|
on Regulation |
| By: | Bilotkach, Volodymyr; Clougherty, Joseph A.; Mueller, Juergen; Zhang, Anming |
| Abstract: | This paper examines the determinants of airport aeronautical charges by employing a unique panel dataset covering sixty-one European airports over an eighteen-year period. We are able to extend the literature on the role of airports as an essential element in transport infrastructure by offering the first analysis of the impact of different regulatory policies and privatization on airport charges in a panel data setting where fixed effects can be employed to mitigate endogeneity concerns. Our main empirical results indicate that aeronautical charges are lower at airports when single-till regulation is employed, when airports are privatized, and -- tentatively -- when ex-post price regulation is applied. Furthermore, hub airports generally set higher aeronautical charges, and it appears that price-cap regulation and the presence of nearby airports do not affect aeronautical charges. |
| Keywords: | airport charges; airports; hubs; privatization; regulation; single-till |
| JEL: | L33 L93 R40 R48 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8618&r=reg |
| By: | David F. Drake (Harvard Business School, Technology and Operations Management Unit) |
| Abstract: | Carbon regulation is intended to reduce global emissions, but there is growing concern that such regulation may simply shift production to unregulated regions, potentially increasing overall carbon emissions in the process. Carbon tariffs have emerged as a possible mechanism to address this concern by imposing carbon costs on imports at the regulated region's border. Advocates claim that such a mechanism would level the playing field whereas opponents argue that such a tariff is anti-competitive. This paper analyzes how carbon tariffs affect technology choice, regional competitiveness, and global emissions through a model of imperfect competition between "domestic" (i.e., carbon-regulated) firms and "foreign" (i.e., unregulated) firms, where domestic firms have the option to offshore production and the number of foreign entrants is endogenous. Under a carbon tariff, results indicate that foreign firms would adopt clean technology at a lower emissions price than domestic producers, with the number of foreign entrants increasing in emissions price only over intervals where offshore foreign firms hold this technology advantage. Further, domestic firms would only offshore production under a carbon tariff to adopt technology strictly cleaner than technology utilized domestically. As a consequence, under a carbon tariff, foreign market share is non-monotonic in emissions price, and global emissions conditionally decrease. Without a carbon tariff, foreign share monotonically increases in emissions price, and a shift to offshore production results in a strict increase in global emissions. |
| Keywords: | Carbon regulation; Carbon leakage; Technology choice; Imperfect competition |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:12-029&r=reg |
| By: | Christian Jaag; Helmut Dietl |
| Abstract: | This paper argues that transforming the postal business model goes hand in hand with a transformation in the definition of universal service obligation. Whilst postal operators need to fully embrace the unique competitive space created by electronic substitution, at the intersection between the physical and digital, regulatory frameworks also must be adapted towards a technology-neutral definition of universal service. |
| Keywords: | Regulation, Postal market, Substitution, Intermodal competition |
| JEL: | L50 L87 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:chc:wpaper:0031&r=reg |
| By: | Claudia Curi; Paolo Guarda; Ana Lozano-Vivas; Valentin Zelenyuk |
| Abstract: | This paper investigates the effects of home country banking regulations on the performance of foreign banks in Luxembourg?s financial center. We control for the main regulatory indicators, such as capital requirements, private monitoring, official disciplinary power and restrictions on bank activities, accounting for the regulatory regime applied to foreign banks. We also control for the level of GDP in the home country and its position in the business cycle. The two-stage bootstrap method proposed by Simar and Wilson (2007) is applied to bank panel data covering 1999-2009. The analysis carries policy implications for bank regulators in both home and host countries and provides insight into the choice between establishing a branch or a subsidiary, when developing cross-border activities through financial centers. |
| Keywords: | Foreign bank efficiency, Home-host country characteristics, Bank regulation, Data Envelopment Analysis, Bootstrap |
| JEL: | G15 G21 G28 C14 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp068&r=reg |
