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on Regulation |
| By: | Francesco Nicolli (Facoltà di Economia (Faculty of Economics)); Francesco Vona (OFCE) |
| Abstract: | This paper investigates empirically the effect of market regulation and renewable energy policies on innovation activity in different renewable energy technologies. For the EU countries and the years 1980 to 2007, we built a unique dataset containing information on patent production in eight different technologies, proxies of market regulation and technology-specific renewable energy policies. Our main findings show that lowering entry barriers is a more significant driver of renewable energy innovation than privatisation and unbundling, but its effect varies across technologies, being stronger in technologies characterised by the potential entry of small, independent power producers. Additionally, the inducement effect of renewable energy policies is heterogeneous and more pronounced for wind, which is the only technology that is mature and has high technological potential. Finally, the ratification of the Kyoto protocol – determining a more stable and less uncertain policy framework - amplifies the inducement effect of both energy policy and market liberalisation. |
| Keywords: | renewable energy technology; environmental innovation; heterogenous policy effect; feedin tariff; renewable energy certificates; entry barrier |
| JEL: | Q34 Q42 Q48 Q51 Q58 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4b9o704lm99vm9u7s9e6fdpp6r&r=reg |
| By: | Rahmatallah Poudineh; Grigorios Emvalomatis; Tooraj Jamasb |
| Abstract: | Efficiency and productivity analysis is a central concept in incentive-based regulation of network utilities. However, the efficiency measures obtained from benchmarking predominantly reflect short term performance and hence, provide only a snapshot of the firm’s path towards its long run equilibrium. On the other hand, the factors affecting the short run behaviour of firms may not be adjusted instantaneously when firms undertake investment. In these instances, short run inefficiency caused by investments will be transmitted to subsequent periods. This effect, which arises from costs associated with the adjustment of capital stock or production capacity, is problematic under incentive regulation with ex-post regulatory treatment of capital expenditure. This is because it adversely affects the firms’ short term efficiency and, consequently, regulated revenue. This paper analyses the dynamic behaviour of inefficiency for a balanced panel of 128 Norwegian electricity distribution companies from 2004 to 2010. We show that, in a given period, inefficiency is a combination of period-specific effects (shocks) plus a carry-over component from previous periods due to adjustment costs. Also, we estimate these two components of inefficiency along with the rate of inefficiency transmission between periods. |
| Keywords: | Dynamic efficiency, innovation, investment incentives, benchmarking, electricity |
| JEL: | L43 L51 L94 D21 D23 D24 |
| Date: | 2014–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1422&r=reg |
| By: | Lecuyer, Oskar; Vogt-Schilb, Adrien |
| Abstract: | This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants). It finds that optimal investment in renewable energy may start before coal power has been phased out and even before investment in gas has started, because doing so allows for smoothing investment over time and reduces adjustment costs. Gas plants may be used to reduce short-term investment in renewable power and associated costs, but must eventually be phased out to allow room for carbon-free power. One risk for myopic agents comparing gas and renewable investment is thus to overestimate the lifetime of gas plants -- e.g., when computing the levelized cost of electricity -- and be biased against renewable power. These analytical results are quantified with numerical simulations of the European Commission's 2050 energy roadmap. |
| Keywords: | Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Carbon Policy and Trading,Environment and Energy Efficiency,Energy and Environment |
| Date: | 2014–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6985&r=reg |
| By: | Christian Jaag; Martin Maegli |
| Abstract: | This paper analyzes the market regulations and USO as defined in the Swiss Postal Act and their interaction with competition law. Specifically, the paper covers the following aspects of the regulatory framework for the postal sector in Switzerland: First, the scope of the USO, consisting of provisions on the range of products to be offered and their prices, on the density and accessibility of the postal outlet network as well as the coverage and frequency of delivery. Second, it analyzes the financing of the USO, consisting of provisions on the calculation of the net cost, a residual monopoly for letters up to 50 grams and a regulatory cost allocation mechanism to ensure consistency of price regulation and the financing of the USO. Third, it presents the relevant regulatory authorities, consisting of the allocation of competences and the interfaces between the regulators (PostCom, OFCOM, ComCo, Price Supervisor). |
