Do the differences in legal systems hinder international enterprises’ debt financing?

This study examines the impact of the differences in the legal system concerning obligation claim rights between host and multinational enterprises' (MNEs) home countries on bank credit financing by constructing a legal system distance index including four dimensions. Using 57,526 firm-year panel observations of 7,257 firms from 53 countries operating in China, the results find that legal system distance has a negative impact on foreign firms' debt financing. The influential mechanism is due to the increasing transaction costs. Further test finds that the negative effect declines as the cultural differences increase. The heterogeneity analysis finds that the negative impact of the legal system distance on the debt level is more pronounced for those foreign firms with a large scale, short operating age, not enough collateral, and sales in the domestic market, but shows no significant differences between a sole proprietorship and joint ventures. This study not only expands the literature on “Law and Finance” but also provides an implication for foreign firms' debt financing in the emerging host country.     

CRIME PREVENTION PROGRAMS: EVIDENCE FROM CHILE

This paper analyzes the impact of two anti‐crime programs adopted in Chile in the late 1990s. The first (the so‐called Quadrant Plan) is aimed at enhancing the quality of police work and the second (the Secure County Plan), at encouraging the involvement of the community in designing specific projects aimed at reducing the crime rate. It is found that only the Quadrant Plan has been successful in terms of reducing crime rates and has caused an impact through the effect of arrests in deterring crime. The Secure County program does not appear to have had any incidence on crime rates. It is also found that crime is associated with unemployment and that there is persistence in crime rates.     

Homophily versus monitoring: Do all female board directors drive the gender assignment of audit partners?

By examining the extent to which the proportion of female board directors affects the gender assignment of engagement partners, this paper contributes to the existing literature in several ways. First, we investigate the French mandatory joint audit setting, giving rise to a set of concerns with regard to the auditor pair composition. Second, we consider female directors according to their positions on the board in order to determine which of the homophily and monitoring arguments plays the greater part in the auditor selection process. Third, we address the moderating effect of the gender quota law on the link between female directorship and the choice of audit engagement partners. Using appropriate estimation methods, we find that female board members appointed to key monitoring positions (female independent directors and female audit committee members) choose gender-diverse engagement partners. However, counter to the gender similarity (homophily) argument, we find that female inside directors are negatively associated with the selection of gender-diverse engagement partners. The association between gender-diverse boards and gender-diverse audit partners is found to be more pronounced in the period following the enactment of the gender quota law, thereby providing some practical and policy implications with regard to capitalising on the benefits of gender diversity. Supplementary analyses support the preponderance of the monitoring argument over the homophily argument in the auditor selection process.     

Asylum recognition rates in Europe: Policies and performance

A minority of applicants for asylum in Europe gain some form of recognition as refugees, and this has been a controversial issue. From the early 2000s, the EU introduced a series of directives to prevent a race to the bottom in asylum policies and to harmonise policy between destination countries, but the results have not been fully assessed. In this paper I examine the determinants of recognition rates for asylum applicants from 65 origin countries to 20 European destinations from 2003 to 2017. The outcomes of the EU directives have been mixed, but taken together they are associated with increased recognition rates. These made a modest contribution to the trend increase in recognition rates, most of which is due to increased political terror and human rights repression in origin countries. But differences between European countries remain large, even after accounting for origin-country composition and for differences in the adoption of EU directives. Some of this may be accounted for by differences in bureaucratic frameworks through which policy is administered.     

Corruption and assortative matching of partners in international trade

Although the effects of corruption on bilateral trade are well-documented, its impact on the composition of trading partners remains unexplored. In this paper, we argue that corruption in a country imposes asymmetric costs on its trading partners depending on their characteristics. Consequently, as the level of corruption in a country changes, its trade flows from some of its trading partners change more than others, depending on their characteristics, changing the composition of its trading partners. We focus on two characteristics of trading partners: (1) the level of corruption and (2) membership in the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention). Using the gravity model, we find evidence of a negative assortative matching in international trade with respect to corruption. We find that corruption in a country is negatively associated with trade flows from high-corrupt countries and is positively associated with trade volume from signatories of the OECD convention. Our results suggest that future studies on this topic should consider controlling for institutional dissimilarities between the trading partners as it has implications for bilateral trade costs.     

E-commerce in Spain: Determining factors and the importance of the e-trust

This paper identifies and estimates the determinants for participating in e-commerce and developing e-trust, as well as the importance of e-trust for e-commerce in Spain. For its analysis, a national survey from 2014 to 2019 is used and the logit model is implemented. It is concluded that the e-trust is a determining factor in e-commerce, and the improvement of equality education helps the growth of online commerce and e-trust. In turn, e-trust encourages the use of all digital resources.     

Do corporate taxes affect employee welfare? Evidence from workplace safety

We examine the impact of tax policy on worker safety that exploits spatial discontinuity in treatment and control establishments stemming from state-level corporate tax changes. The granularity of our data and econometric approach allows us to exploit within-firm, across-establishment variation in worker safety shedding light on the real effects of headquarter versus plant-level decisions. Plant-level injury rates increase with tax hikes in establishment states, but not with those in headquarter states, highlighting the importance of plant-level decisions. We explore three plausible non-mutually exclusive mechanisms to help explain these findings ─ safety investment, leverage, and labor stress channels. We find that in the presence of a tax hike, firms reduce safety-related investments, and the tax effect on injury rates is exacerbated for firms that increase leverage and for firms where employees work longer hours and seasonal workers are used. Overall, our findings suggest that tax increases lead to negative welfare outcomes for employees, with no similar benefit accruing for tax cuts.