nep-reg New Economics Papers
on Regulation
Issue of 2008‒02‒09
eight papers chosen by
Christian Calmes
University of Quebec in Ottawa

  1. Where do firms incorporate? Deregulation and the cost of entry By Marco Becht; Colin Mayer; Hannes F. Wagner
  2. Regulatory and Policy Implications of Emerging Technologies to Spectrum Management By PUJOL, Frédéric
  3. The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India By Philippe Aghion; Robin Burgess; Stephen Redding; Fabrizio Zilibotti
  4. Emerging Technologies and Access to Spectrum Resources: the Case of Short-Range Systems By MINERVINI, Fulvio
  5. Why and how should innovative industries with high consumers’ switching costs be re-regulated? By Jackie Krafft; Evens Salies
  6. The Role of Licence-Exemption in Spectrum Reform By TONGE, Gary; DE VRIES, Pierre
  7. Productivity and environmental regulations - A long run analysis of the Swedish industry By Brännlund, Runar
  8. Why is Corruption Less Harmful in Some Countries Than in Others? By Keith Blackburn; Gonzalo F. Forgues-Puccio

  1. By: Marco Becht; Colin Mayer; Hannes F. Wagner
    Abstract: We study how deregulation of corporate law affects the decision of entrepreneurs of where to incorporate. Recent rulings by the European Court of Justice (ECJ) have enabled entrepreneurs to select their country of incorporation independently of their real seat. We analyze foreign incorporations in the U.K., where incorporations of limited liability companies can be arranged at low cost. Using data for over 2 million companies from around the world incorporating in the U.K., we find a large increase in cross-country incorporations from E.U. Member States following the ECJ rulings. In line with regulatory cost theories, incorporations are primarily driven by minimum capital requirements and setup costs in home countries. We record widespread use of special incorporation agents to facilitate legal mobility across countries.
    Keywords: Incorporation, costs of regulation, regulatory competition
    JEL: G38 K22
    Date: 2008
  2. By: PUJOL, Frédéric
    Abstract: This paper provides an overview of the policy implications of technological developments, and how these technologies can accommodate an increased level of market competition. It is based on the work carried out in the SPORT VIEWS (Spectrum Policies and Radio Technologies Viable In Emerging Wireless Societies) research project for the European Commission (FP6)
    Keywords: spectrum; new radio technologies; UWB; SDR; cognitive radio; Telecommunications; regulation; Networks; Interconnection
    JEL: L52
    Date: 2007–09
  3. By: Philippe Aghion; Robin Burgess; Stephen Redding; Fabrizio Zilibotti
    Abstract: We study whether the effects on registered manufacturing output of dismantling the License Raj – a system of central controls regulating entry and production activity in this sector – vary across Indian states with different labor market regulations. The effects are found to be unequal across Indian states with different labor market regulations. In particular, following delicensing, industries located in states with proemployer labor market institutions grew more quickly than those in proworker environments.
    Keywords: Distance to frontier, India, Industrial policy, Financial development, Labor regulation, Liberalization, Manufacturing, Reform.
    JEL: J52 L11 L52 O14 O24 O47 O53 P41
    Date: 2007–12
  4. By: MINERVINI, Fulvio
    Abstract: Traditional regulatory arrangements have constrained access to radio frequency spectrum. This has resulted in artificial scarcity of spectrum. The paper addresses the issue of whether technological developments in short-range systems (e.g. cognitive radios and ultra wideband) might promote access to spectrum - possibly using market mechanisms such as trading - and reduce spectrum shortages.
    Keywords: spectrum policy; spectrum access; emerging spectrum-using technology; Telecommunications; regulation; infrastructure
    JEL: L96
    Date: 2007–09
  5. By: Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis); Evens Salies (OFCE-DRIC - OFCE)
    Abstract: The existence of costs to consumers to switch between products is central to the process by which firms set prices. Their effect on the introduction and diffusion of innovative technologies is not by now well understood, however. This paper aims to study this effect based on evidence in the broadband Internet industry and to discuss the movement of deregulation implemented since the early 2000s in France, as well as the apparent emerging potential of re-regulation. We argue the presence of a cost to consumers to switch between technologies may impede the expected beneficial outcomes of self-regulation through competition in liberalised innovative industries as it has been implemented so far in several countries. We provide a measure of the cost to switch from ADSL to cable for retail consumers in France which supports the domination of the former technology. These results suggest that retail broadband Internet markets may need some sort of re-regulation, including new principles for competition policy, to avoid the unwanted effects of consumer switching costs.
    Date: 2008–02–05
  6. By: TONGE, Gary; DE VRIES, Pierre
    Abstract: Spectrum reform initiatives in the US and Europe have identified a need to move away from the traditional command and control approach towards flexible and tradable licences and licence-exemption. Current regulatory initiatives are tending to focus on the flexible licensing route, and there is a risk that licence-exemption will be sidelined during the important formative years of this major policy transition. This must not happen; licence-exemption supports innovation and entrepreneurship and is an important second leg of a market-based spectrum management regime. A current case in point is the transition in UHF frequency bands from analogue to digital TV, where licence exempt use of resulting gaps in the spectrum could yield enormous benefits for citizens and consumers.
    Keywords: spectrum policy; spectrum management; wireless services; deregulation; Telecommunications; regulation; Networks
    JEL: L52
    Date: 2007–09
  7. By: Brännlund, Runar (Department of Economics, Umeå University)
    Abstract: The aim with this study is to evaluate the potential effects on productivity development in the Swedish manufacturing industry due to changes in environmental regulations over a long time period. The issue is closely related to the so called Porter hypothesis, i.e. whether environmental regulations (the right kind) that usually is associated with costs triggers mechanisms that enhances efficiency and productivity that finally outweighs the initial cost increase. To test our hypothesis we use historical data spanning over the period 1913-1999 for the Swedish manufacturing sector. The model used is a two stage model were the total factor productivity is calculated in the first stage, and is then used in a second stage as the dependent variable in a regression analysis where one of the independent variables is a measure of regulatory intensity. The results show that the productivity growth has varied considerably over time. The least productive period was the second world war period, whereas the period with the highest productivity growth was the period after the second world war until 1970. Development of emissions follows essentially the same path as productivity growth until 1970. After 1970, however, there is a decoupling in the sense that emissions are decreasing, both in absolute level and as emissions per unit of value added. A rather robust conclusion is that there is no evident relationship between environmental regulations and productivity growth. One explanation is that regulations and productivity actually is unrelated. Another potential explanation is that the regulatory measure used does not capture perceived regulations in a correct way.
    Keywords: Environmental regulations; productivity; Porter hypothesis
    JEL: Q52 Q55 Q56
    Date: 2008–02–01
  8. By: Keith Blackburn; Gonzalo F. Forgues-Puccio
    Abstract: Empirical evidence shows that not all countries with high levels of corruption have su¤ered poor growth performance. Bad quality governance has clearly been much less damaging (if at all) in some economies than in others. Why this is so is a question that has largely been ignored, and the intention of this paper is to provide an answer. We develop a dynamic general equilibrium model in which growth occurs endogenously through the invention of new goods based on research and development activity. For such activity to be undertaken, ?rms must acquire complementary licenses from public officials who are able to exploit their monopoly power by demanding bribes in exchange for these (otherwise free) permits. We show that the effects of corruption depend on the extent to which bureaucrats coordinate their rent-seeking behaviour. Speci?cally, our analysis predicts that countries with organised corruption networks are likely to display lower levels of bribes, higher levels of research activity and higher rates of growth than countries with disorganised corruption arrangements..
    Date: 2007

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