|
on Regulation |
| By: | BERGANTINO, Angela Stefania; DE VILLEMEUR, Etienne; VINELLA, Annalisa |
| JEL: | L11 L13 L51 L9 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:6379&r=reg |
| By: | DE VILLEMEUR, Etienne; GUI, Benedetto |
| JEL: | D42 D62 H21 H23 L51 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7307&r=reg |
| By: | Marcin Pracz; Rod Tyers |
| Abstract: | Australia’s principal container ports, located in its state capitals, are owned and operated by state authorities that largely return profits from port operations to state governments. Since they govern the volumes of trade in most merchandise, they command immense influence over the openness and flexibility of the national economy. In this study, we estimate the elasticities of substitution between services of ports in Brisbane, Sydney and Melbourne. We also examine the pricing of port services to estimate the extent of their interaction, from which we derive conjectural variations parameters to assess the actual and potential levels of price collusion. The results confirm that there is considerable potential for destructive oligopoly behaviour and that pricing by the apparently isolated Port of Melbourne has been effectively controlled by price-cap regulation. The services of the ports of Sydney and Brisbane are comparatively substitutable, however. Although their regulation appears to be less restrictive, this substitutability appears to result in some level of competition, which aids in the control of pricing. |
| JEL: | L92 L51 C51 D21 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2006-471&r=reg |
| By: | Lamanna, Francesca; Gonzalez, Alvaro S. |
| Abstract: | This paper investigates who is most affected by informal competition and how regulation and enforcement affect the extent and nature of this competition. Using newly-collected enterprise data for 6,466 manufacturing formal firms across 14 countries in Latin America, the authors show that formal firms affected by head-to-head competition with informal firms largely resemble them. They are small credit constrained, underutilize their productive capacity, serve smaller customers, and are in markets with low entry costs. In countries where the government is effective and business regulations onerous, formal firms in industries characterized by low costs to entry feel the sting of informal competition more than in other business environments. Finally, the analysis finds that in an economy with relatively onerous tax regulations and a government that poorly enforces its tax code, the percentage of firms adversely affected by informal competition will be reduced from 38.8 to 37.7 percent when the government increases enforcement to cover all firms. |
| Keywords: | Microfinance,Economic Theory & Research,Emerging Markets,E-Business,Banks & Banking Reform |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4316&r=reg |
| By: | Donato Masciandaro; Maria Nieto; Henriette Prast |
| Abstract: | This paper focuses on the financing of banking supervision. Countries are classified according to who finances banking supervision the tax payer and/or the supervised industry -, and how the budget and fees are determined. We show that funding regimes differ across countries. Public funding is more often found when banks are supervised by the central bank, while supervision funded via a levy on the regulated banks is more likely in the case of a separate financial authority. Finally, some countries apply mixed funding. In general, there is a trend toward more private funding. We also find a relation between sources of financing and accountability arrangements. Public financing is associated with accountability towards the parliament, while private financing is more likely to go hand in hand with accountability towards the government. The financing issue is important because the financing regime may affect the behaviour of the supervisor and hence the quality of supervision. Regulatory capture, industry capture and the supervisor's self interest may affect supervisory policy. No theoretical model has been developed prescribing the optimal financing of supervision. Our results suggest that the actual choice of financing is a casual one, not based on either considerations of incentive-compatability or on the beneficiary approach. As it is to be expected that financial regulation will become more internationally organized in the future, careful analysis of the financing issue will become even more relevant. |
| Keywords: | banking supervision; budgetary independence; accountability; financial governance; central banks; financial authorities. |
| JEL: | C33 G3 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:141&r=reg |
| By: | Seira, Enrique; Piedra, Eduardo; Kaplan, David S. |
| Abstract: | The authors estimate the effect on business start-ups of a program that significantly speeds up firm registration procedures. The program was implemented in Mexico in different municipalities at different dates. Authors estimates suggest that new start-ups increased by about 4 percent in eligible industries, and the authors present evidence that this is a causal effect. Most of the effect is temporary, concent rated in the first 10 months after implementation. The effect is robust to several specifications of the benchmark control group time trends. The authors find that the program was more effective in municipalities with less corruption and cheaper additional procedures. |
| Keywords: | Corporate Law,Microfinance,Regional Governance,Urban Governance and Management,Urban Partnerships & Poverty |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4322&r=reg |
| By: | Littlechild, S. |