| Keywords: | Switzerland, Postal Regulation, Universal Service Obligation |
| JEL: | L43 L51 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:chc:wpaper:0048&r=reg |
| By: | Jorge E. Galán; Michael G. Pollitt |
| Abstract: | The electricity reform in Colombia has exhibited gains in terms of reliability but its effects on firms efficiency and service quality have not been clear. Previous studies evaluating the performance of distribution companies after the reform have not found evidence of improvements, although large differences in efficiency have been found among firms. This suggests high inefficiency persistence and heterogeneity in the Colombian distribution sector. In this paper, we propose an extension of dynamic stochastic frontier models that accounts for unobserved heterogeneity in the inefficiency persistence and in the technology. The model incorporates total expenses, service quality and energy losses in an efficiency analysis of Colombian distributors over fifteen years after the reform. We identify the presence of high inefficiency persistence in the sector, and important differences between firms. In particular, rural companies and firms with small customers present low persistence and evidence the largest gains in efficiency during the period. However, increases in efficiency are only manifested during the last five years when the main improvements in service quality and energy losses are presented. Overall, inefficiency persistence, customer density and consumption density are found to be important criteria to be considered for regulatory purposes. |
| Keywords: | Bayesian inference, electricity distribution, dynamic effects, heterogeneity, stochastic frontier models |
| JEL: | C11 C23 C51 D24 L94 |
| Date: | 2014–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1423&r=reg |
| By: | Patrick van Zwanenberg (Centro de Investigaciones para la Transformación (CENIT), Argentina); Erik Millstone (SPRU, University of Sussex, UK) |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2014-15&r=reg |
| By: | Lohse, Tim (Berlin School of Economics and Law, Max Planck Institute for Tax Law and Public Finance); Thomann, Christian (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | There exists a considerable debate in the literature investigating how stock market upswings or downswings impact financial market regulation. The present paper contributes to this literature and investigates whether financial market regulation follows a regulative cycle: does regulation, and consequently investor protection, increase as a result of a stock market downturn (as argued by, e.g., Zingales (2009)) or – contrary to the regulative cycle hypothesis – as a result of an upswing (as claimed by Povel (2007), or Hertzberg (2003)) Following Jackson and Roe (2009), we use funding data on the world’s most important financial market regulator, the U.S. Securities and Exchange Commission (SEC), as a proxy for the politically desired degree of regulation. We apply time series analysis. Using more than 60 years of data, we show that the SEC’s funding follows a regulative cycle: A weak stock market results in increased resources for the SEC. A strong stock market results in reduced resources. Our findings underline the downside of regulation as the regulative cycle amplifies the technical procyclicality inherent in regulation. |
| Keywords: | Financial Regulation; Procyclicality; Securities and Ex-change Commission; Stock Market |
| JEL: | C32 G18 G28 |
| Date: | 2014–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0371&r=reg |
| By: | Borut Strazisar (ERUDIO, European institute for entrepreneurial research, Ljubljana) |
| Abstract: | Market in financial instruments directive tried to suppress the rigidity of EU legislative procedure with introduction of principle based legislation. At that time this approach was seen as something new and fresh. Big financial crisis in 2008 showed that adopted solution didn’t fulfil the expectations. Submission is divided in three parts. First part deals with background and logic of self-regulation. Self-regulation is placed in the system of regulation, deregulation and reregulation. It analyses why self-regulation becomes so popular. This part presents different types of self-regulation with their typical features. Second part deals with the problems and weaknesses. Self-regulation posts numerous questions. Fundamental question is whether self-regulation could be the effective change for state legislation. Second problem of self-regulation is the jurisdiction in re. Third