cssi/SciSciGPT-SciSciNet huggingface dataset:
Taxes and Growth in a Financially Underdeveloped Country: Evidence from the Chilean Investment Boom

This paper argues that taxation of retained profits is particularly distortionary in an economy with good growth prospects and poorly developed financial markets because it primarily reduces the investment of financially constrained firms, investment that has marginal product greater than the after-tax market real interest rate. Contrarily, taxes on distributed profits or capital gains primarily reduce the investment of financially unconstrained firms. Chile experienced a banking crisis over the period from 1982 to 1986 and in 1984 reduced its tax rate on retained profits from 50 percent to 10 percent. We show that, consistent with our theory, there was a large increase in aggregate investment after the reform which was entirely funded by an increase in retained profits. Further, we show that investment grew by more in industries that depend more on external financing, according to the Rajan and Zingales (1998) measure. Finally, we present some weak evidence from comparisons of investment rates across firms for several different measures of their likelihood of being financially constrained.
Duty in Tort Law: An Economic Approach

Torts textbooks say that a negligence claim consists of four components: duty, breach, causation, and damages. The plaintiff must show, or at least the court must be prepared to assume, that the defendant owed the plaintiff a duty to take care. If the defendant owed the plaintiff a duty of care, the plaintiff will be permitted to prove that the defendant breached the duty of care. The third component consists of the plaintiff’s proof that the defendant’s breach caused his injury, and the final component is the plaintiff’s proof that he suffered a compensable injury. Theories of tort law have focused on the breach and causation components of negligence, saying little if anything about duty.1 Indeed, the two most comprehensive consequentialist efforts to explain tort law—the utilitarian analysis of Oliver Wendell Holmes2 and the economic analysis of Richard Posner3—have focused almost entirely on breach and causation issues while virtually ignoring the duty question.4 My goal in this paper is to fill the space left largely untouched by Holmes and Posner by providing an economic framework that explains duty doctrine. I hope to make clear that duty doctrine is in no sense inconsistent
Sticky information and sticky prices

Abstract In the U.S. and Europe, prices change at least once a year. Yet nominal macro shocks seem to have real effects lasting well beyond a year. “Sticky information” models, as posited by Mankiw and Reis [2002. Sticky information versus sticky prices: a proposal to replace the new Keynesian Phillips curve. Quarterly Journal of Economics 117, 1295–1328], Sims [2003. Implications of rational inattention. Journal of Monetary Economics 50(3), 665–690], and Woodford [2003. Princeton University Press: Princeton, NJ], can reconcile micro flexibility with macro rigidity. We simulate a sticky information model in which price setters update information on macro shocks less frequently than information on micro shocks. We then examine price changes in the micro data underlying the U.S. CPI. Empirical price changes react to old information, just as sticky information models predict.
Justiciability, Federalism, and the Administrative State

Article III provides that the judicial power of the United States extends to certain justiciable cases and controversies. So if a plaintiff bringing a federal claim lacks constitutional standing or her dispute is moot under Article III, then a federal court should dismiss. But this dismissal need not end the story. This Article suggests a simple, forward-looking reading of case-or-controversy dismissals: they should be understood as invitations to legislators to consider other pathways for adjudication. A case dismissed for lack of standing, for mootness, or for requesting an advisory opinion might be a candidate for resolution in a state court or administrative agency. And although the Supreme Court has frequently policed the delegation of the “judicial power of the United States,” legislative delegations of non-justiciable claims should not transgress those limits. Instead, case-or-controversy dismissals imply that non-Article III options are permissible. This formulation is more than a doctrinal trick. It has normative consequences across a range of dimensions. For one thing, this approach reinvigorates the separation-of-powers purposes of justiciability doctrine by turning our attention from judges to legislators. When courts seemingly use justiciability to curtail private enforcement or access to justice, we could re-interpret the results as revealing a legislative failure to authorize non-Article III options. More affirmatively, case-or controversy dismissals could be focal points for political pressure in favor of more rigorous enforcement of important laws that the federal executive may be shirking. Further, consistent with “new new federalist” accounts, this Article suggests another avenue for federal–state interactivity in the development and enforcement of federal law. This too is of added salience given that private and state enforcement may become even more significant in light of the current occupants of the federal executive branch.
EXPLORING POTENTIAL ARMS RACES

