The risk-based approach under the new EU data protection regulation: a critical perspective

Abstract

The first broad reform of personal data protection legislation in the European Union entered into force in May 2018 (Regulation (EU) 2016/679, the General Data Protection Regulation). Remarkably, with this reform a risk-based approach has been introduced as the core data protection enforcement model, while data protection authorities see their regulatory role significantly weakened. The risk-based approach is to be implemented by the data controllers (i.e. the operators) via data protection impact assessments (evoking the established environmental impact assessment procedure) and notification of breaches, among other procedures. Hence the scope of both the concepts of risk and risk regulation spread beyond conventional domains, namely the environment, public health or safety, i.e. physical risks, to encompass risks to intangible values, i.e. individual rights and freedoms, presumably harder to assess and manage. Strikingly, the reform has been accompanied by a confident discourse by EU institutions, and their avowed belief in the reform’s ability to safeguard the fundamental right to data protection in the face of evolving data processing techniques, specifically, big data, the Internet of Things, and related algorithmic decision-making. However, one may wonder whether there isn’t cause for concern in view of the way the risk-based approach has been designed in the data protection legislation. In this article, the risk-based approach to data protection is analysed in the light of the reform’s underlying rationality. Comparison with the risk regulatory experience in environmental law, particularly the environmental impact assessment procedure, is drawn upon to assist us in pondering the shortcomings, as well as the opportunities of the novel risk-based approach.     

Impacts of Jumps and Stochastic Interest Rates on the Fair Costs of Guaranteed Minimum Death Benefit Contracts

The authors offer a new perspective to the field of guaranteed minimum death benefit contracts, especially for simple return premium and rising floor guarantees. A particular feature of these contracts is a guaranteed capital upon the insured's death. A complete methodology based on the generalized Fourier transform is proposed to investigate the impacts of jumps and stochastic interest rates. This paper thus extends Milevsky and Posner (2001). If jumps alone are considered, similar results are obtained, but, when stochastic interest rates are introduced, the fair costs of the guarantee feature are found to be substantially higher in this more general economy.     

How to measure competition in an economy in transition

This paper attempts to find a robust method of measuring competition when firms' operational activities are subject to frictions. The first part theoretically tests the indicative quality of two competition measures, the price‐cost margin (PCM) and the profit elasticity, in a model of monopolistic competition. The second part studies the empirical performance of the indices for a panel of Ukrainian manufacturing firms. This study offers a new approach to measuring profit elasticity that relies on structural estimation of a production function. The estimation methodology retrieves a productivity index that is adjusted to imperfect competition. The proposed method of measuring profit elasticity is found to be robust to frictions, but the PCM and traditional profit elasticity are biased, especially when the intensity of competition is low. Empirical findings show that competition exhibits a significantly positive correlation with aggregate productivity performance, while its impact on firm productivity is nonlinear.     

Productivity Gains and Spillovers from Offshoring

Offshoring is generally believed to be productivity enhancing and this belief is underpinned by economic theory. This paper estimates the impact of materials and business services offshoring on productivity in Belgium over the period 1995–2004. It contributes to the literature: (i) by examining this issue separately for manufacturing and market services industries and (ii) by investigating the possibility of forward and backward spillovers from offshoring, i.e. that productivity gains from offshoring feed through to upstream and downstream industries. Results show that materials offshoring has no effect on productivity, while business services offshoring leads to productivity gains in manufacturing. Furthermore, there is no evidence of either forward or backward spillovers from offshoring.     

The Asymmetric Information Problem in Taiwan's Cancer Insurance Market

This paper investigates the problem of asymmetric information in Taiwan’s cancer insurance market. Through the survey data, we find evidence of adverse selection existing in this market. Furthermore, we collect additional information on the individual, and find that the individual’s family cancer history contains additional valuable information. It can not only more accurately predict the probability of contracting cancer, as well as predict the willingness to purchase extended cancer insurance, but it can also help to mitigate the severity of adverse selection in the insurance market.     