problem is the openness of self-regulatory rules – they could be interpreted in different ways in similar situations. The end result is unequal legal treatment. Other end result is even scarier – interpretation is used to protect certain parties and so provoking the harm to society (like in case of Enron or latest financial crisis). And least but not last, self-regulation could end in overregulation, which side effect is that no one knows the law. We could speak about legal jungle. Third part of submission deal with prepositions, which should be fulfilled for working self-regulation. Basic question is, if self-regulation is appropriate for all the societies and all fields of economic activity. To answer that question, we must look at different points. So there is a question which harm could be done, if something goes wrong. Then there is a question if providers and consumers are developed enough not to abuse their rights and obligations. This part tries to establish certain mechanisms to make self-regulation workable and to avoid negative side-effects of self-regulation. |
| Keywords: | financial instruments, financial markets, regulation |
| JEL: | G28 K22 K23 K42 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2013:204&r=reg |
| By: | World Bank |
| Keywords: | Water Supply and Sanitation - Town Water Supply and Sanitation Water Resources - Water and Industry Water Supply and Sanitation - Urban Water Supply and Sanitation Water Supply and Sanitation - Water Supply and Sanitation Governance and Institutions Infrastructure Economics and Finance - Infrastructure Regulation |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:18946&r=reg |
| By: | Rosengren, Eric S. (Federal Reserve Bank of Boston) |
| Abstract: | Eric called the increased attention on sufficient high-quality capital for banking organizations extremely important, and a "lesson learned and applied" from the financial crisis. |
| Date: | 2013–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbsp:78&r=reg |
| By: | World Bank |
| Keywords: | Infrastructure Economics and Finance-Infrastructure Regulation Infrastructure Economics and Finance-Private Participation in Infrastructure International Economics and Trade-Trade and Transport Transport |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:16764&r=reg |
| By: | Christien Enzing (Technopolis group); Matthias Ploeg (Technopolis group); Maria Barbosa (Food and Biobased Research - Wageningen UR); Lolke Sijtsma (Food and Biobased Research - Wageningen UR) |
| Abstract: | The European Union has adopted recently an ambitious strategy for developing the Bioeconomy in Europe. In this context, algae represent an emerging biological resource of great importance for its potential applications in different fields, including food and feed. Algae have been already used as food, feed and fertilizers for centuries, and nowadays approximately 200 species of algae and micro-algae are used worldwide in different sectors, like energy, cosmetics and pharmaceuticals. This report provides an analysis of the technological and market developments in the field of microalgae-based food and feed products. The analysis is based on literature search, interviews to experts and Delphi survey to stakeholders. It provides important insights on four issues concerning microalgae-based products: production systems; current markets, products and future developments; R&D and prospects for micro-algae biotechnology and genetic engineering; safety and regulatory aspects of food and feed applications in Europe and the USA. Main results show that the global market for microalgae-based food and feed supplements/nutraceuticals is well developed and with a great potential for growth. Europe has the potential to become market leader in micro-algae based products for the food and feed markets in the next decade, in particular thanks to scientific and technological developments going on in this field. However, experts highlight two major factors limiting the European potential: the insufficient European domestic demand for microalgae products and the difficulties in achieving commercial authorization of algae-derived products in the EU markets due to the complexity of the regulation of novel foods in Europe. |
| Keywords: | Algae, Innovation, Biotechnology, Bioeconomy, Socio-Economic impacts, Genetically Modified Organisms (GMOs), new technologies, competitiveness |
| JEL: | O13 O31 O32 Q16 Q18 Q22 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc85709&r=reg |
| By: | Kungl, Gregor |