| By: | Tomáš Otáhal (Department of Economics, FBE MENDELU in Brno); Václav Rybáček (University of Economics Prague) |
| Abstract: | Can tight and centralized financial regulation prevent financial crises? Governments usually respond to financial crises with tightening and centralizing financial regulation. In this paper, we explore the historical parallels between the governmental responses to the financial crises at the end of the 19th and the beginning of the 20th century in the USA and the recent response of the European Union. Our rent- seeking model with endogenous rent derived from the historical narrative predicts that tight and centralized financial regulation might increase the risk of inflationary monetary policy. To illustrate our findings on an empirical example, we calculated the Czech government bond seignorage that represents the rent extracted through inflationary monetary policy. |
| Keywords: | Bureaucracy, corruption, economic efficiency, Chicago Public Choice, Virginia Public Choice, rent-seeking, rule of law |
| JEL: | G18 G28 N11 N21 N41 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:14_2011&r=reg |
| By: | Liam Wren-Lewis |
| Abstract: | This paper investigates the interaction between corruption and infrastructure policy reforms. I construct a simple model to illustrate how both an incerase in regulatory autonomy and privatisation may influence the effect of corruption. This interaction is then analysed empirically using a panel of 153 electricity distribution firms across 18 countries in Latin America and the Caribbean between 1995 and 2007. I find evidence that greater corruption is associated with lower firm efficiency, but that this association is reduced when an independent regulatory agency is present. These results survive a range of robustness checks including instrumenting for regulatory governance and corruption. I also find slightly less robust evidence that private ownership further mitigates the association between corruption and efficiency. |
| Keywords: | Regulation, Corruption, Infrastructure |
| JEL: | D73 L33 L51 L94 L98 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:576&r=reg |
| By: | Giovanni Immordino; Michele Polo |
| Abstract: | A dominant firm undertakes a given business practice that is regulated by an antitrust enforcer by the choice of a legal standard, fines and accuracy. In traditional industries the incumbent and technology are already established, while in innovative industries the successful innovator becomes dominant. In the former case, marginal deterrence is key to enforcement, and discriminating rules are always dominant when fines are unbounded, or they are replaced with per-se illegality when fines are capped and the practice is likely to be socially harmful. In innovative industries marginal deterrence interacts with average deterrence (the impact of enforcement on innovation effort). Then, per-se legality is preferred when the practice is likely to be welfare beneficial, moving to a discriminating rule when social harm becomes more likely. When fines are capped, per se-legality, discriminating rule and per-se illegality are alternatively chosen when the practice is more and more likely to be socially harmful. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:420&r=reg |
| By: | Isabel Ortiz; Jingqing Chai; Matthew Cummins (Division of Policy and Practice,UNICEF) |
| Abstract: | This working paper: (i) briefly reviews possible causes of the food price spike that began in mid-2010; (ii) examines recent local food price movements in 58 developing countries during 2010; (iii) discusses the adverse impacts of food price increases on households; (iv) presents a rapid desk review of international and domestic policy responses in 98 developing countries under a three-pillar policy framework—supporting consumption, boosting production and regulating/managing food markets; and (v) calls for urgent and coordinated policy actions by national governments and the international community. |
| Keywords: | food price, commodity price,food inflation, food crisis, supply shock, exchange rate, export ban, commodity futures, hunger, malnutrition, poverty, inequality, import bills, subsidies, tariffs,food market regulation, crisis recovery, fiscal consolidation |
| JEL: | H I38 Q18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uce:wpaper:1101&r=reg |
| By: | Delpeuch, Claire |
