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on Law and Economics |
| By: | Ewan McGaughey |
| Abstract: | The corporation is among the most important institutions of our age, and yet it is eclipsed by the enterprise. Corporate law theories have asserted that a corporation is a ‘person’, a ‘nexus of contracts’, that it has ‘proprietary foundations’, or is a ‘concession of the state’. These theories wander across every Roman law category – persons, obligations, property, and public body. None work, because corporations combine elements of each category, but are more. A better tradition sees the corporation as a ‘social institution’, and as one legal form of ‘enterprise’. Corporate law, traditionally confined, is not enough to understand corporations. We must integrate labour, competition, tax, tort, human rights, and public law, because this full body of enterprise law decisively changes corporate finance and governance. It also changes the rights that corporations distribute to investors, workers or service-users. In law, the concept of the ‘enterprise’ (or ‘undertaking’ or ‘group’) has become a dominant legal tool, because it adopts a functional understanding of firms that matches economic reality, eclipsing legal form. In that reality, most major listed corporations are under sector-specific regulation, including in banking, telecoms, big tech, or energy, as are corporations without shareholders such as hospitals or universities. Broadening our horizon enables us to teach how businesses, regulated industries, and public services – all major corporations – actually work. It lays the foundation for accurate empirical research. By shifting our vision to enterprise law, we may contemplate our entire economic constitution as it truly is. |
| Keywords: | Enterprise, corporation, regulation, sector-specific, public services, labour, shareholders, investors, social institution |
| JEL: | K00 K2 K21 K22 K23 K31 K32 K34 L12 L13 L2 L21 L22 L32 L33 L53 L6 L7 L8 L9 Q1 Q2 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cbr:cbrwps:wp542 |
| By: | Bernhard Ganglmair; Julia Krämer; Jacopo Gambato |
| Abstract: | We study how asymmetric enforceability of regulatory rules affects firms’ compliance using a simple inspection model and a large sample of German privacy policies. We exploit the introduction of the General Data Protection Regulation, compelling firms to disclose, in accessible language, details of their data use. The specifics of disclosure are objective, whereas readability is subjective and difficult to enforce. We show that firms increased disclosure, but the policy readability did not improve. In line with theory, firms anticipating regulatory scrutiny and those facing higher-budget data protection authorities demonstrated a stronger response in readability compliance without sizeable effects on disclosure. |
| Keywords: | data protection, GDPR, information disclosure, privacy policies, regulation, text-asdata, transparency |
| JEL: | D22 K20 L51 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_547v2 |
| By: | Yannick Gabuthy (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Nicolas Jacquemet (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, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Olivier L’haridon (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, IUF - Institut universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche) |
| Abstract: | Law and economics primarily focus on various legal rules' capacity to rectify structural inefficiencies stemming from market failures, such as those related to preventive or criminal behaviors. Recent advancements in behavioral economics provide valuable insights into how economic agents respond to the rules they face, offering new perspectives for designing a range of legal rules and procedures. This article provides an overview of these developments as they apply to civil liability regimes, the design of criminal procedure, and criminal policy. |
| Abstract: | Longtemps confinée à l'efficacité de la protection des droits de propriété nécessaires aux échanges de marché, l'analyse économique du droit trouve en grande partie ses origines dans la nécessité de pallier les défaillances de marché associées à la remise en cause des conditions qui rendent leur fonctionnement efficace. Cette branche de l'économie s'intéresse en particulier à la capacité de différentes règles juridiques à corriger les inefficacités structurelles qui en découlent, par exemple en matière de comportements de prévention des risques liés aux activités humaines ou encore de comportements délictuels. Les développements récents de l'économie comportementale apportent un éclairage nouveau sur la réponse des acteurs de l'économie aux règles qui leur sont appliquées, et conduisent en particulier à un renouvellement profond des recommandations de l'économie en matière d'élaboration des règles de droit. Cet article en présente un panorama, appliqué notamment aux régimes de responsabilité civile et aux modalités d'application de la politique pénale. |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04673346 |
| By: | Demirtaş, Gül; Strenger, Christian; Tröger, Tobias |
