|
on Regulation |
|
Issue of 2005‒07‒18
five papers chosen by Christian Calmes Université du Québec en Outaouais, Canada |
| By: | Douglas Cumming (University of Alberta School of Business, Edmonton, Alberta, Canada); Daniel Schmidt (J.W. Goethe-Universität Frankfurt/Main and CEPRES); Uwe Walz (J.W. Goethe-Universität Frankfurt/Main and Center for Financial Studies) |
| Abstract: | We analyze governance with a dataset on investments of venture capitalists in 3848 portfolio firms in 39 countries from North and South America, Europe and Asia spanning 1971-2003. We find that cross-country differences in Legality have a significant impact on the governance structure of investments in the VC industry: better laws facilitate faster deal screening and deal origination, a higher probability of syndication and a lower probability of potentially harmful co-investment, and facilitate board representation of the investor. We also show better laws reduce the probability that the investor requires periodic cash flows prior to exit, which is in conjunction with an increased probability of investment in high-tech companies. |
| Keywords: | Venture Capital, Corporate Governance, Syndication, Entrepreneurial Finance |
| JEL: | G24 G31 G32 |
| Date: | 2004–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:cfs:cfswop:wp200417&r=reg |
| By: | Andreas Jobst (Federal Deposit Insurance Corporation (FDIC), Center for Financial Research (CFR), 550 17th Street NW, Washington, DC 20429, USA; London School of Economics and Political Science (LSE), Dept. of Finance and Accounting and Financial Markets Group (FMG); J.W. Goethe-Universität Frankfurt am Main, Dept. of Finance) |
| Abstract: | The paper provides a comprehensive overview of the gradual evolution of the supervisory policy adopted by the Basle Committee for the regulatory treatment of asset securitisation. We carefully highlight the pathology of the new “securitisation framework” to facilitate a general understanding of what constitutes the current state of computing adequate capital requirements for securitised credit exposures. Although we incorporate a simplified sensitivity analysis of the varying levels of capital charges depending on the security design of asset securitisation transactions, we do not engage in a profound analysis of the benefits and drawbacks implicated in the new securitisation framework. |
| Keywords: | Banking Regulation, Asset Securitisation, Basle Committee, Basle 2 |
| JEL: | E58 G21 G24 K23 L51 |
| Date: | 2004–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:cfs:cfswop:wp200421&r=reg |
| By: | Bunzel, Helle; Marcoul, Philippe |
| Abstract: | The “End Racial Profiling Act of 2001” (ERPA) states that “no law enforcement agent or law enforcement agency shall engage in racial profiling” and mandates states to “collect detailed data on stops, searches, seizures, and arrests.” We develop a stylized dynamic model of highway policing to study the long-run consequences of ERPA. In the model, color-neutral police officers receive incentives to arrest criminals, but face a per stop cost which increases when the racial mix of the interdicted differs from the racial composition of the population. Incarceration rates are defined to be racially “fair” if the racial composition of the prison and criminal population is identical. The model predicts that the long-term racial composition of the prison population may not be fair and that ERPA may increase fairness. Ceteris paribus, however, ERPA may lower efficiency (the number of criminals in jail). Finally, we characterize and compare the incentive schemes for crime fighting that a government would optimally set with and without ERPA. |
| Date: | 2005–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12397&r=reg |
| By: | Haldun Evrenk (Suffolk University) |
| Abstract: | This paper examines causes of the persistence of corruption among elected politicians and the effectiveness of some commonly discussed anti-corruption reforms. We study a theoretical model of competition between two candidates who differ both in ability and popularity in a probabilistic voting setup. Each candidate proposes a tax rate and a public good level. The elected candidate's ability determines the cost of producing the public good. The budget constraint implies that taxes collected must equal the sum of funds used in public good production plus funds stolen by the elected politician. We solve for the tax rate and public good level chosen by each candidate and how much each candidate decides to steal. We then identify conditions under which (i) imposing constitutional constraints such as tax rate (upper) or public good (lower) limits, (ii) increasing compensation of elected politicians, and (iii) small changes in legal penalties, will reduce corruption and increase voters' welfare. We find that the designers of a successful reform need to have information that is privately held by candidates. The redistributive effects of a reform and how that would affect the popularity of the reform is discussed as well. Finally, we argue that a welfare-improving reform that would reduce the corruption may not be supported by both corrupt and honest politicians. |
| Keywords: | corruption, reform, constitutional limits |
| JEL: | C7 D8 |
| Date: | 2005–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpga:0507005&r=reg |
| By: | Caitlin Knowles Myers (Middlebury College and IZA Bonn) |
| Abstract: | Proposition 209, enacted in California in 1996 and made effective the following year, ended state affirmative action programs not only in education, but also for public employment and government contracting. This paper uses CPS data and triple difference techniques to take advantage of the natural experiment presented by this change in state law to gauge the labor market impacts of ending affirmative action programs. Employment among women and minorities dropped sharply, a change that was nearly completely explained by a decline in participation rather than by increases in unemployment. This decline suggests that either affirmative action programs in California had been inefficient or that they failed to create lasting change in prejudicial attitudes. |
| Keywords: | economics of gender and minorities, affirmative action, Proposition 209, discrimination |
| JEL: | J71 J78 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1674&r=reg |