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on Law and Economics |
| By: | Enriques, Luca; Nigro, Casimiro A.; Tröger, Tobias |
| Abstract: | A vast literature has examined the contractual technology that venture capital (VC) funds and entrepreneurs deploy in the U.S. to define an agency cost-minimising structure of their relationship, leading many to conclude that U.S. VC contracts are the best real-world solution to the challenges bedeviling the financing of high-tech innovative startups and a model for VC transactional practice worldwide. Yet, whether VC funds and entrepreneurs can replicate the allocation of cash-flow and control rights resulting from U.S. VC contracts in non-U.S. jurisdictions has long been open to discussion. Research by financial economists and legal scholars have reached diverging conclusions. The existing literature exhibits three limitations, though. First, it has generally investigated at most only how a subset of the individual components of U.S. VC contracts fare under non-U.S. corporate laws. Second, it has typically considered the law on the books as opposed to the law in action. Third, it has relied on a loose definition of what qualifies as an effective substitute. This article examines how U.S. VC contracts fare under the corporate law regimes in force in two important European jurisdictions: Germany and Italy. It does so by taking a new approach to the matter. First, it considers the entire set of arrangements included in U.S. VC contracts rather than a sample. Second, it assesses the legality of those arrangements in the light of the applicable corporate law in action rather than the law on the books. Third, in assessing arrangements that deviate from U.S. private ordering solutions due to restrictive corporate law, it focuses on contract functionality rather than contract design. The results of the inquiry are straightforward: German and Italian corporate laws literally crash contracting parties' ambition to transplant U.S. VC contracts into their own jurisdictions and only allow for alternative arrangements that, if available at all, are costlier and/or less functional. |
| 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:324639 |
| By: | Jerg Gutmann; Pascal Langer; Matthias Neuenkirch |
| Abstract: | A major concern about the imposition of international sanctions is that they may permanently deteriorate the quality of institutions in target countries, potentially causing an increase in corruption. While case studies suggest that this is frequently the case, systematic evidence is so far missing. We provide the first cross-country statistical analysis of the impact of sanctions on public-sector corruption. Using a panel difference-in-differences model and an event study approach, we analyze sanctions against 125 countries from 1971 to 2019. Our results show that Western (and UN) sanctions cause a significant decline of corruption in democracies, while non-Western sanctions and those targeting autocracies have no systematic impact. Event study estimates time the reductions in corruption at about three to four years into the sanctions episode. They persist throughout the sanctions period, but once sanctions are lifted, corruption levels revert to their pre-treatment baseline, indicating that the corruption-reducing effect is limited to the duration of the sanctions episode. Further analysis reveals that the effect is stronger when sanctions explicitly target democratization or human rights improvements. |
| Keywords: | International sanctions, Corruption, Governance |
| JEL: | D73 F51 K33 K42 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:trr:wpaper:202506 |
| By: | François Bonnet (PACTE - Pacte, Laboratoire de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - IEPG - Sciences Po Grenoble-UGA - Institut d'études politiques de Grenoble - UGA - Université Grenoble Alpes) |
| Abstract: | The principle of less eligibility posits that assistance must be less attractive than low-wage work, and that punishment must make crime less attractive than low-wage work or welfare. Much of the literature dismisses less eligibility as outdated and reactionary. In fact, less eligibility is neither a doctrine nor a policy prescription. It assumes that individuals respond to incentives based on the relative desirability of low-wage work, assistance, and crime. Maintaining a gap in desirability between these options is structurally necessary to sustain low-wage labor supply and contain crime. The literature on the causal relations that make up less eligibility shows that increased welfare generosity decreases the labor supply for low-wage work; that making low-wage work more desirable reduces crime; and that increased welfare generosity also reduces crime. These effects are supported by a wealth of econometric evidence, suggesting the plausibility of less eligibility through robust microfoundations. The implied trade-offs are objective realities, indifferent towards normative inclinations. The main macro-level implication is to explain the oft-noted but under-theorized inverse relation between welfare and punishment. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-05165960 |
| By: | Clair, Matthew (University of Pennsylvania) |
| Abstract: | This paper reviews cultural sociological approaches to the study of law and how they may be applied to future research on law-related social crises. As the world faces myriad social crises, such as rising authoritarianism and police violence, the study of culture and the law has become an even more urgent intellectual and practical endeavor. Over the last decade, five concepts have dominated the cultural study of law: rules, norms, frames, cultural capital, and legal consciousness. While past research has provided generative insight, future research would benefit from more precise considerations of rules and norms in this unsettled moment. Moreover, future research could leverage the five cultural concepts to sharpen understandings of inequality and social control in understudied legal organizations, along understudied axes of social stratification, and with respect to the infusion of new technologies into the legal system. |
| Date: | 2025–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:vd3a6_v1 |
| By: | Dominika Langenmayr; Mikayel Tovmasyan; Sebastian Vosseler |
| Abstract: | Are sanctions bypassed by hiding money offshore? Using bilateral data on bank deposits, we compare how offshore deposits from sanctioned versus non-sanctioned countries develop after the U.S. and the EU impose financial sanctions. Sanctions targeting individuals increase offshore deposits, as (potential) targets attempt to hide their funds. Broader financial sanctions reduce offshore (and other foreign) deposits, as money is repatriated. A synthetic control case study of Russia following the annexation of Crimea confirms our main findings, showing a 15% post-sanction increase in offshore deposits. These findings highlight the limits of symbolic sanctions and the need for secondary sanctions and financial surveillance. |
| Keywords: | sanctions, tax havens, illicit financial flows |
| JEL: | F51 H12 K42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12086 |