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on Regulation |
| By: | Firat Cengiz (School of Law and Centre for Competition Policy, University of East Anglia) |
| Abstract: | This paper analyses the raison d’être of the current initiative for the federal policy change in the US regarding the issues of passing-on defense and indirect purchaser standing in order to draw policy lessons for the EC in the light of the Commission’s Green Paper on private enforcement of Community competition law. The paper finds that transatlantic policy learning in the substantive sense does not seem plausible due to the dramatic difference between the American rationale regarding the goals of private enforcement and the European doctrine of direct effect. Nevertheless, the paper argues that the US experience contains important policy lessons regarding the risks brought forward by private enforcement under diverse standards in the lack of effective judicial cooperation mechanisms in a multi-level polity. After analysing the current positions of the Community and national laws from this perspective, the paper finds that there is substantial room for diversity amongst the national standards. In addition, although existing Community measures provide solid ground for judicial cooperation, those measures should be strengthened in order to avert the litigation chaos which forced a policy change in the US. Consequently, the paper suggests that the Commission gives substantial weight to the procedural aspects of private enforcement in its forthcoming White Paper which the Green Paper largely overlooked. |
| Keywords: | Private enforcement, indirect purchasers, Passing-on defense, Illinois Brick, Hanover Shoe, Antitrust Modernization Commission, European Commission Green Paper on actions for breach of the EC Antitrust Rules, Brussels I Regulation, Rome II Regulation |
| JEL: | K21 K41 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ccp:wpaper:wp07-21&r=reg |
| By: | Sonja Fagernas (University of Cambridge); Prabirjit Sarkar (Jadavpur University & University of Cambridge); Ajit Singh (University of Cambridge) |
| Abstract: | This paper uses a new time series dataset of shareholder protection consisting of 60 annual legal indicators for the period 1970-2005 for France, Germany, the UK and the US. On the basis of these data it examines developments in shareholder protection and reassesses the claims that common-law countries have better shareholder protection than civil law countries. Furthermore it examines the relationship between legal changes and stock market development. It casts serious doubt on the claim that common-law countries have better shareholder protection which in turn leads to more stock market development. |
| Keywords: | Stock Market, Corporate Governance, Financial Development, Leximetrics |
| JEL: | F02 F36 E44 G11 O16 K22 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:wef:wpaper:0023&r=reg |
| By: | Dennis Gaertner (Socioeconomic Institute, University of Zurich) |
| Abstract: | This paper investigates the design of incentives in a dynamic adverse selection framework when agents’ production technologies display learning effects and agents’ rate of learning is private knowledge. In a simple two-period model with full commitment available to the principal, we show that whether learning effects are over- or under-exploited crucially depends on whether learning effects increase or decrease the principal’s uncertainty about agents’ costs of production. Hence, what drives the over- or underexploitation of learning effects is whether more efficient agents also learn faster (so costs diverge through learning effects) or whether it is the less efficient agents who learn faster (so costs converge). Furthermore, we show that if divergence in costs through learning effects is strong enough, learning effects will not be exploited at all, in a sense to be made precise. |
| Keywords: | Asymmetric Information, Learning by Doing, Regulation |
| JEL: | D82 L14 L43 L51 O31 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:soz:wpaper:0718&r=reg |
| By: | Jacob A. Bikker; Laura Spierdijk; Paul Finniez |
| Abstract: | Using a measure of competition based on the Panzar-Rosse model, this paper explains bank competition across 76 countries on the basis of various determinants. Studies explaining banking competition are rare and typically insuffciently robust as they are based on a limited number of countries only. Traditionally, market structure indicators, such as the number of banks and banking concentration, have been considered the major determinants of competition in the banking sector. However, we find that these variables have no signiffcant impact on market power. Instead, we show that a country's institutional framework is a key factor in explaining banking competition. Extensive regulation, particularly antitrust policies, improves the competitive environment. The foreign investment climate, a proxy of contestability, also plays an important role. The fewer restrictions on foreign investments exist, the more competitive the banking sector becomes. In addition, activity restrictions make large banks less competitive and collusion markups are procyclical. Finally, competition is substantially weaker in countries with a socialist past, such as Central- and Eastern Europe. |
