Effects of securities deregulation in underwriting: An Analysis of SEC Rule 415

In this paper we present evidence on the effects of Rule 415, the SEC Rule that relaxed the SEC's long-standing opposition to delayed offerings. Shelf registration allows securities to be offered on a continuous or delayed basis in certain circumstances. We provide evidence on one aspect of the controversy surrounding Rule 415's adoption: the effect of shelf registration on the distribution of underwriting revenues among broker/dealers. We find on average all broker/dealers experienced an increase in underwriting revenues following the adoption of shelf registration due to an increase in total business financing. However, we find that the largest underwriters experienced an increase in underwriting revenues relative to total business financing. The relationship for smaller broker/dealers between underwriting revenues and total business financing did not change significantly after the adoption of shelf registration. Thus, shelf registration appears not do have harmed small broker/dealers.     

A market without the 'right' property rights

While Vietnam's reforms provided some of the weakest legal private property rights amongst the transitions countries, cities like Ho Chi Minh City have booming domestic real estate markets. Interestingly, while most properties in 2001 did not have legal title, those on the market did advertise a variety of property rights claims. Employing a hedonic price model to analyse the pattern of prices at which sellers offer properties in Ho Chi Minh City, this study examines how this market values property rights. The findings show that multiple forms of property rights, enforced by highly decentralized state institutions, are operational in this market. Furthermore, legal title itself is not the most valuable form of property right. These findings suggest that the value of property rights emanates from where it is enforced within the particular institutional context of a market.     

Vertically Linked Industries,Product Quality and Minimum Quality Standards

This paper extends the seminal model of vertical product differentiation by Ronnen (1991) to a two‐tier supply chain. While Ronnen considers the duopoly case, we add a vertical structure such that each downstream firm procures an input from a monopolistic upstream supplier. While simultaneous up‐ and downstream regulation in the form of a minimum quality standard restores Ronnen's findings, if only one firm is regulated in the vertical chain, a free‐rider effect results: all the bargaining power is given to the non‐regulated member of the chain, which uses it to free‐ride on the pressure exerted by the regulator onto the other member.     

Using export market performance to evaluate regional preferential policies in China

We evaluate the effectiveness of two types of preferential regional policy programs in China’s manufacturing sector. The primary goal of the Economic and Technological Development Zones (ETDZs) is to facilitate internationalization strategies, while Science and Technology Industrial Parks (STIPs) aim to generate technology spillovers. Various dimensions of export market performance are used as objective indicators for the upgrading of product quality and firm operations. We compare startups that locate into one of these zones with startups on the outside, while controlling for self-selection using treatment evaluation methods. The results indicate that firms locating in an ETDZ achieve much higher export values, driven by higher volumes of trade and numbers of destinations. Firms locating in a STIP perform best on quality dimensions. In particular they fetch higher export prices and have more success exporting to high-income countries.     

Who participates in tax avoidance? Evidence from Swedish microdata

This article empirically examines why not all individuals participate in tax avoidance. We use rich Swedish administrative panel data on all taxpayers, with a link between corporate and individual tax returns and document that few individuals utilize legal and observable tax avoidance opportunities. Our results show that there are several frictions in tax avoidance participation. In addition to monetary benefits from tax avoidance (incentives), the opportunity to participate in tax avoidance (access), as well as information and knowledge about these opportunities (awareness), are important factors for the individual’s tax avoidance decision. We further show that tax avoidance spreads within communities. The impact of the local network is stronger for non-commuters who live and work in the same municipality.     

Management of environmental and social risks and topics in the banking sector - An empirical investigation

This paper investigates how environmental and social (E&S) risks and topics (i. e. E&S issues that are important in terms of adaptation to a changing business environment) are integrated in the banking sector. Despite banks’ key role in steering financial flows towards sustainable development, little is currently known as to whether and how banks integrate E&S aspects into their management control systems and whether this integration translates into E&S performance. Building on prior studies in the environmental management control literature, we design a conceptual model in which we link contextual factors, a proactive strategy approach, E&S management controls, and E&S performance. Following common practice in the banking sector, we differentiate between two paths of E&S management controls: risk management (value protection) and topic management (value creation). Based on survey data for a small sample of 50 European banks, we find evidence that contextual factors, reflected in the perceived power and legitimacy of clients, voluntary standard setters and NGOs, are positively related to a proactive strategy approach. This proactive strategy translates into both topic and risk management. Yet, in the next step, only topic management is positively related to the E&S performance of a bank, but not risk management.