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on Regulation |
| By: | Calzolari, Giacomo; Scarpa, Carlo |
| Abstract: | We analyze the design of optimal regulation of a domestic monopolist that also competes in an unregulated foreign market. We show how foreign activities by the regulated firm affect domestic regulation, consumers’ surplus and firm’s profits. Although expansion in unregulated foreign markets amplifies the regulatory distortions that are caused by the regulator’s limited information, we also show that allowing the firm to compete abroad does not necessarily harm domestic consumers and we analyze if and when the firm’s decision to expand abroad does in fact coincide with consumers’ interests in the regulated market. |
| Keywords: | Foreign Competition; Multinational Enterprises; National Champions; Regulation |
| JEL: | F23 L51 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6413&r=reg |
| By: | Geethanjali Selvaretnam |
| Abstract: | Banks fail because of bad economic fundamentals, or panic withdrawals by depositors. We show that even though there is no need for regulation when the bank’s policy regarding its solvency is transparent, there is indeed need for regulation if there is a lack of transparency. When the bank has private information, it chooses lower reserves and higher early returns than what maximises depositor welfare, which increases the probability of bank runs. Therefore the regulators should .x a maximum for early return and minimum for reserves. With transparency, there is excess reserves, and this inefficiency increases with the proportion of impatient agents. |
| Keywords: | Early return, global game, optimal reserves, regulation, transparency. |
| JEL: | D82 G21 G28 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmawp:0714&r=reg |
| By: | Kenny, Charles |
| Abstract: | Governance is central to development outcomes in infrastructure, not least because corruption (a symptom of failed governance) can have significantly negative impact on returns to infrastructure investment. This conclusion holds whether infrastructure is in private or public hands. This paper looks at what has been learned about the role of governance in infrastructure, provides some recent examples of reform efforts and project approaches, and suggests an agenda for greater engagement - primarily at the sector level - to improve governance and reduce the development impact of corruption. The discussion covers market structure, regulation, state-owned enterprise reform, planning and budgeting, and project design. |
| Keywords: | Banks & Banking Reform,Public Sector Corruption & Anticorruption Measures,National Governance,Governance Indicators,Transport Economics Policy & Planning |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4331&r=reg |
| By: | Cole, Rebel; Turk, Rima |
| Abstract: | Numerous papers in the “law and finance” literature have established that countries with better functioning legal institutions enjoy better developed capital markets, and that legal origin is a fundamental determinant of legal institutions (La Porta et al. 1997, 1998, 2006; Djankov et al. 2007). In this study, we test whether banks are willing to grant more credit to the private sector when they enjoy superior legal protection. We test this hypothesis using bank-level data from 45 emerging-market countries and a random-effects model that controls for bank heterogeneity. We find that lenders allocate a significantly higher portion of their assets to loans (i) where they enjoy English legal origin rather than French or Socialist legal origin; (ii) where enforcement of debt contracts is more efficient and (iii) where banks enjoy fewer restrictions on their operations. These support our hypothesis that superior legal protection leads to more bank credit, which, in turn, should lead to higher economic growth. |
| Keywords: | banking; creditor rights; emerging markets; investor protection; legal origin |
| JEL: | O16 G34 G21 |
| Date: | 2007–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4713&r=reg |
| By: | Mengistae, Taye; Honorati, Maddalena |
| Abstract: | This paper estimates a dynamic business growth equation on a sample of small-scale manufacturers. The results suggest that excessive labor regulation, pow er shortages, and problems of access to finance are significant influences on industrial growth in India. The expected annual sales growth rate of an enterprise is lower where labor regulation is greater, power shortages are more severe, and cash flow constraints are stronger. The effects of each of the three factors on business growth seem also to depend on a fourth element, namely, corruption. Specifically, labor regulation affects the growth only of enterprises for which corruption is not a factor in business decisions. By contrast, power shortages seem to be a drag on the growth only of enterprises self-reportedly held back by corruption. Lastly, sales growth is constrained by cash flow only in businesses that are not affected by labor regulation, power shortages, or corruption. The analysis uses corruption as a proxy for the quality of " property rights institutions " and considers labor regulation and small business financing as instances of " contracting institutions. " The findings on the interaction between corruption and other aspects of business environment then seems to indicate that the quality of property rights institutions exerts more abiding influence on economic outcomes than the quality of contracting institutions. Moreover, there might also be a hierarchy among contracting institutions in their effect on manufacturing growth. |
| Keywords: | Labor Markets,Labor Policies,Economic Growth,Access to Finance,Pro-Poor Growth and Inequality |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4338&r=reg |
| By: | Thomas P. Lyon (Ross School of Business, University of Michigan); John W. Maxwell (Department of Business Economics and Public Policy, Indiana University Kelley School of Business) |
| Abstract: | We survey the growing theoretical literature on the motives for and welfare effects of corporate greening. We show how both market and political forces are making environmental CSR profitable, and we also discuss morally-motivated or altruistic CSR. Welfare effects of CSR are subtle and situation-contingent, and there is no guarantee that CSR enhances social welfare. We identify numerous areas in which additional theoretical work is needed. |
| Keywords: | corporate social responsibility, environment, self-regulation, preemption, private politics |
| JEL: | Q58 D51 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:iuk:wpaper:2007-16&r=reg |
| By: | V. Thiruppugazh |
| Abstract: | This article examines the causes of urban earthquake vulnerability in Gujarat, based on the case study of Ahmedabad city which was affected in the 2001, Gujarat earthquake. This paper argues that the non-compliance of regulations which causes urban vulnerability cannot be corrected merely by additional regulations or increased enforcement. An enabling environment of compliance of regulations can be achieved only though good enforcement mechanism, integration of development with vulnerability reduction, good governance practices, awareness creation, partnerships and capacity building. |
| Keywords: | urban vulnerability, risk reduction, vulnerability reduction,earthquake vulnerability, regulations, mitigation |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2007-08&r=reg |
| By: | Levkov, Alexey; Levine, Ross; Beck, Thorsten |
| Abstract: | Policymakers and economists disagree about the impact of bank regulations on the distribution of income. Explo iting cross-state and cross-time variation, the authors test whether liberalizing restrictions on intra-state branching in the United States intensified, ameliorated, or had no effect on income distribution. The analysis finds that branch deregulation lowered income inequality by affecting labor market conditions, not by boosting the business income of the poor, nor by enhancing educational attainment. Reductions in the earnings gap between men and women and between skilled and unskilled workers account for the bulk of the explained drop in income inequality. |
| Keywords: | Emerging Markets,Economic Theory & Research,Inequality,,Fiscal & Monetary Policy |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4330&r=reg |