Hedge Fund Regulation and Misreported Returns

This paper introduces a cross‐country law and finance analysis of the misreporting behaviour in the hedge fund industry in terms of smoothing returns so that a fund consistently generates positive returns. We find strong evidence that international differences in hedge fund regulation are significantly associated with the propensity of fund managers to misreport monthly returns. We find a positive association between wrappers and misreporting, particularly for funds that do not have a lockup provision. Also, we find some evidence that misreporting is less common among funds in jurisdictions with minimum capitalisation requirements and restrictions on the location of key service providers. We assess the robustness of our finds to a number of specifications, including, different specifications of misreporting bin widths, subsets of the data by fund type, as well as specifications controlling for collinearity and selection effects and other robustness checks. We show misreporting significantly affects capital allocation, and calculate the wealth transfer effects of misreporting and relate this wealth transfer to differences in hedge fund regulation.     

The Effects of Multiple Health and Nutrition Labels on Consumer Food Choices

Consumers face an increasing availability of information on health and nutritional aspects of foods, especially on food package labels. Previous research has identified that this information is positively valued, but the effect of presenting several items of information simultaneously is not well understood. We conduct a choice experiment to identify the effects of multiple health and nutrition information labels for two products representing a healthy and less healthy food choice. Although our consumers attach positive utility to most of the individual labels evaluated here, the simultaneous presence of more than one label only has positive impact on utility in one of nine possible cases. Therefore, promotion of multiple labels should not be considered beneficial a priori either from a regulatory or business perspective. In addition, results show that consumers show a higher willingness to pay for nutrition and health labels for less healthy products.     

Antitrust economic analysis in food marketing channels: a global perspective

Antitrust enforcement concerning monopolies, mergers, and cartels is converging across all market‐oriented economies in the world. This convergence is based upon neoclassical economic analysis of industrial organization. The role of empirical economic analysis, however, has not converged as rapidly as the conceptual model because different countries have different enforcement institutions and strategies. This article explains how antitrust enforcement has evolved over time from public agencies to a market for enforcement that admits private parties. Private party law suits, and especially class action law suits on behalf of groups such as farmers and consumers, is a mechanism for redressing the often superior legal and economic resources that defendant corporations have and public agencies do not have. Enforcement and the role of empirical analysis are compared in the United States and other countries. Examples of enforcement from different countries illustrate the strengths and weaknesses of different approaches. Finally, some insights explain how economists function in enforcement and the attributes required for success.     

Private enforcement,corruption, and antitrust design

We examine how the rationale for enabling versus precluding private antitrust enforcement depends on whether antitrust enforcement is corruption-free or plagued by corruption. Corruption in courts affects the incentives to bring forth private antitrust lawsuits. This, in turn, along with corruption in antitrust agency enforcement, alters the incentives to commit antitrust violations. The social welfare effect of enabling private antitrust enforcement in the presence of corruption depends on whether corrupt officials in the ensuing bribery contests favor a particular firm and if so which one and to what extent. Under some circumstances, corruption actually increases the social desirability of private antitrust enforcement relative to the no-corruption scenario. Our analysis highlights that the effects of a given legal arrangement for antitrust enforcement critically depend on the corruption environment and, thus, that the appropriate design of antitrust institutions is context-specific.     

The Demand for Healthcare Regulation: The Effect of Political Spending on Occupational Licensing Laws

Using data on political spending in state elections, this study considers the role of political contributions by healthcare professional interest groups in states' decisions to enact occupational licensing laws. These laws govern how different professions may operate in healthcare markets, and while they ostensibly exist to protect consumers, licensing laws can also insulate professionals from competition in healthcare markets. Higher political spending by physician interest groups increases the probability that a state maintains licensing laws restricting the practices of nurse practitioners (NPs) and physician assistants (PAs). Conversely, increased spending by hospital interest groups increases the probability that a state allows NPs and PAs to practice with more autonomy. Nurse groups, which include groups affiliated with NPs, have a smaller effect on licensing laws. And nonphysician groups, which include groups affiliated with PAs, have almost no effect on licensing laws. These results are consistent with the investment theory of political spending.     

Competition in bureaucracy and corruption

This paper studies the consequences of introducing competition between bureaucrats. Firms are supposed to invest into eliminating negative externalities of production, while bureaucrats administer the process by issuing licences. Some bureaucrats are corrupt, that is, they issue a licence to any firm in exchange for a bribe. The competition regime is found to create more ex ante incentives for firms to invest, while the monopoly regime is better at implementing ex post allocation, that is, distributing the licences given the firms' investment decisions. Additional results on the effect of punishments and bureaucrats' rotation are provided.     

A survey-based choice experiment on coca cultivation

From 1997 to 2005, an astonishing 5200 million USD was invested to reduce cocaine production in Colombia, the world's main cocaine producer. However, little is known about the effectiveness of policies targeting coca cultivation. This paper uses a survey-based experiment to evaluate the effects of the two main policies: eradication and alternative development programs. Our results support Becker's (1968) model of crime participation and in addition shed light on other non-monetary factors that affect the coca cultivation decision: religion, legitimacy, remoteness, and poverty are found to be important. We find that coca cultivation is inelastic to increases in perceived risk and relative profit so eradication and alternative development would have a rather small effect on coca cultivation. A simple simulation exercise predicts that investing additional hundred thousand dollars in eradication decreases coca cultivation in only 1.5%.     

Do stronger patent rights raise high-tech exports to the developing world?

Despite over 20 years of debate, the TRIPs agreement remains very contentious. This paper evaluates the impact of strengthening patent rights (PRs) in developing countries on developed countries' exports over the 1962-2000 period. Colonial origin is used to isolate exogenous variation in PRs. The impact is then identified by examining the cross-industry difference in sensitivity to PRs. I find that the increase in PRs made in response to the TRIPs agreement added about $35 billion (2000 US dollars) to the value of developed countries' patent-sensitive exports into 18 developing countries. This amount is equivalent to an 8.6% increase in these developing countries' annual value of patent-sensitive imports. The increase in the value of exports was driven by a quantity, rather than a price, increase.     

柳坝沟金矿床重要的找矿标志——钾长石化与硅化

柳坝沟金矿为著名的哈达门沟金矿床的外围岩金矿床,位于华北克拉通北缘西段。本文通过柳坝沟金矿床钾长石化和硅化蚀变特征的实践和理论研究,指出了钾长石化和硅化的野外找矿指示意义,为今后野外勘探同种类型矿床的找矿工作提供线索。     

Bankruptcy law and corporate investment decisions

Major European countries have recently adopted bankruptcy codes that strengthen entrepreneurs’ power to renegotiate outstanding liabilities. Renegotiation in bankruptcy allows lenders to increase recovery rates, however it also weakens the contract’s ability to solve the moral hazard problem embedded in the production project. Hinging on this trade-off, I show in which circumstances a soft bankruptcy law that resembles Chapter 11 in the balance of lenders’ and entrepreneur’s rights encourages the choice of investments that privilege the achievement of long-term results. However, I also show that, in contrast to the common wisdom, soft bankruptcy can lead to the choice of investments that are biased towards the achievement of short-term outcomes.