| Abstract: | Ohio allows communities to vote to aggregate the loads of individual consumers (unless they opt out) in order to seek a competitive energy supplier. Over 200 communities have voted to do this for electricity. By 2004 residential switching reached 69% in Cleveland territory (95% from municipal aggregation) but by 2006 had fallen to 8%. Savings are now small, but customer acquisition costs are low and the cost to consumers is negligible. Aggregation and retail competition have been thwarted by Rate Stabilization Plans holding incumbent utility prices below cost since 2006. In the Ohio gas sector, rate regulation has not discouraged aggregation and competition, but market prices falling below municipally negotiated rates can be politically embarrassing. How municipal aggregation would fare against individual choice in a market conducive to retail competition is an open question, but the policy deserves consideration elsewhere. Key words: Municipal aggregation, retail competition, electricity, gas, Ohio, regulation. |
| JEL: | L33 L43 L51 L94 L98 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0739&r=reg |
| By: | Barbry, Eric |
| Abstract: | For some, Web 2.0 is a "simple" evolution of the current web; for others, Web 2.0 is a real revolution. Web 2.0 is, in fact, a "revolutionary evolution." Technically speaking, Web 2.0 is a "simple" evolution because it is not a technical "breakthrough," as it is essentially based on an aggregation of existing technologies. However, the impact of Web 2.0 is such that it can actually be described as an evolution that will shake our sociological, economic and legal bases. This paper addresses the legal aspects of Web 2.0 and tries to explain that while Web 2.0 is not a lawless domain, it is highly likely to create a legal tsunami. |
| Keywords: | Web 2.0; regulation; law; case law; blogs; liability; intellectual property; personal data; knowledge management; collaborative space and employment law. |
| JEL: | M50 C51 K21 L96 K29 C52 C10 O33 L32 K23 C23 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4583&r=reg |
| By: | Kenneth Ayotte; Patrick Bolton |
| Abstract: | In this paper we propose a theory of optimal property rights in a financial contracting setting. Following recent contributions in the property law literature, we emphasize the distinction between contractual rights, that are only enforceable against the parties themselves, and property rights, that are also enforeceable against third parties outside the contract. Our analysis starts with the following question: which contractual agreements should the law allow parties to enforce as property rights? Our proposed answer to this question is shaped by the overall objective of minimizing due diligence (reading) costs and investment distortions that follow from the inability of third-party lenders to costlessly observe pre-existing rights in a borrower's property. Borrowers cannot reduce these costs without the law's help, due to an inability to commit to protecting third-parties from redistribution. We find that the law should take a more restrictive approach to enforcing rights against third-parties when these rights are i) more costly for third-parties to discover, ii) more likely to redistribute value from third-parties, and iii) less likely to increase efficiency. We find that these qualitative principles are often reflected in observed legal rules, including the enforceability of negative covenants; fraudulent conveyance; corporate veil-piercing; and limits on assignability. |
| JEL: | K11 K12 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13316&r=reg |
| By: | William R. Eadington (Department of Economics, University of Nevada, Reno) |
| Abstract: | This study examines the conflicts within the European Union regarding protected status accorded to legal commercial gaming industries and the principles of harmonization that direct EU economic policy. Member States are permitted to constrain competition for gambling services as long as the primary purpose is to protect citizens from unintended negative consequences associated with the activities. Also, because of monopoly status, high tax rates, or government ownership, many EU gaming industries have become major contributors to government coffers or for funding for “good causes.” Legal challenges by private companies trying to participate in these protected markets have led to decisions by the European Court of Justice that have questioned such protected status. A number of key economic metrics for European gaming industries are presented, and competitive dimensions of EU casino industries are examined in comparisons to trends elsewhere. |
| Keywords: | regulation, gambling, European Union, harmonization |
| JEL: | K23 L43 L83 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:unr:wpaper:07-005&r=reg |
| By: | Jiménez-Rodríguez, Rebeca; Russo, Giuseppe |
| Abstract: | A well-established result in the literature on labour market flexibility is that employment is more volatile in "flexible" labour markets. Over the last 35 years, Italy gives a good example of a transition from an over-regulated labour market into a quite more flexible one. According to the theory, the deregulation should alter the employment volatility. Anecdotal evidence reported in the press shows growing concerns for increased uncertainty, low wages and short-tenured jobs. To check whether institutional reforms have changed the labour market volatility, we test for the existence of changes in the volatility of different employment indicators. We find that while employment has indeed become less volatile, standard units of labour have become more volatile at the same time. We argue that this can be explained by working time adjustment and increased job-to-job mobility, rather than by mobility from employment to unemployment. This seems to confirm the concerns for increased job insecurity and also indicates that the deregulation may have been successful in reducing unemployment. |