| Abstract: | This paper examines the actions and strategies of Germany´s leading energy companies - E.ON, RWE, EnBW and Vattenfall - in the light of a changing regulatory framework and other circumstances. The liberalization of the German electricity market, measures to promote renewable energies, market developments as well as exogenous shocks such as the Fukushima nuclear disaster and the fiscal crisis all had far-reaching consequences for these companies. A comparative analysis of these companies from 1998 to 2013 shows their development from thriving growth at the start of liberalization up to the current state of crisis. Conducted with a focus on the context of the Energiewende - Germany´s commitment to shift towards sustainable energy production - this article contributes to the current debate on the sustainable transformation of energy supply. The theory of strategic action fields by Fligstein and McAdam serves as a theoretical framework. -- Dieser Beitrag untersucht die Strategien der etablierten deutschen Stromkonzerne E.ON, RWE, EnBW und Vattenfall vor dem Hintergrund sich verändernder Rahmenbedingungen. Regulatorische Eingriffe wie etwa die Liberalisierung des deutschen Elektrizitätsmarktes oder Maßnahmen zur Förderung erneuerbarer Energien, Marktentwicklungen sowie exogene Schocks in Form der Nuklearkatastrophe von Fukushima und der Finanzkrise hatten weitreichende Folgen für die Stromkonzerne. Um die Entwicklung der Unternehmen - von einem florierenden Wachstum zu Beginn der Liberalisierung bis hin zur aktuellen Krise - verständlich zu machen, werden die Aktivitäten der Unternehmen in der Zeit von 1998 bis 2013 einer vergleichenden Analyse unterzogen. Den theoretischen Rahmen hierfür bildet die Theorie strategischer Handlungsfelder von Fligstein und McAdam. Ein analytischer Schwerpunkt liegt auf den Entwicklungen des deutschen Strommarktes im Zuge der Energiewende. Damit leistet der Artikel einen Beitrag zur aktuellen Diskussion über den nachhaltigen Umbau der Energieversorgung. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:stusoi:201403&r=reg |
| By: | Bassett, William F. (Board of Governors of the Federal Reserve System (U.S.)); Marsh, Blake (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | In the mid-2000s, federal bank regulatory agencies became alarmed by steadily increasing concentrations of commercial real estate (CRE) loans at many banks, particularly loans used to finance construction and land development (CLD). In January 2006, they issued guidance that required banks with specific high concentrations in those asset classes to tighten managerial controls. This paper shows that banks with concentrations in excess of the thresholds set in the guidance subsequently experienced slower growth in their CRE and CLD portfolios than can be explained by changes in the health of their balance sheets and economic conditions. Moreover, banks that were above the CRE thresholds also tended to have slower growth in C&I loans but faster growth in loans to households after the guidance was issued. The results highlight the potential for this type of macroprudential regulation to have a significant and broad influence on bank behavior. |
| Keywords: | Credit channel; government regulation; bank lending; real estate |
| JEL: | E44 G21 G28 |
| Date: | 2014–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-49&r=reg |
| By: | Dawa Sherpa (Centre for Economic Studies, Jawaharlal Nehru University, New Delhi, India) |
| Abstract: | This paper seeks to critically evaluate the nature and motivation for the regulatory frame sought in the Basel III norms and its consequences on the credit needs of developing countries. After the failure of previous two Basel accords (I and II), to act as the effective prudential regulation of large financial institutions operating on global scale, the new Basel III accord is hailed as the new regulatory rule which has successfully taken into consideration of all the lacunas of earlier accord. But structurally all Basel accords are market mediated regulation, which tries to contain systemic crisis of financial institution by imposing better liquidity and capital requirements on financial institutions. It was unable to deal with strong elements of regulatory capture, which virtually makes it ineffective. All Basel accords at best tries to stop bank insolvency issues during crisis period but it does not prevent the crisis from occurring altogether (like Glass Steagall act, at 1933 in US). Not only it is micro prudential in nature, it also ignores endogenous evolution of risk of underlying assets of financial institutions. Also non-binding character and ‘one size fit for all’ approach of the recommendation makes it very hard to implement. And for developing nations new Basel III has the potential to make flow of credit more volatile and pro-cyclical and additionally it raises the cost of financing and reduces the level of credit available for developmental purposes. It is unable to deal with the issue of regulatory arbitrage and consequent rise of shadow banking activities in developing countries which are raising serious concern of systemic risk in financial system of these countries. |
