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K - Law and Economics

Law and Economics

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Entrepreneurship, Small Businesses, and Economic Growth in Cities: An Empirical Analysis

Does entrepreneurship cause urban economic growth and if so how large is the impact? Empirical analysis of such question is hampered by endogeneity. This paper uses two different sets of variables – the homestead exemption levels in state bankruptcy laws from 1975 and the share of MSA overlaying aquifers - to instrument for entrepreneurship and examine urban growth between 1993 and 2002. Despite using different sets of instrumental variables, the ranges of 2SLS estimates are similar, further supporting the significant impact of entrepreneurship on urban growth.

Do Government Guaranteed Small Business Loans Promote Economic Growth and Entrepreneurship?

This paper examines the impact of government guaranteed small business loans on urban economic growth, and compares the growth impacts of government versus market financed entrepreneurship. OLS estimates indicate a significant and positive relation between the Small Business Administration’s guaranteed loans and metropolitan growth between 1993 and 2002. However, first-difference and instrumental variable regressions show no growth impact from government guaranteed loans. In contrast, market entrepreneurship significantly and positively contributes to local economic growth.

Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries Under the New Deal

Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool.

Copyright and Creativity – Evidence from Italian Operas

This paper exploits variation in the adoption of copyright laws within Italy – as a result of Napoleon’s military campaign - to examine the effects of copyrights on creativity. To measure variation in the quantity and quality of creative output, we have collected detailed data on 2,598 operas that premiered across eight states within Italy between 1770 and 1900. These data indicate that the adoption of copyrights led to a significant increase in the number of new operas premiered per state and year.

Gender in Times of Global Governance: Glocalizing International Norms Around Money and Power, Violence and Sex in Peru

Internationally defined gender rights are glocalized in Peru by both state and non-state actors, especially international non-governmental organizations and trade unions. Looking at four different dimensions of gender disparities shows that the more institutionalized a women’s issue is internationally, the more isomorphic it is nationally. The clear codification on the international level leads to the adoption of an identical provision on the national level without the modification of either the text or the spirit of the agreement.

Tradable Immigration Quotas

International migration is maybe the single most effective way to alleviate poverty at a global level. When a given host country allows more immigrants in, this creates costs and benefits for that particular country as well as a positive externality for all those (individuals and governments) who care about world poverty. This implies that the existing international migration regime is inefficient as it fails to internalize such externality. In addition, host countries quite often restrict immigration due to its apparently unbearable social and political costs.

Thoughts on Rule of Law and China

This paper reviews developments in the legal system of the People’s Republic of China since 1978 through the prism of rule of law concepts. Taking a six-prong definition of rule of law for its framework, the paper lays out both the unprecedented progress to date and the considerable challenges for the future, in the following areas: (1) Is there a set of rules which are known in advance? (2) Are these rules actually in force? (3) Do mechanisms exist to ensure the proper application of the rules and to allow for departure from them as needed according to established procedures?

Legal and Economic Reforms in India: an Economist’s Perspective

The Supreme Court of India has used its constitutionally mandated task of interpreting the enforceable fundamental rights enumerated in Part III of the constitution to extend its own powers. This extension in my view poses a dangerous threat to the Constitutional democracy of India. I argue below that the situation not only impacts the spillover effects beyond each case, but the learned justices seem to be incapable of conceptualizing possible spillovers, let alone incorporating them in their decisions.

Does Intellectual Property Rights Reform Spur Industrial Development?

An extensive theoretical literature generates ambiguous predictions concerning the effects of intellectual property right (IPR) reform on industrial development. The impact depends on whether multinational enterprises (MNEs) expand production in reforming countries and the extent of decline in imitative activity. We examine the responses of U.S.-based MNEs and domestic industrial production to a set of intellectual property rights (IPR) reforms in the 1980s and 1990s. Following reform, MNEs expand the scale of their activities.

Conscription and Crime

We estimate the causal effect of mandatory participation in the military service on the involvement in criminal activities. We exploit the random assignment of young men to military service in Argentina through a draft lottery to identify this causal effect. Using a unique set of administrative data that includes draft eligibility, participation in the military service, and criminal records, we find that participation in the military service increases the likelihood of developing a criminal record in adulthood.


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