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on Regulation |
| By: | Cao, Jin |
| Abstract: | This paper provides a compact framework for banking regulation analysis in the presence of uncertainty between systemic liquidity and solvency shocks. Extending the work by Cao & Illing (2009a, b), it is shown that systemic liquidity shortage arises endogenously as part of the inferior mixed strategy equilibrium. The paper compares dierent traditional regulatory policies which intend to fix the ineciencies, and argues that the co-existence of illiquidity and insolvency problems adds extra cost for banking regulation and makes some schemes that are optimal under pure illiquidity risks (such as liquidity regulation with lender of last resort policy) fail. The regulatory cost can be minimized by combining the advantages of several instruments. |
| Keywords: | liquidity risk; insolvency risk; liquidity regulation; equity requirement |
| JEL: | E5 G21 G28 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11370&r=reg |
| By: | Almeida, R.; Carneiro, P. |
| Abstract: | This paper investigates how the enforcement of labor regulation affects firm size and other firm characteristics in Brazil. We explore firm level data on employment, capital, and output, city level data on economic characteristics and new administrative data measuring enforcement of regulation at the city level. Since enforcement may be endogenous, we instrument this variable with the distance between the city where the firm is located and surrounding enforcement offices, while controlling for a rich set of city characteristics (such as past levels of informality in the city). We present suggestive evidence of the validity of this instrument. We find that stricter enforcement of labor regulation constrains firm size, and leads to higher unemployment. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucllon:http://eprints.ucl.ac.uk/16155/&r=reg |
| By: | Fabrizio Cafaggi |
| Abstract: | Within agriculture industry chains, important changes have taken place. Both vertical integration and vertical disintegration are occurring. These transformations may have effects on the adoption of private standards, but more importantly, may also effect the functions that private standards may play within the chain. I develop a coordinated approach that integrates the value supply chain perspective with regulatory theory to show that co-evolutionary patterns explain the changes in the supply chain and the increasing use of transnational private regulation. I then focus on different coordination mechanisms that are, or can be, used in food chains, and propose a wider deployment of contractual networks to improve effectiveness of food safety regulation. I distinguish between contractual networks directed at information production and transfer and contractual networks concerning risk assessment and risk management. I conclude with some policy recommendations. |
| Date: | 2010–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0232&r=reg |
| By: | Philip Maymin |
| Abstract: | A deterministic trading strategy by a representative investor on a single market asset, which generates complex and realistic returns with its first four moments similar to the empirical values of European stock indices, is used to simulate the effects of financial regulation that either pricks bubbles, props up crashes, or both. The results suggest that regulation makes the market process appear more Gaussian and less complex, with the difference more pronounced for more frequent intervention, though particular periods can be worse than the non-regulated version, and that pricking bubbles and propping up crashes are not symmetrical. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1002.2281&r=reg |
| By: | Alesina, Alberto (Harvard University); Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris); Giuliano, Paola (University of California, Los Angeles) |
| Abstract: | Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots. |
| Keywords: | family values, labor regulation |
| JEL: | E0 P16 Z10 Z13 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4747&r=reg |
| By: | Colin Scott |
| Abstract: | The late twentieth century witnessed significant shifts in the institutions and processes of governance in most members states of the OECD, as direct provision (sometimes characterised as welfare state governance) was, to some degree, displaced by the rise of the regulatory state. Changes in the nature of state intervention have been accompanied also by fundamental challenges to traditional conceptions of the centrality of the nation state as regards its dominance of key resources (notably taxation and capacities for coercion) and for the maintenance of the rule of law and democracy, as transnational and non-state power have assumed greater significance. In this paper I assess both narrow and broad versions of the challenge presented to the values of constitutionalism by regulatory governance. The narrow constitutionalist critique locates the problem of regulatory governance with the delegation of governmental power to regulatory agencies. A broader constitutionalist critique looks beyond delegation to other organs of the state, and notes that the de-centring of regulatory governance has increasingly implicated both non-state and supranational governmental bodies in regulatory tasks through implicit and explicit delegation and through the assumption of regulatory powers with little or no state involvement. I suggest that one response to the broad critique is to institutionalise broader modes of control and accountability which are best able to match the governance powers which are targeted. |
| Keywords: | regulation; governance; rule of law |
| Date: | 2010–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0229&r=reg |
| By: | Fiona Stewart |