| Abstract: | Not only institutional investors are increasingly demanding to know more about the sustainability skills of the boards they elect. These skills demonstrate a company's capability to navigate new regulations and meet self-imposed targets. Consequently, they also serve as a significant proxy for a firm's commitment to pursuing transition strategies, providing a bonding mechanism. In response to the growing demand for transparency, Germany has recently set itself apart with its German Corporate Governance Code (GCGC) recommendation that companies show their boards' sustainability expertise by disclosing a skills matrix. We analyze the board skills disclosures for the supervisory boards of the leading German listed companies for 2022, the first year after the adoption of the recommendation. We compare these disclosures with those of companies from France, a country that has long expressed sustainability-related expectations for company boards but has yet to make any recommendations for the disclosure of sustainability skills. We observe that German companies follow a more uniform approach to reporting directors' sustainability skills. However, the lack of a standardized definition of sustainability expertise in both countries has resulted in significant variations in how companies define this essential disclosure item, thereby reducing the comparability of the reported data. We recommend that policymakers specify skills disclosure rules for directors and director nominees more granularly, including a standardized definition of sustainability expertise, and that they support them with effective enforcement mechanisms, reinforced by external audits and government oversight. |
| Keywords: | coporate governance, corporate boards, sustainability skills, disclosure, ESG |
| JEL: | G34 G39 K2 M14 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:302568 |
| By: | Claudia Martínez V. (Access to Medicine Foundation, Netherlands); Rubén Poblete-Cazenave (Erasmus University Rotterdam) |
| Abstract: | A significant number of women experience physical or sexual violence throughout their lives, with a considerable portion of such incidents occurring in public spaces. Harmful social norms emphasizing men’s power over women have been highlighted as one crucial culprit. We study a public festivity in India, Holi (the festival of colors), where a common phrase: “Bura na mano Holi Hai†(Don’t feel offended, it’s Holi) has been misappropriated by many to justify inappropriate behavior. Leveraging different dates of the celebrations based on the lunar calendar, we document a dramatic increase of over 170% assaults against women during Holi. We analyze how perpetrators’ and victims’ gender norms drive violence against women. First, we find that Holi exacerbates existing attitudes towards violence against women, where there is higher violence in districts where men believe that violence against women is justified. Second, we find a male backlash effect, where there is higher violence against women in districts where women believe that violence against women is inappropriate. While patriarchal norms influence reporting behavior and women’s mobility, neither underreporting nor reduced mobility during Holi appear to be the main drivers of the second effect. Overall, this paper highlights the critical role of social norms and gender imbalances in shaping violence against women, underscoring the urgent need for intervention. |
| Keywords: | Violence against women, social norms, street harassment |
| JEL: | J16 K14 K42 O12 Z10 |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240041 |
| By: | Mario Tamez; Ender Emre; Alessandro Gullo |
| Abstract: | This paper explores the intersection of climate change policies with banking supervisory law. Statutory mandates define banking supervisory agencies’ objectives, functions and powers. Policies that aim to address climate change risks appear fully germane to banking supervisors’ main objective of safety and soundness. As such, banking supervisory agencies have a duty to address climate risks in light of their mandate. A mandate that is not anchored on safety and soundness in light of best practice would blur the accountability of banking supervisory agencies and undermine their legitimacy also with respect to climate. While legal changes can help provide greater legal certaintly, particularly given the long-term perspective of climate change, bank supervisory agencies can take action without fundamental reforms of their legal framework. Accordingly, they have set expectations or requirements for banks to incorporate climate into their strategy and business model, risk management, and governance. A combination of legal instruments—based on soft law and hard law—helps to achieve this objective. Notwithstanding implementation challenges, taxonomies and disclosures remain important tools, and banking supervisors should assess their role in the development of such tools in light of their mandate. The key responsibility to address climate risks rests on banks, and corporate governance frameworks could assist. |
| Keywords: | Climate Change; Banking Law; Legal Framework |
| Date: | 2024–09–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/193 |
| By: | Dustmann, Christian (University College London); Landersø, Rasmus (Rockwool Foundation Research Unit); Andersen, Lars Højsgaard (Rockwool Foundation Research Unit) |
| Abstract: | This paper studies the effects of a large welfare benefit reduction on the children in the affected families. The welfare cut targeted adult refugees who received residency in Denmark, and it reduced their disposable income by 30 percent on average over the first five years. We show that children exposed to the welfare cut during preschool and school-age obtained lower GPAs, experienced reduced well-being and overall education levels, and suffered lower employment and earnings as adults. Children in their teens at exposure faced large increases in conviction probabilities for violent and property crimes. |
| Keywords: | crime, welfare state, social assistance, education, inequality |
| JEL: | I24 I30 J10 K14 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17244 |