| Keywords: | banking competition; market structure; concentration; contestability; interindustry competition. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:156&r=reg |
| By: | Rahman, Aminur; Li, Quan; Jensen, Nathan M. |
| Abstract: | Since the early 1990s, a large number of studies have been undertaken to understand the causes and consequences of corruption. Many of these studies have employed firm-level survey data from various countries. While insightful, these analyses based on firm-level surveys have largely ignored two important potential problems: nonresponse and false response by the firms. Treating firms ' responses on a sensitive issue like corruption at their face value could produce incorrect inferences and erroneous policy recommendations. We argue that the data generation of nonresponse and false response is a function of the political environment in which the firms operate. In a politically repressive environment, firms use nonresponse and false response as self-protection mechanisms. Corruption is understated as a result. We test our arguments using the World Bank enterprise survey data of more than 44,000 firms in 72 countries for the period 2000-2005 and find that firms in countries with less press freedom are more likely to provide nonresponse or false response on the issue of corruption. Therefore, ignoring this systematic bias in firms ' responses could result in underestimation of the severity of corruption in politically repressive countries. More important, this bias is a rich and underutilized source of information on the political constraints faced by the firms. Nonresponse and false response, like unheard melodies, could be more informative than the heard melodies in the available truthful responses in firm surveys. |
| Keywords: | Public Sector Corruption & Anticorruption Measures,Microfinance,Access to Finance,Poverty Mo nitoring & Analysis,Social Accountability |
| Date: | 2007–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4413&r=reg |
| By: | Carine Swartenbroekx (National Bank of Belgium, Microeconomic Information Department) |
| Abstract: | Like other network industries, the European gas supply industry has been liberalised, along the lines of what has been done in the United Kingdom and the United States, by opening up to competition the upstream and downstream segments of essential transmission infrastructure. The aim of this first working paper is to draw attention to some of the stakes in the liberalisation of the gas market whose functioning cannot disregard the network infrastructure required to bring this fuel to the consumer, a feature it shares with the electricity market. However, gas also has the specific feature of being a primary energy source that must be transported from its point of extraction. Consequently, opening the upstream supply segment of the market to competition is not so obvious in the European context, because, contrary to the examples of the North American and British gas markets, these supply channels are largely in the hands of external suppliers and thus fall outside the scope of EU legislation on the liberalisation and organisation of the internal market in gas. Competition on the downstream gas supply segment must also adapt to the constraints imposed by access to the grid infrastructure, which, in the case of gas in Europe, goes hand in hand with the constraint of dependence on external suppliers. Hence the opening to competition of upstream and downstream markets is not "synchronous", a discrepancy which can weaken the impact of liberalisation. Moreover, the separation of activities necessary for ensuring free competition in some segments of the market is coupled with major changes in the way the gas chain operates, with the appearance of new markets, new price mechanisms and new intermediaries. Starting out from a situation where gas supply was in the hands of vertically-integrated operators, the new regulatory framework that has been set up must, on the one hand, ensure that competitive forces can be given free rein, and, on the other hand, that free and fair competition helps the gas chain to operate coherently, at lower cost and in the interests of consumers, for whom the stakes are high as natural gas is an important input for many industrial manufacturing processes, even a "commodity" almost of basic necessity. |
| Keywords: | network industries, gas industry, gas utility, liberalisation, regulation, deregulation, market structure, European gas supply, oligopoly, OPEG. |
| JEL: | D23 D43 L13 L43 L95 L97 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:docwpp:200711-29&r=reg |
| By: | Karen Banks |
| Keywords: | competences; European law; free movement; judicial review; non-discrimination |
| Date: | 2007–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0185&r=reg |