Patent Enforcement, Innovation and Welfare

This paper analyzes how the Southern patent enforcement affects the Northern firm's choice of licensing, subsidiary production or exports for serving the Southern market, and the innovation rate in the North and ultimately the welfare in the South. We show that for imperfect patent enforcement, licensing contract leads to more innovation in the North relative to subsidiary or exports. When both subsidiary and exports are very costly options, no patent enforcement in the South is best for the South. However, when either subsidiary operation or exports can be organized cheaply, the Southern government chooses some positive degree of patent enforcement. We also establish that strengthening of patent enforcement in the South may lead to more licensing and less subsidiary operations or exports.     

Insecurity of property rights and social matching in the tenancy market

This paper shows that insecurity of property rights over agricultural land can have large efficiency and equity costs because of the way it affects matching in the tenancy market. A principal-agent framework is used to model the landlord's decision to rent when he takes into account the risk of losing the land to the tenant and when contract enforcement is decreasing in social distance with the tenant. These effects are quantified for the case of local land rental markets in the Dominican Republic. Results show that insecure property rights lead to matching in the tenancy market along socio-economic lines, severely limiting the size of the rental market and the choice of tenants for landlords, both with efficiency costs. Social segmentation reduces access to land for the rural poor, with high equity costs. Simulations suggest that improving tenure security would increase rental transactions by 21% and the area rented to the poor by 63%. Increased property rights security is hence beneficial not only to asset owners, but also to those with whom they might interact in the market.     

Interethnic relations,informal trading networks,and social integration: imitation,habits, and social evolution

The ethnically homogeneous middleman groups (EHMGs), which are informal trading networks, are ubiquitous in less-developed economies where the legal infrastructure for contract enforcement is not well developed. This paper develops a formal model of social interaction among members of the EHMG as well as in more general situations in a multi-ethnic or multi-cultural society consisting of identifiable ethnic or linguistic groups. Behavioral patterns are transmitted between generations and altered via imitation in social contacts. The model demonstrates how different discriminatory behavioral patterns can evolve and persist over time. One result is that the trust between such groups can increase due to a higher frequency of inter-group contacts. In concluding the paper, we speculate about how the model can be expanded to include changes in legal structures, especially contract law. This could lead to an increase in the trust between the different groups.     

Credit layering in informal financial markets

Informal lenders with access to markets or capital often find it attractive to delegate loan provision to downstream lenders who have an information or enforcement advantage in dealing with particular borrowers. In this paper we examine the conditions under which such an arrangement is preferred by two informal lenders, a landlord and a merchant, who compete in loan provision to tenant farmers differentiated by wealth. We show that credit layering is preferred only when tenants are sufficiently poor. In this case, the trader lends to tenant farmers via a contract with their landlord. Otherwise, only the trader lends. As a consequence, a pattern of borrowing emerges in which relatively wealthy tenants borrow from merchants while poor tenants borrow mainly from their landlords. Interlinkage between land and credit thus arises only for a subset of tenants and purely as a consequence of credit layering. This pattern is shown to be supported empirically.     

Italian households’ debt: the participation to the debt market and the size of the loan

This paper analyses Italian households’ participation to the debt market, separating the probability of demanding a loan from the probability of being rationed by lenders; on the supply side of the market specific attention is paid to enforcement costs of the loan contract when customers default. A new result is that the age of the household head acts essentially as a demand factor, rather than a variable influencing the lender’s choice. Both current and future households’ income increase the demand for loans and reduce credit rationing. Self-employed workers are more rationed by lenders. Credit constraints are also linked to the area where the household lives, partly because of different enforcement costs. The final part of the paper analyses the equilibrium quantity of the loan, for households who have a loan and are not constrained. The loan size is positively linked to household net wealth and income profile. An important contribution of this paper is the finding that, not only the participation to the debt market, but also the loan size is negatively affected by enforcement costs.      

Start up costs, limited enforcement, and the hidden economy

This paper examines how much of the difference in the size of the informal sector and in per capita income across countries can be accounted by regulation costs and enforcement of financial contracts. It constructs and solves numerically a general equilibrium model with credit constrained heterogenous agents, occupational choices over formal and informal businesses, financial frictions and a government sector which imposes taxes and regulations on formal firms. The benefit from formalization is better access to outside finance. The quantitative exercises suggest that: (i) regulation costs and not the level of enforcement account for differences in the size of the informal sector between United States and Mediterranean Europe; (ii) for a developing country like Peru, however, contract enforcement and regulation costs are equally important in accounting for the size of the informal sector; and (iii) regulation costs and contract enforcement do not account for most of the income differences observed among countries.     

