Squatting as a transition problem in South Africa

This paper applies principles of transition to land tenure and squatting in South Africa. Political transition in South Africa reassigned political property rights, which produced contestable, and rent‐seeking incentives for squatting as a means to privatize land and redistribute wealth. Government failure to establish and protect private property rights in a squatter camp resulted in common‐pool problems that resisted private and public resolution with consequent rent dissipation and social loss. In response to this retreat from duty, informal agents emerged to claim their own share of the prize. Without enforceable rules of capture, the growth of squatter camps in South Africa will continue. JEL classification: D7, H8, K1, K4, R1, R4.     

Operating efficiency of Canadian banks

This article assesses Canadian banks' ability to realize scale economies and cost complementarities in joint production. The Canadian banking system, with its 10 or so large banks and 50 smaller ones, offers a good database for a study of efficiency, especially since previous work suggests that the system's concentration has had little impact on system competitiveness. This article estimates a system of cost and cost share equations using Zellner's iterative seemingly unrelated regression technique, then evaluates scale economies and cost complementarities from the estimated cost functions' first and second partial derivatives. The article compares a model that classifies deposits as inputs with another that classifies them as outputs. The empirical findings indicate that deposits are better modelled as outputs than inputs; that Canadian banks organize to exhaust available sources of scale economies and economies in joint production; and that conclusions regarding scale economies and cost complementarities differ importantly according to whether deposits are modelled as inputs or as outputs.     

Economics at the FTC: Deceptive Claims,Market Definition,and Patent Assertion Entities

In 2015, the Federal Communications Commission (FCC) imposed common carriage regulation—so-called Title II requirements—on previously unregulated broadband Internet service providers. The regime shift was premised on the FCC’s findings that such rules had demonstrably yielded economic gains. This paper evaluates the FCC’s empirical arguments and finds them uncompelling. Adjustments for inflation or general economic trends eliminate the effects cited by the FCC. Moreover, contrary to the Commission’s assessment, mobile services and broadband markets have shown notable growth in response to deregulatory events that reduce Title II requirements.     

The effect of state health insurance benefit mandates on premiums and employee contributions

The average US state has 40 benefit mandates, laws requiring health insurance to cover particular conditions, treatments, providers or people. We investigate the extent to which these mandates increase the health insurance premiums paid by employers, and the extent to which these higher premiums are passed on to employees in the form of higher employee contributions. We use state-level data on premiums and employee contributions to health insurance from the insurance component of the 1996–2011 Medical Expenditure Panel Survey. Our main analysis is a fixed effects regression that controls for age, race, income, union membership and the presence of state mandate waivers. We find robust evidence that the average mandate increases premiums by approximately 0.6%, and that mandates lead to similar increases in employee contributions for single-coverage health insurance plans. Alternative specifications using an AR(1) error structure estimate a larger effect of mandates, while those using generalized estimating equations estimate smaller effects. We find that mandates requiring insurers to cover a specific benefit, as opposed to a specific type of provider or person, lead to the largest increases in employee contributions.     

Can the Timing of Negotiations Impact the Consequences of Mergers?

This paper uses a theoretical model to examine whether variation in the timing of negotiations between buyers and sellers can alter the effects of mergers between sellers. The model shows that mergers between horizontally overlapping firms lead to price increases regardless of how negotiations take place. In contrast, mergers between firms in different markets can only lead to higher compensation for the combined firm when negotiations occur sequentially. However, any price effects from out‐of‐market mergers stem from a mechanical redistribution of existing market power and not from a loss in competition. Published 2014. This article is a U.S. Government work and is in the public domain in the USA.     

The Quality of Institutions and Organizational Form Decisions: Evidence from Within the Firm

In many retail and service sectors, firms have to establish a physical presence in a geographic market to access customers there. In countries where the quality of institutions is low, this can put assets at risk. We use data on the operations of a multinational, multibrand hotel company to show that in environments where local institutions are weaker—as proxied mainly by the World Bank's Checks index—the company eschews direct ownership. Rather than increasing its reliance on franchising, as predicted by some models, the company relies more on another form of organization commonly used in this industry, namely management contracts. We explain these patterns by emphasizing how the quality of the institutional environment affects the cost of using equity‐based organizational forms, per arguments in the current literature, but also the cost of enforcing the terms of franchise contracts.     

The Value of CEO Mobility: Contextual Factors That Shape the Impact of Prior CEO Experience on Market Performance and CEO Compensation

This study examines the value that prior CEO experience has for the companies that hire such CEOs—as reflected in the firms’ subsequent market‐based performance—as well as its value for the CEO that possesses this experience—as reflected in his or her initial compensation. While we suggest that shareholders tend not to benefit from firms hiring experienced CEOs, we also argue that particular firm and industry contextual factors that shaped the prior CEO experience help ameliorate this detrimental effect. Regardless, we also suggest that prior CEO experience generally stands to benefit the CEOs, in that it brings them a compensation premium over those CEOs without such prior experience. We tested our hypotheses on a sample of 654 US CEO succession events that occurred between 2001 and 2004 and found broad support for our hypotheses. We close with a discussion of the implications of our findings for future research as well as what they mean for firms hiring experienced CEOs and for CEO careers more generally. © 2015 Wiley Periodicals, Inc.