International Review of Law and Economics最新文献

This study examines the effect of strict enforcement of the 2008 Labor Contract Law (LCL) on firm employment in China. Although the LCL caused a substantial increase in labor cost, there are no negative repercussions on employment. By contrast, surviving firms continue to increase employment driven by the strong labor demand of the fast-growing Chinese economy. However, compared with non-exposed firms, exposed firms suffered negative repercussions on employment after the enforcement of LCL. Exposed firms exhibited reduced wages after the LCL relative to non-exposed firms, suggesting that wage has a mediation effect on reducing the insurance expenditures of both employers and employees; they also raised productivity considerably after the LCL to absorb the incremental labor costs and survive in the market. However, there are heterogeneous effects of wage and productivity among firms of various ownerships and exporting behaviors.

We provide a quantitative macrohistory of the evolution and coevolution of three fundamental elements of English caselaw: property, contract, and procedure. Our dataset is derived from a comprehensive corpus of reports on early-modern English court cases. Leveraging existing topic-model estimates, we construct annual time series of attention to each of the three legal domains between the years 1552 and 1764 and estimate a structural VAR. Property and procedure are affected for decades by their own shocks. Procedure and property coevolve. In contrast, contract adjusts quickly to its own shocks and does not coevolve with the other two areas of caselaw. We identify the episodes and events outside the legal system that correspond to systemic shocks. Edward Coke was a shock to procedure. The commercial revolution raised attention to contract. The Glorious Revolution, interestingly, did not lead to elevated attention to property issues, but the Civil War and Interregnum did. The evolution of contract, while relatively autonomous from the internal dynamics of the legal system, was, of the three legal domains, least autonomous from society.

This paper investigates how political accountability with voting pressure disciplines rent-seeking behaviors of the government (i.e., fine revenue maximization) by incorporating a two-period retrospective voting model into a law enforcement setting. For minor/major crimes where the pure rent-seeking enforcement is too strict/weak, the democratic process that provides disciplining incentives (e.g., lower discount rates, higher political rents, and fewer forgone collected fines the government must give up in exchange for reelection) makes the rent-seeking government weaken/strengthen enforcement. However, such discipline can still be insufficient and cause inefficient consequences. Additionally, for intermediate crimes, the democratic process can lead to the government’s inefficient pandering to voters and cause welfare deterioration, even compared to the pure rent-seeking enforcement case. The result shows that different types of distortions happen from previous studies when we consider the conflict between the rent-seeking government and citizens.

This paper aims to investigate the effect of the Foreign Account Tax Compliance Act (FATCA) on the deposits held by US global banks through their branches located around the world. Using an unpublished dataset on deposits held by branches of US banks on a geographically unconsolidated basis, we find that the FATCA led to a reduction in deposits held in branches located in tax havens. We find that this effect is more severe in those jurisdictions signing a reciprocal exchange of information agreement. We also advance evidence in support of deposit shifting within the US banking system towards locations without a reciprocal intergovernmental agreement.

Between 2010 and 2012 and with bank stability as the ultimate target, five European countries implemented a tax levy on banks’ liabilities thereby decreasing the cost of equity relative to the cost of debt. Using a difference-in-differences approach we assess the impact of this tax levy on banks’ participation in the syndicated loan market. We further investigate the impact of the tax levy along bank size and capital structure. We find that banks located in countries where the tax levy was implemented supply more credit. This increase is more significant for larger lenders and banks that are more capital constrained.

The party-building reform in China aims to strengthen the party-state control of firms by formalizing the Chinese Communist Party’s (CCP) role in corporate charters. We employ the reform as an exogenous shock to examine the effect of political influence on corporate valuation in the state-dominated economy. We first develop a hazard model of firms’ responses to the reform and use the predicted hazard rate as a proxy for a firm’s ex ante political influence. We find a positive correlation between firm valuation changes and the predicted hazard rate in the events of party-building reform announcements and a consistent long-term valuation effect based on the difference-in-differences analyses. We also find that the market reacts negatively when firms elect to adopt charter provisions that allow the CCP to control their personnel decisions. Together, our results are consistent with the hypothesis that the effect of party-building reform on a firm’s valuation depends on the trade-off between the benefits from the increased state capture and the costs of state influence in firm governance and that the enhanced political control costs are mitigated for firms with stronger existing political ties. This paper contributes to the literature by introducing a novel and integrated approach to measuring political influence that goes beyond the traditional state ownership measurement and by identifying ex ante political influence as an important factor in corporate valuation.

We attempt to identify the causal effect of wages on a prosecutor’s effort by studying an exogenous salary increase in New York. We measure the performance by the likelihood that a conviction is upheld when appealed. If the efficiency wage theory explains behavior, then the exogenous wage shock should entice better performance. Alternatively, if individuals who hold office are motivated primarily by an intrinsic motivations rather than strictly financial compensation, then their performance would be unrelated to changes in their salary. We mostly find, inconsistent with efficiency wage theory, that a pay increase has a null effect on prosecutor performance.

In recent years super-PACs jumped into the political fray by making significant donations to political parties and candidates thus tilting political outcomes to suit their agendas. Super-PACs raise their money from individuals and corporations and spend it to promote their cause. Numerous commentators studied their impact on the American political landscape and highlighted its implications from a constitutionally driven perspective, anchored in the Free Speech clause of the First Amendment as it applies to corporate persons. In this Essay we analyze the phenomenon from a different vantage point, the prohibition to spend other people’s money in support of a cause which they refuse to endorse. We prove that although contributions made by private donors to super-PACs may sometimes be justified, no such redeeming grace is tenable in the case of contributions made by large public corporations. The distortion is caused by inviting corporations to identify their presumed political preferences by employing the decision rule current in corporate matters of “one share one vote” which allocates disproportionate power to the holders of large blocks of shares. Since political controversies ought to be governed by a different decision rule- “one person one vote” the distortion cannot be remedied through the intermediation of corporate players.

Does a women-friendly legal environment help women overcome discrimination in credit markets? By examining antidiscrimination laws and their implications for women-led businesses' access to credit in 124 countries, the current study differentiates an effect on discouragement (i.e., not asking for credit when they need it, demand side) and an effect on the probability that they obtain credit (supply side). Legal protections are associated with lower discouragement for women-led firms, but they do not support the attainment of more credit. We demonstrate that enforcement efforts dramatically amplify the effect of women-friendly laws on self-restrictions in terms of credit and enable women-led firms to access more credit. Women are sensitive to the legal environment in which they operate, while banks need strong incentives to change their behavior. This effect is notable with regard to rational discouragement and prevails among smaller firms and in high-income countries. These results are robust to several tests.