退耕还林:私人承包与政府规制

本文在一种委托—代理框架下研究了退耕还林工程在实施过程中所面临的激励不相容问题。文章首先探讨了退耕还林私人承包的社会理性。然后 ,文章给出了一个双重任务委托—代理模型 ,解释市场冲击如何会使农户的自利性经营行为偏离社会生态目标。接着 ,文章以陕西省退耕还林现状为研究背景对退耕还林工程实施中的激励不相容问题做出了进一步的经验分析。最后 ,文章从政府规制的角度提出了若干公共政策建议 ,以期提高退耕还林工程的实施效率。     

不完备市场的多层次治理-基于比较制度实验的研究

在不完备市场中,交易并不会因为正式的产权保护和契约执行制度不存在或者不作为而停止,人们往往会自发地演化出一些替代性的市场治理结构来支撑市场交往、实现潜在的市场剩余。本文的目的在于使用比较制度实验的方法来研究各种替代性市场治理方式的特征和治理效率以及它们之间的交互作用,本研究对于发展中经济体和转型经济体中市场经济的发展和完善具有重要意义。     

Governance Structures, Insider Status, and Boundary Maintenance

If legal enforcement of contracts were omnipresent, omniscient, and costless, the identity and history of one's partners would be irrelevant, since any problems caused by unreliable partners could be remedied effectively. However, when legal enforcement is localized, imperfect, and costly, different governance structures for contracts carry implications for the sets of acceptable contracting partners. When legal enforcement for contracts is based on national law, whose reach is coterminous with a state's territory, acceptable partners tend to be defined territorially. When state enforcement of contract law is weak or nonexistent or when a contract is so vulnerable to nonperformance that it requires auxiliary support, actors must devise an alternative or supplement to state enforcement. The most relevant contracting boundaries then will be ones defining groups that can efficaciously create and maintain intertemporal, inter-issue, and inter-actor linkages. We examine just three of many possibilities: family-based, function-based, and ethnicity- or religion-based groups. These different systems of governance affect which entities are recognized as members in the club of actors, as well as how actors define their contracting boundaries and distinguish between those with whom they contract relatively freely and those with whom their contracting is more circumscribed.     

Enforcement frictions and optimal lending contracts

I consider an environment in which contract enforcement is a decision variable for the principal. I construct a model in which entrepreneurs cannot commit to repaying investors for the capital advanced, but investors can force repayment by spending resources. The principal uses enforcement to reduce the resources available to the agent after a default, thus providing incentives for the agent to stay in the relationship. She also ensures contract compliance by backloading the payments to the agent: expected utility rises over time, preventing a default. I consider an application of the framework developed in the paper to the area of firm dynamics. I show that enforcement and backloading are always used jointly. Firm size (measured by capital) grows with time and each firm converges to the efficient size. A second application is to the field of economic development. Costlier enforcement leads to the choice of sub-optimal technology; secondly, it leads to inefficient dispersion of capital across establishments.     

Payment choice in international trade: Theory and evidence from cross‐country firm‐level data

When trading across borders, firms choose between different payment contracts. Theoretically, this should allow firms to trade‐off differences in financing costs and enforcement across countries. This paper provides evidence for this hypothesis employing firm‐level data from a large number of developing countries. As predicted, international transactions are more likely paid after delivery when financing costs in the source country are high and when contract enforcement is low. We extend the theory and also show empirically that the more complex an industry is, the more important is contract enforcement and the less important are financing costs for the contract choice.     

政治关联与企业的契约实施环境

本文基于世界银行2003年和2005年的调查数据,对不同所有制企业的契约实施环境进行了比较。研究发现,民营企业的契约实施环境显著差于其他所有制类型的企业。在此基础上,我们进一步考察了政治关联对企业契约实施环境的影响。实证结果表明:(1)与掌握实权的政府官员建立政治联系能够改善民营企业的契约实施环境,而且这些官员的地位越高,其影响越显著;(2)政治关联是否能够改善企业的契约实施环境与官员的类型有关,如果官员属于"帮助企业发展"类型的,则与此类官员的政治关联能够改善企业在本省和外省的契约实施环境;(3)董事会中有政府官员以及总经理是由政府任命不利于企业契约的实施环境的改善;(4)随着法律制度的不断完善和市场化进程的推进,各类政治关联对企业契约实施环境的积极作用正在被其消极作用所抵消。因此,消除阻碍民营企业发展的各种制度和政策障碍仍然是推动民营企业发展的根本之道。     

Assortative mating in the online market for sperm donation

Previous studies on assortative mating have struggled to isolate preferences from actual constraints faced throughout the matching process, including the geographic and social propinquity that limit the availability of possible mates. Because such passive factors restrict the possibility set of potential partners, they may either restrict the chance of fulfilling mating preferences or lead to a high level of positive assortative mating. The possibility set may be further reduced by competition in the mating market. It is also unclear from couple’s data how much assortative mating is driven by partner selection to reduce anticipated child rearing problem and how much by a desire for parental assistance and altruistic preferences for offspring. Adopting the online market for sperm donation as the research setting reduces such problems: the more controlled setting ensures isolation of a male’s genetic impact on his offspring from other factors. By identifying the factors that influence the symmetry of characteristics between recipients and partners and recipients and donors chosen, we provide empirical evidence that even with limited constraints on available choice, women still exhibit homogamous donor preferences. Likewise, by exploring how potential donors’ characteristics match partner characteristics, we offer insights into what drives recipients’ desires to find donors who surpass both their own and their partners’ characteristics.     

