, particularly on simplified frameworks for small businesses, which are still often lacking. However, many countries report future insolvency reform plans. The paper also highlights the importance of efficient insolvency procedures as pressure on businesses arises from the gradual withdrawal of COVID-related policy support, the rise in energy costs and interest rates, along with the restructuring needs induced by the green and digital transitions.
    Keywords: capital misallocation, firm exit, personal and corporate insolvency, productivity, zombie firms
    JEL: D24 K35 O40 O43 O47
    Date: 2022–12–14
  24. By: Mintel, Julina; von Ondarza, Nicolai
    Abstract: In the debate on how to strengthen the European Union's (EU) capacity to act, calls for an extension of qualified majority voting (QMV) are growing louder. The Council of the EU is currently discussing using the so-called passerelle clauses in the Treaty on European Union (TEU). With these clauses, more decisions by QMV could be introduced without a major treaty change or a convention. However, abolishing national vetoes in this way would first require unanimity as well as, in some cases, additional national approval procedures. Such unanimity is currently not in sight, as resistance is prevailing in smaller and medium-sized member states, which fear that they could be regularly outvoted. What is needed, therefore, is an institutional reform package in which decisions by QMV are extended with the aim of facilitating further enlargement of the EU and are accompanied by emergency clauses to protect core national interests.
    Keywords: EU decisions,qualified majority voting (QMV),passerelle clause,Treaty on European Union (TEU),EU Commission,Common Foreign and Security Policy (CFSP)
    Date: 2022

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