The Role of Patent Rights in Mergers: Consolidation in Plant Biotechnology

Few empirical studies have addressed the impact of the patent system on industry structure. Using firm-level patent data for firms in plant biotechnology, we develop a measure of patent enforceability. Duration models show that patent statistics are useful predictors of the timing of consolidation and that patent enforceability is an important factor influencing the likelihood of consolidation. Acquisitions in plant biotechnology may be motivated by the enforcement of patent rights when firms have overlapping technologies; some merger activity may be explained by attempts to avoid mutually blocking technology, as exemplified by the case of Roundup Ready corn.     

Enforceability of non-compete covenants,discretionary investments,and financial reporting practices: Evidence from a natural experiment

Non-compete covenants are widely used in employment contracts to promote employee stability. Using legal amendments of non-compete enforceability as a natural experiment, we find that as non-compete enforceability increases, firms display an increased likelihood of meeting short-term earnings benchmarks, lower discretionary expenditures, and declining future performance. These effects are more pronounced when CEOs have lower ability or shorter tenures, and when firms have more growth opportunities or operate in localized industries. Our results suggest that managers actively adapt investment and financial reporting practices to the changing environment that affects their contractual relations with firms.     

浅议拆封许可合同的认定

作为早期采用契约形式保护软件利益的延续,拆封许可合同今天广泛存在并成为软件著作权人权利行使的主要途径之一。拆分许可合同本质上是软件著作权人与用户之间订立的格式化的著作权许可使用合同,其效力同时受到合同法和著作权法的双重规范。     

Legal rights,information sharing,and private credit: New cross-country evidence

Using improved measures and recent data from Doing Business, this paper reexamines the effects of legal systems and information-sharing on private credit. The results indicate that stronger legal rights, better contract enforceability and better information sharing are associated with higher private credit to GDP ratios across countries. These effects are significant even when the sample is restricted to include either developing countries only or poor countries only, but the effects of both legal rights and enforcement are stronger the richer the countries. Still, there is no evidence of substitution patterns among credit market institutions in poor countries. Overall, this paper may be viewed as enhancing the robustness as well as the generalizability of earlier evidence aimed at establishing a link between legal and information-sharing institutions on one hand, and the size of credit market on other hand.     

Contract ineffectiveness in emerging markets: An institutional theory perspective

The effectiveness of contracts is bounded by the institutional environment in which they are designed and enforced. When firms form supply chain partnerships in emerging markets, they may experience contract ineffectiveness, which is defined as a firm's perceived limits of contracts with respect to safeguarding interests and coordinating activities. Specifically, we identify two institutional factors that may give rise to contract ineffectiveness, information transparency and legal enforceability, as they determine how effectively a firm designs and enforces a contract. In addition, we reveal that contract ineffectiveness prompts a firm to seek social ties, including business ties and political ties, to overcome the institutionally induced limits of contracts. These efforts, however, are moderated by the type of predominant pressure a firm bears. While equity pressure strengthens the relationship between contract ineffectiveness and a firm's pursuit of social ties, efficiency pressure weakens this relationship, because seeking social ties imposes an extra burden of efficiency. Tested by data collected from 187 distributors in China, our study reveals the institutional causes and the consequences of contract ineffectiveness, which is a common problem encountered by firms when forming supply chain partnerships in emerging markets.     

Introducing More IFRS Principles of Disclosure – Will the Poor Disclosers Improve?

Abstract

The current paper was prepared for the International Accounting Standards Board (IASB) Research Forum 2017 and evaluates the effects of introducing more principles of disclosure as part of the IASB Disclosure Initiative. We perform a literature review of academic research on how entities have complied with disclosure requirements in the past. The review shows high levels of non-compliance and high volatility across entities, including poor disclosers being far below the average. We find no clear pattern of higher compliance for International Financial Reporting Standards (IFRS) with more reliance on disclosure principles as compared to specific requirements (i.e. IFRS 7, IFRS 8), but note the methodological problem of measuring compliance with disclosure principles. Academic research suggests that the degree of compliance depends on entities’ incentives for providing or withholding information in combination with local conditions for primary users, auditors and regulators. Based on our review, we argue that increased reliance on entities to act in ‘good faith’ when complying with disclosure requirements, in capital-market contexts where entities may be in high-incentive situations and have low costs of non-compliance, is potentially risky in terms of how well the Standards protect primary users from poor disclosers. More emphasis is needed on ensuring that the disclosure requirements are enforceable and auditable in order to secure a certain minimum level of disclosure.