|
on Law and Economics |
| By: | Raman Maroz; Oleksandra Popova; Santiago Satizábal Acosta |
| Keywords: | Governance-E-Government Law and Development-Law and Justice Institutions Law and Development-Legal Reform |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:40951 |
| By: | Erica Bosio; Virginia Upegui |
| Keywords: | Law and Development-Justice for the Poor Law and Development-Law and Justice Institutions Law and Development-Legal Reform |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:40737 |
| By: | Pedro Amoni; Leonardo Soriano Alencar |
| Abstract: | We investigate how court rulings affect banks’ views on the protection of creditor rights, their lending practices, and the ultimate effects on business performance. Leveraging the random assignment of judges to cases brought against financial institutions, we demonstrate banks restrict credit after observing unfavorable decisions issued by pro-debtor judges in disputes involving them. This informational shock is transmitted to firms within banks’ relationships through credit rationing for small businesses, adversely affecting their performance. Our research highlights the significant role of judges in shaping economic activity beyond the immediate parties involved in a legal conflict. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:618 |
| By: | Enriques, Luca; Nigro, Casimiro A.; Tröger, Tobias |
| Abstract: | Policymakers around the globe have sought to stimulate Venture Capital (VC) investments, and an extensive literature has inquired into the institutional determinants of a vibrant VC market, including corporate law. We contribute to that literature by exploring the significance of corporate law for VC contracting and hence VC investments. Corporate law's relative rigidity or flexibility is key to the efficiency of the contractual technology governing VC deals. Importantly, it can hamper such transactions through a number of "constraints, " which we have identified in a companion paper. To illustrate our point, in another companion paper, we take German and Italian corporate laws as two case studies and show how they are largely averse to VC contracting. In addition, we show that the regulatory constraints they impose stem from blackletter corporate law much less often than from scholarly constructs and courts' interpretations. This chapter anticipates two objections that cast doubt over the importance of our findings as to the construction of vibrant VC markets in Germany and Italy. Specifically, the first of these objections is that VC funds and entrepreneurs planning to run their startups in Germany and Italy can circumvent the strictures of local corporate laws by incorporating abroad, and the other is that formal contracts are inconsequential in VC deals, meaning that the regulatory constraints we document are irrelevant. Meanwhile, the chapter also shows that the detailed understanding of regulatory constraints unveiled by our research can inform more effective policymaking. Ultimately, we make two policy recommendations: first, we propose the adoption of a statutory provision that would explicitly insulate the arrangements that typically shape U.S. VC deals from undue interventions; and, second, we argue in favor of a standard charter aligned with U.S. VC transactional practice that the law itself should declare entirely enforceable. |
| Keywords: | Comparative Corporate Law, Comparative Corporate Governance, Entrepreneurship, Financial Contracting, Private Ordering, Startups, Venture Capital, Entrepreneurial Finance |
| JEL: | G38 K22 L26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:313650 |
| By: | Paulo Burnier da Silveira |
| Abstract: | This paper analyses the determinants of cartel duration by using a dataset of 120 cases sanctioned by the Brazilian Competition Authority (CADE) between 1999 and 2022, which corresponds to all cartels sanctioned by CADE in Brazil from its inception until December 2022. The research considers the starting and the ending dates of the infringement as indicated in the case files, and it reveals an average duration of 4 years per cartel. Around 20% of the cartels had a very short duration (less than 3 months), while the longest cartel durations were around 20 years per cartel (i.e. the cartels in the markets of cement, salt extraction and marine hoses). The research then focuses in exploring the key determinants that may affect the duration of cartels, including the affected economic sector, the number of defendants and the geographic scope (i.e. local, national or international cartel). For this purpose, the research provides a statistics description of the database, which includes more than 2.500 defendants and total fines of around 10 billion BRL (2 billion Euros). The paper also explores possible correlations between these key determinants and the duration of cartels, by applying tests to measure the intensity of the correlations and its statistical significance. Last, a cartel survival estimation based on a Kaplan-Meier modelling indicates the probability of a cartel surviving after a given number of years, and a regression exercise using OLS and WLS completes the analysis. The paper concludes with a summary of the key findings and suggestions for future work. |
| Keywords: | Cartel duration; key determinants; correlation analysis; cartel survival estimation; Brazilian Competition Authority (CADE); economic analysis of competition law enforcement |
| JEL: | C01 K21 L49 L51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-18 |
| By: | Isabel Santagostino Recavarren; Shantel Marekera; Mariam Anaïs Gnakra |
| Keywords: | Gender-Gender and Law Gender-Gender and Social Policy Conflict and Development-Conflict and Fragile States Law and Development-Law and Justice Institutions |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wboper:40946 |
| By: | Enriques, Luca; Nigro, Casimiro A.; Tröger, Tobias |
| Abstract: | Venture capital ("VC") has built a solid reputation for spurring innovation and economic growth, thus emerging as a crown jewel of the U.S. economy since the 1980s. The development of the U.S. VC market has benefited from the enabling nature of U.S. (Delaware) corporate law, which allows parties to devise a complex contractual framework that economists consider the best realworld solution to the market frictions bedeviling the finance of high-tech innovative projects. The law and finance literature has paid attention to corporate law as one of the determinants of VC investments by examining how variations in shareholder protection shape VC contracting. It has underscored the importance of flexible corporate law to enable the tailor-made arrangements that define VC-backed firms' unique governance structure. Vice versa, it has also documented anecdotally how mandatory corporate laws can impede the adoption and use of some specific components of the U.S. contractual framework. This article contributes to this literature, first, by conceptualizing, in a general theoretical framework, the role that flexible or rigid corporate law in action plays in supporting or hindering VC. Second, it identifies the channels through which mandatory corporate law constrains VC contracting. Third, it documents the real-world significance of these phenomena by illustrating how the constraints stemming from the corporate law regimes in force in two European jurisdictions, namely Germany and Italy, impact the transplant of the contractual framework governing VC deals in the U.S. |
| Keywords: | Comparative Corporate Law, Comparative Corporate Governance, Entrepreneurship, Financial Contracting, Private ordering, Start-ups, Venture Capital |
| JEL: | G38 K22 L26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:313649 |