| Abstract: | After years of diplomatic efforts and legal procedures to obtain the elimination of rich countries'cotton subsidies, policy prospects for African cotton producers remain bleak. However, the world price for cotton has doubled in a year and has hit an all-time high. This paper examines these developments and investigates their potential consequences for African smallholder farmers. It emphasizes the importance of price transmission to domestic markets; assesses the impact of the reforms undertaken in Sub-Saharan African cotton sectors on producers'supply responsiveness; and outlines what remains to be done to ensure that farmers can benefit from a favorable global environment. The paper concludes that improving the functioning of domestic markets remains the priority in the short run. The current high price season will reveal the costs and benefits of different types of sector regulation systems and the capacity of policy-makers and sector stakeholders to deliver on promises. It also offers a last-minute opportunity to rich countries to keep their word in the context of the Doha Development Round. |
| Keywords: | Markets and Market Access,Economic Theory&Research,Environmental Economics&Policies,Emerging Markets,Access to Markets |
| Date: | 2011–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5847&r=reg |
| By: | Miles, David (Monetary Policy Committee Unit, Bank of England); Yang, Jing (Monetary Policy Committee Unit, Bank of England); Marcheggiano, Gilberto (Monetary Policy Committee Unit, Bank of England) |
| Abstract: | This paper reports estimates of the long-run costs and benefits of banks funding more of their assets with loss-absorbing capital, or equity. Measuring those costs requires careful consideration of a wide range of issues about how shifts in funding affect required rates of return and on how costs are influenced by the tax system; it also rqeuires a clear distinction to be drawn between costs to individual institutions (private costs) and overall economic (or social) costs. Without a calculation of the benefits from having banks use more equity no estimate of costs - however accurate - can tell us what the optimal level of bank capital is. We use empirical evidence on UK banks to assess costs; we use data from shocks to incomes from a wide range of countries over a long period to assess risks to banks and how equity funding (or capital) protects against those risks. We find that the amount of equity capital that is likely to be desirable for banks to use is very much larger than banks have used in recent year and also higher than targets agreed under the Basel III framework. |
| Keywords: | Banks; capital regulation; capital structure; cost of equity; leverage; Modigliani-Miller |
| JEL: | G21 G28 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:mpc:wpaper:0031&r=reg |
| By: | Raouf Boucekkine (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Natali Hritonenko (Prairie View - A&M University); Yuri Yatsenko (Houston Baptist University - Houston Baptist University) |
| Abstract: | We consider an optimal growth model of an economy facing an exogenous pollution quota. In the absence of an international market of pollution permits, the economy has three instruments to reach sustainable growth: R&D to develop cleaner technologies, investment in new clean capital goods, and scrapping of the old dirty capital. The R&D technology depends negatively on a complexity component and positively on investment in this sector at constant elasticity. First, we characterize possible balanced growth paths for different parameterizations of the R&D technology. It is shown that countries with an under-performing R&D sector would need an increasing pollution quota over time to ensure balanced growth while countries with a highly efficient R&D sector would supply part of their assigned pollution permits in an international market without harming their long-term growth. Second, we study transitional dynamics to balanced growth. We prove that regardless of how large the regulation quota is, the transition dynamics leads to the balanced growth with binding quota in a finite time. In particular, we discover two optimal transition regimes: an intensive growth (sustained investment in new capital and R&D with scrapping the oldest capital goods), and an extensive growth (sustained investment in new capital and R&D without scrapping the oldest capital). |
| Keywords: | Sustainable growth; vintage capital; endogenous growth; R&D; pollution quotas |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00632887&r=reg |
| By: | Ji Yan |
