The international regulation of intellectual property

The International Regulation of Intellectual Property. — The WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) will usher in a markedly stronger global system of defining and protecting intellectual property rights (IPRs). This paper first discusses the concept of intellectual property and the need for its protection and regulation. It presents evidence on the wide variations in IPRs across countries and discusses how TRIPS will affect these differences. Theoretical predictions about how this stronger system will influence global trade, investment, and technology innovation and diffusion are ambiguous, but limited empirical evidence suggests a modest positive effect overall. However, the distribution of costs and benefits will vary.     

Three kinds of order effects in choice-based conjoint analysis

Question and response order effects are known to occur in survey research instruments. Choice-based conjoint analysis presents respondents with multiple sets of concepts fully specified in terms of a number of attributes. Respondents choose one full-profile concept from each of the many choice sets. Thus there are three plausible order effects with respect to choice-based conjoint analysis: choice set order, profile order within choice sets, and attribute order within profiles. Three empirical studies show that statistically significant choice set order, profile order, and attribute order effects occur. Some of these order effects are significant from a practical standpoint, but none occur in a predictable way. Analysts are advised to rotate, across respondents, profile and attribute order to offset the order biases. Directions for future research are suggested.     

Disparities in Mortgage Lending,Bank Performance,Economic Influence,and Regulatory Oversight

This study investigates factors affecting changes in the disparity of home mortgage denial rates between white and minority loan applicants in the U.S. during the period 1991–1997. We develop a two-stage least-squares regression model that incorporates applicant-level characteristics, neighborhood characteristics, regional economic data, and bank-specific data as explanatory variables. Some have argued that mortgage lenders were under increasing pressure from industry regulators to extend additional credit to minorities and low-income groups during the period under study. The model includes each institution's periodic CRA rating as a proxy for regulatory influence. An alternative explanation is that market forces, such as improvements in economic conditions and in bank financial condition and performance, affected default loss estimates and credit standards in a way that disproportionally benefited minority and low-income applicants. The empirical findings are consistent with the latter hypothesis. We conclude that policy makers should consider the impact of market factors when assessing the allocation of mortgage credit in a particular demographic market. The findings also underscore the importance of controlling for lender assessments of credit risk when evaluating compliance with CRA and fair lending statutes.     

Sowing the Seeds of Reason in the Field of the Terminator Debate

In an effort to restrict seed piracy in the global agricultural market, Monsanto intends to implement some form of genetic use restriction technology (GURT). Regarding such intentions, many activist groups adamantly contend that Monsanto will be acting immorally if GURTs, specifically Terminator Technology (TT), are implemented in the global agricultural market. They argue that the potential implementation of TT is immoral because it threatens to infringe upon the rights of resource-poor farmers (mainly in developing countries) by denying them the ability to save the seed derived from their harvests. While there may be ways that the implementation of TT can be construed as wrong, I narrowly argue that Monsanto will not be wrongfully infringing upon the basic rights of resource-poor farmers if it actually implements TT. Moreover, as long as Monsanto takes the appropriate measures to minimize the possible negative effects that TT may have on resource-poor farmers, and allows these farmers to make an autonomous choice to use seed that contains this technology, Monsanto’s possible implementation of TT cannot be accurately considered to instantiate an immoral violation of basic rights.     

False Discoveries in UK Mutual Fund Performance

We use a multiple hypothesis testing framework to estimate the false discovery rate (FDR) amongst UK equity mutual funds. Using all funds, we find a relatively high FDR for the best funds of 32.8% (at a 5% significance level), which implies that only around 3.7% of all funds truly outperform their benchmarks. For the worst funds the FDR is relatively small at 7.6% which results in 22% of funds which truly underperform their benchmarks. For different investment styles, this pattern of very few genuine winner funds is repeated for all companies, small companies and equity income funds. Forming portfolios of funds recursively for which the FDR is controlled at a ‘acceptable’ value, produces no performance persistence for positive alpha funds and weak evidence of persistence for negative alpha funds.     

Asset allocation and portfolio performance: Evidence from university endowment funds

We use university endowment funds to study the relationship between asset allocation decisions and performance in multiple asset class portfolios. Although endowments differ substantially in asset class composition, policy portfolio returns and volatilities are remarkably similar across the sample. The risk-adjusted performance of the average endowment is negligible, but actively managed funds generate significantly larger alphas than passive ones. This is consistent with endowment managers exploiting their security selection abilities by over-weighting asset classes in which they have superior skills. Contrary to both theory and prevailing beliefs, asset allocation is not related to portfolio returns in the cross-section but does indirectly influence performance.     

Regionalism Within Multilateralism: The WTO Trade Policy Review of Canada

The World Trade Organisation published a Trade Policy Review of Canada in 2003. In this paper, we discuss the WTO Review and augment the discussion by presenting original data and reviewing the empirical literature. The WTO concludes that Canada's trade regime is open and transparent but maintains barriers in a few important sectors. We subject this claim to empirical scrutiny, comparing Canada's actual imports to a multilateral benchmark based on the gravity equation. We show that Canada imports about what should be expected given the size of its economy and its location. In a second benchmarking exercise, we show that Canada's anti‐dumping initiations are in proportion to its imports and that Canada's exports are targeted less by other countries’ anti‐dumping investigations than what might be expected based on Canadian export levels. Like many other countries, Canada has pursued trade liberalisation through the World Trade Organisation while simultaneously signing multiple regional trade agreements. Our summary of the recent literature indicates that Canada's regional trade agreements have generated more trade creation than trade diversion. Canada has also spurred imports from the least developed countries by unilaterally eliminating tariffs and quota barriers on 48 of the world's poorest countries in January 2003. We also discuss Canadian progress in opening its agriculture and clothing industries. Overall, we conclude that Canada appears committed to advancing globalisation through multilateral trade liberalisation supplemented by unilateral and bilateral initiatives.