Efficient contract enforcement

We study how the efficient choice of contract enforcement interacts with the efficient allocation of capital in a simple production economy. Contract enforcement makes trade possible but requires an aggregate investment of capital that is no longer available for production. In such an economy, more dispersion in ex-ante marginal products makes it optimal to invest more resources in enforcement. Furthermore, implementing the optimal allocation requires a specific distribution of the cost for enforcement across agents that is not monotonic and results in a redistribution of endowments. At the efficient solution, agents at the bottom of the endowment distribution benefit the most from investment in enforcement and these investments lead to a reduction in consumption and income inequality.     

Host country's strategic policies and multinational firm's choice of entry mode

This paper examines the effects of contract enforceability and market structure on a firm's choice between licensing and foreign direct investment. Clearly, the firm's choice impacts upon social welfare in the host country. Therefore, the government of the host country is likely to set contract enforceability for inducing the multinational firm (MNF) to choose a desirable mode of entry. The paper takes into account two different cases. In the first case, the host country does not have an incumbent that can compete with the MNF, and in the second case, it has one incumbent that can compete. The paper shows that the government's choice of contract enforceability is crucially dependent upon the domestic market structure and the domestic capacity to absorb the advanced technology of the MNF.     

"龙头"企业与农户的合约选择--基于风险和风险态度的解释

和现有文献基于交易成本理论解释"龙头"企业和农户之间的合约选择不同,本文把农业项目的风险分解为生产风险和市场风险,运用委托--代理理论分析了风险和风险态度对"龙头"企业和农户之间合约选择的影响.分析表明,在不存在机会主义行为或市场风险为零的情况下,"龙头"企业和不同农户之间合约的选择取决于双方对风险的态度和农业项目生产风险的大小.     

Tax enforcement,tax compliance and tax morale in transition economies: A theoretical model

The focus of this paper is the analysis of the relationship between tax enforcement, tax compliance and tax morale within countries characterised by rapid introduction of market institutions and slow evolution of political regimes, such as transition economies. The paper investigates a coordination game in which the government is ex-ante committed to tax enforcement and can observe the proportion of tax-compliant agents in the economy. In turn, two groups of agents (third-party reporting and self-reported income) are keen to evade taxes unlawfully but have limited information on how many others evade taxes; their tax morale is therefore an endogenous function of agents' perception on tax compliance. The model predicts that the lower the quality of political institutions and the weaker tax morale, the less tax compliance can be achieved. The third-party reporting group will also be bearing higher tax burden than the self-reported income group. The model entails that having political institutions of good quality is not a sufficient condition to conduce to tax enforcement or tax compliance. Due to the endogenous role of tax morale, the government could be pushed ex-post towards poor or no tax enforcement. If good political institutions are not accompanied by good information about the enforcement of tax collection, there is scope for co-existence of poor tax enforcement, low tax compliance and weak tax morale. As such, this model well describes the tax evasion behaviour observed since the outset of transition from planned to market economy.     

Marketing an upgrade to a system: compatibility choice as a price discrimination device

This paper analyzes the different ways in which an innovator can market an upgrade for a basic system when the market for this system is mature and there are two different technological platforms: the innovator’s and a rival’s. Different compatibility choices result in different product lines and yield varying price discrimination opportunities. The paper studies what are the limits to the enforcement of these opportunities and concludes by showing what is the profit maximizing product line choice when consumers are brand loyal. This choice depends on the initial market share of the innovator and on the enhancement of quality that the upgrade provides.     

契约执行效率与地区出口绩效差异-基于行业特征的经验分析

生产率差异是比较优势的重要来源,而契约执行效率又是决定行业生产率的制度因素之一.本文利用中国省区28个行业数据检验了契约执行效率对出口贸易的影响.实证结果显示,契约执行效率高的地区更倾向于专业化生产和出口契约密集度较高、物质资产专用性较强和人力资产专用性较弱的产品.在控制比较优势的其他影响因素及变量内生性之后,上述结论依然稳健.本文进一步指出,企业的一体化程度差异是解释上述结论的关键因素.     

Earnings Differentials among Ethnic Groups in Canada: A Review of the Research

Canada has a large foreign-born population with an increasingly diverse ethnic profile. The 1986 Employment Equity Act designated ''visible minorities,'' Aboriginal peoples, women, and disabled persons as facing labor market disadvantages. This review of a growing body of research on ethnic earning differentials shows that the sizeable earnings shortfall of Aboriginal peoples could be ''explained'' by their lesser endowments of work-related characteristics. The high variance in discrimination estimates among men can be traced to the treatment of immigration effects, aggregation of diverse ethnic groups, and the choice of the non-discriminatory earnings norm.