Effects of service orientation on job embeddedness in hotel industry

This research aims to develop and analyze a model that depicts work engagement (WE) as a mediator of the relationship between job embeddedness and service orientation. Specifically, the model examines external environmental factors (EEFs) as moderator of the effects of service orientation and job embeddedness in the hospitality industry. All data used for this study were gathered in Iran from hotels frontline employees with a two-weeks’ time lag. These relationships mentioned above were analyzed using AMOS 22.0. It was discovered in the results that WE was indeed a partial mediator and that EEFs indeed moderated the effects of service orientation on job embeddedness with adequate empirical support. The implications of the findings for the managers, the study limitations, and future research recommendations were also discussed.     

ACQUISITION OF INFORMATION TO DIVERSIFY CONTRACTUAL RISK*

Are hedging transactions that diversify a manager’s compensation risk detrimental to incentives, or can they improve contracting efficiency? If hedging provides efficiency benefits, should the manager or the firm undertake it? In our model, both the firm and the manager can trade financial portfolios to diversify the manager’s compensation risk. Prior to the portfolio selection, the parties need to acquire information on how different financial portfolios fit their diversification purposes. We illustrate that financial portfolios correlated with firm‐specific risk improve contracting efficiency. For equal information costs, it is optimal for the firm to undertake the hedging on the manager’s behalf.     

The role of European «ro-ro» port terminals in the automotive supply chain management

The aim of this paper is concerned with the design and development of a functional framework for maritime mode integration in European automotive supply chain management when considering outbound distribution. Furthermore, it provides a readjustment of traditional concepts and terminology with findings that the role of ro-ro port terminals should be considered as decoupling points, poles and postponement platforms. Case studies examine relevant Western European ro-ro port terminals for cars and respective links to assembly/factories of vehicles localized in the hinterland and concludes that ro-ro port terminals reduce logistical friction and impedance, as well as promote space/time compression.     

The importance of atmospherics in the choice of hypermarkets and supermarkets

Are the atmospheric variables equally relevant for supermarket and hypermarket customers? As a contribution to the customers' choice of the store format, firstly this work aims to determine the perception of differences between hypermarkets and supermarkets in terms of store attributes. Second, it sheds light on the role played by atmospherics in the customers' decision process. This study uses a logit approach to model the probabilistic choice of the customers' store format using atmospheric and other marketing variables as important attributes of the grocery store. The model's estimation is based on personal interviews conducted during the shopping process in urban supermarkets and hypermarkets belonging to the same retail chain. The findings show that although the atmospheric variables are significantly important for both store formats, the customers perceive differently the importance of each retail atmospheric cue and other marketing variables, when buying in a hypermarket or in a supermarket: the choice of buying in hypermarket is explained by the significant importance given to the latent variables named pleasant atmosphere and accessibility and responsiveness; in contrast, the choice of buying in supermarkets is explained by the significant importance given to the latent variable nice decoration and empathy with the staff. The other latent variable designated by other marketing variables is only significantly important in the decision of choosing supermarkets.     

Professional Accountants’ Identity Formation: An Integrative Framework

Previous studies in Western contexts have examined the relationships between various board characteristics and CSR, yet the relationships need to be re-examined in non-Western contexts given differential theoretical premises across contexts. We specifically propose that the effects of board characteristics on CSR in Korea should be patterned distinctively from Western-based existing literature, focusing on three important board characteristics, such as a board’s independence, social ties, and diversity. Using a panel dataset from large Korean firms, we found that various relationships between board characteristics and CSR were non-linear, whereas most of the previous research on Western contexts found that the same relationships were linear. Specifically, curvilinear relationships were found between CSR and board independence (i.e., exponentially growing shape), CEO-outside director social ties (i.e., inverted U-shape), and educational diversity (i.e., U-shape). Our findings suggest that there is no universal feature of CSR-supportive board characteristics due to the unique characteristics of various institutional contexts.