| Keywords: | Labour market regulation; institutions; volatility; breaks. |
| JEL: | J23 C22 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4519&r=reg |
| By: | Niinimäki , Juha-Pekka (Bank of Finland Research) |
| Abstract: | There is substantial evidence that new banks and rapidly growing banks are risk prone. We study this problem by designing a relationship-lending model in which a bank operates as a financial intermediary and centralised monitor. In the absence of deposit insurance, the bank’s limited liability option creates an incentive problem between the bank and its depositors, the likely outcome of which is a reduction in the amounts of resources allocated to monitoring its borrowers. Hence, the bank must signal its safety to depositors by maintaining the equity ratio held. The optimal equity ratio is dynamic, ie new banks need relatively more equity than established banks, which enjoy profitable old lending relationships – charter value – that reduce the incentive problem. However, if an established bank grows rapidly, its share of old relationships also decreases and the bank will have to raise its equity ratio. With deposit insurance, regulators should set higher equity requirements for new banks and rapidly growing banks than for those in a more established position. The results of the model can be extended to more general inter-firm control of credit institutions. |
| Keywords: | financial intermediation; relationship banking; financial fragility; bank regulation; deposit insurance; moral hazard; product quality |
| JEL: | G11 G21 G28 |
| Date: | 2007–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2001_016&r=reg |
| By: | Christopher C. Klein |
| Abstract: | The U.S. Supreme Court held that litigation for anticompetitive ends (“sham litigation”) must be “baseless” in order to face antitrust liability. The filing of such suits continues apace, as does the legal commentators’ debate, but economic analysis has lagged. Here, a game theoretic model is constructed in which plaintiffs file suit to achieve collateral gains and defendants may countersue for damages under the Sherman Act. In equilibrium, settlement fails and all suits are litigated, but the threat of countersuit deters low-expected-value plaintiffs. As the legal standard for sham litigation approaches “baselessness,” this deterrence effect is weakened and litigation may increase. |
| Keywords: | antitrust, sham litigation, countersuit |
| JEL: | K21 L41 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200713&r=reg |
| By: | Harabi, Najib |
| Abstract: | The purpose of this paper is to assess the state of corporate governance as a major factor affecting the growth performance of the private sector in MENA countries. For this purpose both country-specific assessments, carried out by World Bank-IMF teams (so-called ROSC’s assessments) and focus-group discussions that took place in four regional conferences have been synthesized. Strengths and weaknesses of corporate governance in selected Arab countries have been highlighted. One major key finding is that the legal and regulatory frameworks of the assessed Arab countries are largely compliant with the OECD Principles of corporate governance. However, practices are not. The difficulty of the assessments is to reflect properly the discrepancies between the letter of the law and compliance. It should be emphasized that the World Bank-IMF assessments focus on listed companies. No-listed firms, especially SME, family-owned firms and State-owned enterprises that make up to 98% of all firms, are not subject to assessments. Another key finding that emerged from our reviewing of the regional conferences on corporate governance is that corporate governance issues have not been ignored in public debates in the MENA region. Practitioners from capital markets, banks, public and private sector representatives and other civil society groups have accepted the need to address corporate governance reforms as one of the crucial topics affecting the economic growth and development of firms, industries and whole economies in their region. Several meetings and conferences at the national and regional level have taken place. Appropriate and up-to-date recommendations regarding corporate governance reform in the MENA region have been adopted in those events. It is now up to the decision makers at all levels to implement those recommendations |
| Keywords: | Corporate Governance; Governance; state and business; business regulations; corporate finance; economic development; Arab countries; Middle East and North Africa |
| JEL: | G3 O16 G38 |
| Date: | 2007–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4566&r=reg |
| By: | Ignacio Velez-Pareja; Rauf Ibragimov; Joseph Tham; Daniel Toro |
| Abstract: | In this teaching note, we discuss the basic principles for tariff setting. Tariff setting is very important for regulated industries, such as water and power. The tariff should provide an appropriate risk-adjusted return to the investor. If the tariff were too low, then the investors would not be willing to invest. On the other hand, if the tariff were too high, then it would reduce the consumers’ welfare. We examine the Rate of Return method for calculating the tariff in a regulated firm. In the rate of return method, the tariff compensates the investor for all the costs that the investor incurs, including a fair return. We use the discounted cash flow approach to value the return that the investor receives. The results of both calculations must be consistent. In particular, using simple examples, we show that in the presence of a positive expected inflation rate, the typical tariff calculation, Rate of return method, is an overestimation of the required payment to the equity holder. |
| Date: | 2007–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:col:000162:003942&r=reg |