|
on Regulation |
|
Issue of 2006‒12‒01
seven papers chosen by Christian Calmes Universite du Quebec en Outaouais, Canada |
| By: | COCO GIUSEPPE; DE VINCENTI CLAUDIO |
| Abstract: | This paper demonstrates, in a dynamic model of monopoly regulation with price-cap, that a periodical price review may increase productive efficiency. When the firm’s choice of cost-reducing effort depends on the output supplied, a revision allows the regulator to set more binding prices thus inducing the monopolist to exert more cost-reducing effort in the future. In a continuous-time setting, we find the optimal timing for the review from a cost-efficiency point of view and the conditions under which, within a given concession period, a single full rate base review improves cost-efficiency and by this route the optimal number of reviews. This number depends on the length of the concession period in relation to the slope of the demand function and the intensity of the disutility of effort. This result adds a theoretical argument in favour of the practice of periodical reviews in price-cap regulation and provides regulators with a basis for calculation of the optimal regulatory lag. JEL classification: L 51, D42 |
| Keywords: | Price-cap; Rate base review. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceiswp:223&r=reg |
| By: | John Armour; David A. Skeel, Jr. |
| Abstract: | Hostile takeovers are commonly thought to play a key role in rendering managers accountable to dispersed shareholders in the "Anglo-American" system of corporate governance. Yet surprisingly little attention has been paid to the very significant differences in takeover regulation between the two most prominent jurisdictions. In the UK, defensive tactics by target managers are prohibited, whereas Delaware law gives US managers a good deal of room to maneuver. Existing accounts of this difference focus on alleged pathologies in competitive federalism in the US. In contrast, we focus on the "supply-side" of rule production, by examining the evolution of the two regimes from a public choice perspective. We suggest that the content of the rules has been crucially influenced by differences in the mode of regulation. In the UK, self-regulation of takeovers has led to a regime largely driven by the interests of institutional investors, whereas the dynamics of judicial law-making in the US have benefited managers by making it relatively difficult for shareholders to influence the rules. Moreover, it was never possible for Wall Street to "privatize" takeovers in the same way as the City of London, because US federal regulation in the 1930s both pre-empted self-regulation and restricted the ability of institutional investors to coordinate. |
| Keywords: | Hostile takeovers; History of corporate law; Comparative corporate law; Self-regulation; Institutional investors; Evolution of law; Anglo-American corporate governance |
| JEL: | G23 G34 G38 K22 N20 N40 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp331&r=reg |
| By: | Simon Deakin; Richard Hobbs |
| Abstract: | We present a model of CSR as a set of mechanisms for aligning corporate behaviour with the interests of society in reducing externalities and promoting a sustainable corporate sector. These mechanisms include voluntary action by companies to go above minimum legal standards, with the aim of enhancing competitiveness ('action beyond compliance'); interventions by regulators designed to promote self-regulation by industry ('reflexive law'); and steps taken by shareholders to put pressure on companies to make effective use of corporate assets (shareholder engagement). We then assess the degree to which the model is realized in current British practice. Focusing on the issue of working conditions, we find managerial resistance to the linking of CSR with internal employee relations, and obstacles to shareholder engagement on this issue. |
| Keywords: | Corporate social responsibility; Shareholder engagement; Reflexive law; Labour standards |
| JEL: | K22 M14 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp333&r=reg |
| By: | Eijffinger,Sylvester C.W.; Rossi,Alberto G.P. (Tilburg University, Center for Economic Research) |
| Abstract: | The paper focuses on labor and product market deregulations, as fundamental elements in the passage from an investment to an innovation-based economy. The approach undertaken is prominently empirical. After a very brief description of the regulatory levels on the two sides of the Atlantic, we take two cornerstone theoretical models: one developed by Robert Gordon (1997), the other developed by Blanchard and Giavazzi (2003) and we observe how well their theoretical predictions are supported by hard data. We conclude with an independent study on the accuracy of the IMD competitiveness index in predicting the overall economic performance of countries close to the technological frontier. |
| Keywords: | employment;unemployment;wages;growth;regulation;productivity;IMD |
| JEL: | E24 D24 L16 J50 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2006112&r=reg |
| By: | Liu, Zhen |
| Abstract: | The US Security and Exchange Commission implemented Regulation Fair Disclosure in 2000, requiring that an issuer must make relevant information disclosed to any investor available to the general public in a fair manner. Focusing on firms that are affected by the regulation, we propose a model that characterizes the behavior of two types of investors\----one professional investor and many small investors\----in the regimes before and after the regulation, i.e., under selective disclosure and fair disclosure. In particular, we introduce the concept of awareness and allow investors to be aware of relevant information symmetrically or asymmetrically. We show that with symmetric awareness, fair disclosure induces both a low cost of capital and a low cost of information, therefore making the market efficient. Also, the professional investor collects an equal level of information under fair disclosure than under selective disclosure. However when small investors are not fully aware, fair disclosure still induces a low cost of capital but may induce a high cost of information. The professional investor may deliberately collect less information under fair disclosure than under selective disclosure. With asymmetric awareness, our theory produces predictions that match the empirical findings by Ahmed and Schneible Jr. (2004) and Gomes, Gorton, and Madureira (2006). They find that small and complex firms are negatively affected by the regulation. We also show that fair disclosure improves the welfare of small investors when they are extremely unaware. Such results are not compatible with the standard symmetric awareness assumption. |
| Keywords: | Reg FD; Regulation Fair Disclosure; Information Disclosure; Fair Disclosure; Selective Disclosure; Unawareness; Asymmetric Awareness |
| JEL: | G38 D82 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:917&r=reg |
| By: | José Ramón Ruiz Tamarit (Universitat de València); Manuel Sánchez Moreno (Universitat de València) |
| Abstract: | This paper develops a two-sector model for a renewable natural resource based economy. Pareto efficient results show the optimal harvesting rate that allows for sustained long-run optimal growth, which is upper-bounded by the biological rate of reproduction. Regulation prevents from resource over-exploitation and exhaustion which arise under open access. The Ramsey policy allowing the competitive economy to reach the first-best solution, leads the government to tax harvesting activity from firms and distribute the receipts among households. In the short-run the tax is variable. In the long-run, the lower the intrinsic rate of reproduction the higher the constant unit tax on the resource use. |
| Keywords: | Natural Resources, Efficiency, Open Access, Ramsey Regulation, Growth. |
| JEL: | C62 D90 O41 Q2 H2 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2006-21&r=reg |
| By: | Mustapha Sadni Jallab (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); René Sandretto (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Monnet Gbakou (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]) |
| Abstract: | This paper aims at extending some recent publications about the relationship between antidumping filings and macroeconomic factors by comparing the United States (US) and the European Union (EU), two major users of antidumping procedures. Results of our estimations confirm that the exchange rate exerts a similar influence in the two countries. Fluctuations in the real GDP influence antidumping filings only in the US. On the contrary, the evolution of industrial production does not play an important role in the US, while its impact is important in Europe. The reinforcement of international competition appears to significantly increase antidumping filings in the US while this relationship turns out not to be significant in Europe. Finally, some of the most important differences between the US and the EU seem to be explainable by the differences of<br />rules and practices implemented by the regulatory authorities. |
| Keywords: | dollar euro exchange rate ; antidumping initiations ; negative binomial model ; unfair trade |
| Date: | 2006–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00112311_v1&r=reg |