| Abstract: | Drawing on the experience of the pensions and other financial sectors, this paper examines what sort of risk-management framework pension funds should have in place. Such frameworks are broken down into four main categories: management oversight and culture; strategy and risk assessment; control systems; and information and reporting. Ways in which supervisory authorities can check that such systems are operating are also considered, with a check list provided to assist pension supervisory authorities with their oversight of this important area.<P>Cadre pour la gestion des risques des fonds de pension : réglementation et surveillance<BR>A partir de l’expérience du secteur des retraites et des autres activités financières, ce document examine le type de cadre de gestion des risques dont devraient être dotés les fonds de pension. Un tel cadre devrait reposer sur quatre grands piliers : surveillance de la gestion et culture de gestion ; stratégie et évaluation des risques ; systèmes de contrôle ; information et reporting. Ce document traite également des modalités de surveillance de ces systèmes par les instances de supervision et il contient une liste de référence à l’intention des autorités compétentes à l’égard des organismes de retraite. |
| Keywords: | pensions, risk-management, risk assessment, internal controls, retraites, gestion des risques, évaluation des risques, contrôles internes |
| JEL: | G23 G32 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaab:40-en&r=reg |
| By: | Arvind Ashta (Centre Emile Bernheim, CERMi, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and CEREN, Burgundy School of Business (Groupe ESC Dijon-Bourgogne), France); Sophie Raimbault (CEREN, Burgundy School of Business (Groupe ESC Dijon-Bourgogne), France) |
| Abstract: | France has a rather low rate of enterprise creation. Institutional analysis helps to explain why this is so. Nevertheless, in the last few years since 2003, France has been modernizing its legal framework to stimulate enterprise creation and this has achieved some success. A new regime of Auto-entrepreneur has recently been introduced in early 2009 as a new start up mechanism, creating a lot of buzz. This paper presents the new French regime and its accountancy and tax inputs, explaining the economic motivations of the new institution and its limitations. The paper presents results of a questionnaire administered to CEO's of small business enterprises on their perceptions of this regime. The research indicates that the entrepreneurship law is perceived to be risky for tax and social security revenues, lack of entrepreneurial capabilities, lack of social security net for failed entrepreneurs, and increased competition for small enterprises from their own employees. Future directions for research are indicated in entrepreneurship and microfinance, business regulation and globalization. |
| Keywords: | Entrepreneurship, microenterprise, microcredit, French law, socialism, capitalism, regulatory analysis. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-058&r=reg |
| By: | Sebnem Kalemli-Ozcan (University of Houston and NBER); Elias Papaioannou; José Luis Peydró |
| Abstract: | We investigate the effect of financial integration on the degree of international business cycle synchronization. For identfication, we use a confidential database on banks' bilateral exposure over the past three decades and employ a novel bilateral country-pair panel instrumental vari- ables approach. First, we show that conditional on global shocks and country-pair fixed factors countries that become more financially integrated over time have less synchronized growth pat- terns, in line with the standard theories of output fluctuations. Second, to isolate the one-way impact of financial integration on output co-movement and account for measurement error in the financial integration measure, we exploit variation in the transposition dates of the European Union-wide legislative acts (the "Directives") from the Financial Services Action Plan (FSAP). These laws are designed to harmonize regulation of financial markets in the European Union. We find that increases in financial integration stemming from regulatory-legislative harmoniza- tion policies in capital markets are followed by more divergent output cycles, even when we condition on monetary unification. Our results contrast with those of the previous empirical studies. We reconcile the different results by showing that the earlier estimates suffer from the standard identification problems. |
| Keywords: | Banking Integration, Co-movement, Fluctuations, Financial Legislation |
| JEL: | E32 F15 F36 G21 O16 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1005&r=reg |
| By: | Robert M. Feinberg; Mieke Meurs; Kara M. Reynolds |
| Abstract: | While others have examined the implementation and/or the stringency of enforcement of antitrust laws in post-socialist economies, this paper is the first study that attempts to explain the determinants of antitrust enforcement activity across post-socialist countries using economic and political variables. Using a panel of ten European post-socialist countries over periods ranging from 4 to 11 years, we find a number of significant determinants of enforcement in these countries. For example, larger economies engage in more antitrust enforcement, and countries have tended to increase their enforcement efforts over time. Our results also suggest that countries characterized by more unionization and less corruption tend to engage in greater antitrust enforcement of all types. Countries more successful in privatizing have filed fewer cases, while more affluent or developed countries investigate fewer cases of all types, consistent with an income-shifting motivation for antitrust. |
| Keywords: | Antitrust Enforcement, Central and Eastern Europe, Competition Policy JEL classification: L4, P3 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2010-05&r=reg |