| Keywords: | Basel III, Macro Prudential Regulation, Shadow Banking, Structural Regulation |
| JEL: | G1 G2 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2013:253&r=reg |
| By: | Thomas J. Miceli (University of Connecticut); Kathleen Segerson (University of Connecticut) |
| Abstract: | This entry discusses the economics of eminent domain, which is the government’s power to take or regulate privately owned property for the common good. It discusses the origins of the power as well as its limits, particularly as embodied in the public use and just compensation requirements. It also reviews the economics literature on how eminent domain affects incentives for efficient land use. |
| Keywords: | Eminent domain, takings, regulatory takings, just compensation, public use, land use |
| JEL: | K11 K32 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2014-17&r=reg |
| By: | Yoo, Y. Emilie |
| Abstract: | The financial services industry worldwide has undergone major transformation since the late 1970s. Technological advancements in information processing and communication facilitated financial innovation and narrowed traditional distinctions in financial products and services, allowing them to become close substitutes for one another. The deregulation process in many major economies prior to the recent financial crisis blurred the traditional lines of demarcation between the distinct types of financial institutions, exposing those firms to new competitors in their traditional business areas, while the increasing globalization of financial markets fostered the provision of financial services across national borders. Against this backdrop, a trend toward consolidation across financial sectors as well as across national borders increasingly manifested itself since the 1990s. The developments in the financial markets ever more intensified competition in the financial services industry and induced financial institutions to redefine their business strategies in search of higher profitability and growth opportunities. Consolidation across distinct financial sectors, i.e. financial conglomeration, in particular became a popular business strategy in light of the potential operational synergies and diversification benefits it can offer. This trend spurred the growth of diversified financial groups, the so-called financial conglomerates, which commingle banking, securities, and insurance activities under one corporate umbrella.5 Still today, large, complex financial conglomerates are represented among major players in the financial markets worldwide, whose activities not only sway across traditional boundaries of banking, securities, and insurance sectors but also across national borders. Notwithstanding the economic benefits that conglomeration may produce as a business strategy, the emergence of financial conglomerates also exacerbated existing and created new prudential risks in the financial system. 6 The mixing of a variety of financial products and services under one corporate roof and the generally large and complex group structure of financial conglomerates expose such organizations to specific group risks such as contagion and arbitrage risk as well as systemic risk. When realized, these risks may not only cause the failure of an entire financial group but threaten the stability of the financial system as a whole, as evidenced by the events during recent financial crisis of 2007-2009... -- |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imfswp:76&r=reg |
| By: | Bouton, Laurent; Conconi, Paola; Pino, Francisco; Zanardi, Maurizio |
| Abstract: | Why are U.S. congressmen reluctant to support gun control regulations, despite the fact that most Americans are in favor of them? We argue that re-election motives can help explain why politicians often take a pro-gun stance against the interests of the majority of the electorate. We describe a model in which an incumbent politician must decide on a primary issue, which is more important to a majority of voters, and a secondary issue, which a minority cares more intensely about. We derive conditions under which the politician, when approaching re-election, will pander towards the interests of the minority on the secondary issue. To assess the evidence, we exploit the staggered structure of the U.S. Senate— in which one third of members face re-election every two years—and examine senators’ voting behavior on gun control. In line with the model’s predictions, we obtain three main results: senators are more likely to vote pro gun when they are closer to facing re-election; this behavior is driven by Democratic senators, who “flip flop” on gun control; election proximity has no impact on the voting behavior of senators who are retiring or hold safe seats. |
| Keywords: | Elections; Gun-control regulations; Pandering; Vocal minority |
| JEL: | D72 I18 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9726&r=reg |