| Abstract: | A key target of the U.S. health policies is to reduce costly adverse birth outcomes to which prenatal smoking is one of the most signicant contributors. This paper represents the rst attempt to examine whether implementing the minimum cigarette purchase age of 21 can curb smoking among young mothers and thus improve their newborn's health. The research question is crucial because young mothers are heavily engaged in smoking and have poorer birth outcomes, and because the smoking prevalence and intensity among Pennsylvania young childbearing women have also exceeded the national average. I nd robust evidence that the 21 smoking age leads to a 15 percent decline in the daily cigarettes smoked, a 19 percent decrease in the probability of having a low birth weight baby among all the mothers, and improvements on other birth outcomes such as longer gestation and higher APGAR scores. Such results contribute to the growing literature on the important role of a healthy fetal en- vironment in the newborn well-beings. The uncovered large intergenerational benets due to this regulation also shed new light on the current political debate in many states on whether shifting the legal smoking age up to 21. Key Words: Prenatal Smoking, Infant Health, Minimum Cigarette Purchase Age |
| JEL: | I12 I18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:11-17&r=reg |
| By: | Claudia Kettner (WIFO); Daniela Kletzan-Slamanig (WIFO); Angela Köppl (WIFO) |
| Abstract: | The EU Emission Trading Scheme (EU ETS) that covers emitters from industry and the energy sector representing 40 percent of the EU's total greenhouse gas emissions is the biggest implementation worldwide of a cap-and-trade scheme. The EU ETS has been the core instrument of European climate policy since its start in 2005. Based on a database comprising more than 10,000 installations in 26 EU countries, this paper provides a thorough analysis of the performance of the EU ETS in the period 2005 to 2010. In the first part, we analyse allocation patterns – i.e., the stringency of allocation caps and distribution issues – on EU country and sector level comparing the results of the EU ETS pilot phase and the first three years of the Kyoto phase. In the second part of the paper, we assess trading flows of European Allowance Units (EUAs) between EU countries comparing the results for the first and second trading period. Furthermore, we analyse the use of credits from flexible mechanisms – Certified Emission Reductions (CERs) from CDM projects and Emission Reduction Units (ERUs) from JI projects – that installations may surrender since the beginning of the second trading period on country level. |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:402&r=reg |
| By: | Bart Minten; Anneleen Vandeplas; Johan F.M.Swinnen |
| Abstract: | There is a vigorous debate on the liberalization of heavily regulated agricultural markets in India. A crucial institutional characteristic is the role of state regulated brokers in wholesale markets. Relying on data from a unique survey in Uttarakhand, a state in North-India, we find that regulations on margins are ineffective as most brokers charge rates that significantly exceed the regulated ones. We also find that a majority of farmers self-select into long-term relationships with brokers. These relationships allow some of the farmers to interlink credit and insurance markets to the agricultural output market. This interlinkage does however not appear to be an instrument for farmer exploitation (as it does not lead to worse inputs, high interest rates, or lower implicit output prices), but is seemingly an extra service by brokers as to establish farmer loyalty to him and thus to ensure future supplies. |
| Keywords: | India, agricultural marketing, brokers, interlinkages |
| JEL: | Q12 Q13 L15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:28811&r=reg |
| By: | Matthieu MONTALBAN (GREThA, CNRS, UMR 5113); Sigfrido RAMIREZ-PEREZ (Università Bocconi); Andy SMITH (Centre Emile Durkheim - IEP-Bordeaux) |
| Abstract: | European Union competition policy is often described as neoliberal, without this leading to more investigation. This paper highlights how the European Competition policy doctrine has been shaped, how the ordoliberal movement and the Chicago school ideas have been implemented and supported by the political work of some key actors. We show that, contrary to what is sometimes said in literature, ordoliberal actors were neither hegemonic nor leaders between Rome Treaty and the eighties, even if some neoliberal principles were introduced in antitrust law. These laws are much more a compromise between French and German representatives, and between neo-mercantilists and ordoliberals. However, things have dramatically changed since the eighties, when both (1) new political work from members of the Commission introduced in the European competition policy elements of Chicago School doctrine to complete the European market and (2) some decisions from the ECJ clarified the doctrine of EU Competition law. Nowadays, European competition policy is a mix between an ordoliberal spirit and some Chicago School doctrinal elements. |
| Keywords: | competition, policy, European Union, neoliberalism, ordoliberalism, political work |
| JEL: | L4 N4 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-33&r=reg |