Defense spending accounts for a larger share of national output in most countries than many of the other allocative decisions, both public and private, which the majority of economic research aims at explaining. Yet with notable exceptions, most economists have ignored this topic and relegated to political science the task of explaining how resources are allocated to this sector. This paper aims at contributing to this literature by economists. A theoretical model is developed to explain the dynamics of the arms acquisition process. Within this framework, defense expenditures are governed by the expenditures of potential adversaries if these exist. Then the model is empirically tested using a sample of countries or dyads which have been proposed to be adversaries. The direction of the prima facie causal relationship between the military expenditures of these dyads is investigated using parametric causality tests. The results indicate that some of these country's expenditures seem to reflect an arms race while other proposed dyads seem not to be adversaries, i.e., their expenditures are independent and therefore, seem to be governed by other than an external threat.
The Fourth Era of American Civil Procedure

Every contemporary American lawyer who has engaged in litigation is familiar with the now fifty-four-volume treatise, Federal Practice and Procedure. Both of that treatise’s named authors, Charles Alan Wright and Arthur Miller, have mourned the death of a Federal Rules regime that they spent much of their professional lives explaining and often celebrating. Wright shared a sense of gloom about federal procedure that he compared to the setting before World War I. Miller has also published a series of articles that chronicled his grief.We agree that something has fundamentally changed. In fact, we believe that we are in the midst of what should be labeled a new era - the fourth in the history of American civil procedure. The first three eras are rather conventional: the first era began with the country’s founding; the second era began in the middle of the nineteenth century with the introduction of code pleading; and the third era commenced in 1938 with the Federal Rules of Civil Procedure.In Part I of this article, we defend the thesis that we are now in a distinct, fourth era. This era is not defined, for the most part, by the introduction of a new set of formal procedural rules; indeed, the formal procedural rules of the third era are largely intact. But if the core values of those rules have been eviscerated by judicial decisions, interred by antipathy, and eulogized by none other than Wright and Miller, we should acknowledge that the third era has, in fact, yielded to a fourth. In Parts II, III, and IV, respectively, we untangle the many forces that conspired to produce this fourth era, offer an unflattering appraisal of it, and begin to plot a strategy for escaping its clutches.
Random Inspections and Periodic Reviews: Optimal Dynamic Monitoring

We study the design of monitoring in dynamic settings with moral hazard. An agent (e.g. a firm) benefits from reputation for quality, and a principal (e.g. a regulator) can learn the agent’s quality via costly inspections. Monitoring plays two roles: an incentive role, because outcomes of inspections affect agent’s reputation, and an informational role because the principal directly values the information. We characterize the optimal monitoring policy inducing full effort. When information is the principal’s main concern, optimal monitoring is deterministic with periodic reviews. When incentive provision is the main concern, optimal monitoring is random with a constant hazard rate.
The Limits of Claim Differentiation

The process of claim construction is the most important part of patent litigation. Courts employ a number of rules, or canons, to reach an understanding of what patent claims mean. Of these, the doctrine of claim differentiation has arguably had the most significant impact on claim construction. Understood most broadly, the claim differentiation doctrine provides that no two claims in the same patent should be interpreted to have the same scope. As a general matter, applying the doctrine of claim differentiation results in broader constructions of patent claims, because it is most commonly used to prevent defendants from limiting a broad genus claim to the range of embodiments actually disclosed or more explicitly recited in other claims. Sometimes this is the right result, because defendants are improperly seeking to limit broader genus claims to the preferred embodiments disclosed in the specification. But at other times it leads to problematic results by expanding claims to cover things the patentee never intended. In this Article, I conduct an empirical review of claim differentiation decisions in the Federal Circuit and in the district courts, and I suggest limiting
The conflicting choices of alternating selves

Abstract Participants made choices after the salience of their social identities was manipulated. Choices assimilated to the salient identity, whether that identity stemmed from a person’s role (e.g., student, family member) or culture (e.g., Chinese, American). Thus, the preferences that participants expressed depended on the identity that happened to be salient at the moment of choice, with participants expressing preferences when one identity was salient that conflicted with the preferences they would express were another identity salient. These effects only arose for those who held and identified with the evoked identity. Studies further revealed that such identity-congruent choices influence post-choice satisfaction and regret: participants were less satisfied with their prior choices when the identity salient during post-choice evaluation or consumption was different from the identity salient during choice, compared to when the “choosing” and “consuming” identities were the same. Implications of the findings are discussed.
The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution

Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones? This paper shows that the standard Utilitarian framework for tax policy analysis answers this question in the a¢ rmative. Moreover, based on the empirical distribution of height and wages, the optimal height tax is substantial: a tall person earning $50,000 should pay about $4,500 more in taxes than a short person earning the same income. This result has two possible interpretations. One interpretation is that individual attributes correlated with wages, such as height, should be considered more widely for determining tax liabilities. Alternatively, if policies such as a tax on height are rejected, then the standard Utilitarian framework must in some way fail to capture our intuitive notions of distributive justice.
Incentives for Efficient Inventory Management: The Role of Historical Cost

This paper examines inventory management from an incentive perspective. We show that when a manager has private information about future attainable revenues, the residual income performance measure based on historical cost can achieve optimal (second-best) incentives with regard to managerial effort as well as production and sales decisions. The LIFO (last-in-first-out) inventory flow rule is shown to be preferable to the FIFO (first-in-first-out) rule for the purpose of aligning incentives. Our analysis also finds support for the lower-of-cost-or-market inventory-valuation rule in situations where the manager receives new information after the initial contracting stage.
Aggregate uncertainty and the supply of credit

Abstract This paper presents a model in which a bank can exhibit self-insurance with loan supply contracting when uncertainty increases. This prediction is tested with U.S. commercial banks, where identification is achieved by looking at differential effects according to banks’ capital-to-assets ratio (CAR). Increases in uncertainty reduce the supply of credit, more so for banks with lower levels of CAR. These results are weaker for large banks, and are robust to controlling for monetary policy, to different measures of uncertainty, and to breaking the dataset in subsamples. Quantitatively, the effect of uncertainty shocks on credit supply is about as important as that of monetary policy shocks.
Paternalism and Cognitive Bias

Humans are hobbled by costly and stubborn biases of reason and emotion. We severely underestimate our health risks and discount the future value of resources. These biases of reason and emotion are not exotic; they afflict normal people under normal stresses. I will argue that nonpaternalistic, institutional assistance can improve judgment, and that these improvements can both promote our autonomy and avoid costly outcomes when the biases go unchecked. In these cases, much of the crucial information is theoretically arcane. Had people known that their reasoning was so unreliable, they would have chosen strategies to counteract such sorry decision-making performance.
Three-stage DEA models for incorporating exogenous inputs

In this paper, we discuss three-stage models that control for exogenous, non-discretionary inputs in data envelopment analysis. In a recent article in this journal, Monte Carlo analysis was employed to compare and contrast alternative DEA models that measure efficiency in the presence of exogenous variables. The methodology for comparison was flawed, calling into question the results presented. We introduce new second-stage models and compare and contrast them with simulated data.
High performance work systems in the global context: A commentary essay

Abstract The study by Shih, Chiang, and Hsu (2011) contributes substantially to the high performance work systems (HPWS) literature by sampling Chinese host country nationals (HCNs) of a Taiwanese firm and by introducing new mediating variables. A number of interesting issues follow from the study, including the use of perceived HPWS and the dimensionality of HPWS. This commentary essay briefly explores each of these areas.
Protective governance choices and the value of acquisition activity

Protective governance structure is often viewed as costly to minority shareholders who bear the costs of opportunism by entrenched managers. A less common view is that protective governance encourages value-enhancing initiative, allowing risk-averse managers to pursue projects they would otherwise forgo. To assess these views we examine the acquisition decisions of S&P 500 firms between 1994 and 2005 and document two entrenching dimensions of governance: founding family presence and larger boards with more inside directors. We find that family firms destroy value when they acquire, consistent with an agency cost explanation for acquisitions. In contrast, firms with large boards and more insiders are more likely to acquire and to create value when they do acquire. These results are consistent with benefits to managerial initiative when managers are insulated from discipline. Finally, we find no systematic evidence that shareholder right limiting provisions either facilitate managerial entrenchment or lead to wealth losses through acquisition activity.
The Information Content of Goodwill-Impairments under FAS 142: Implications for External Analysis and Internal Control

With its standards FAS 141 and 142 the Financial Accounting Standard Board has revolutionized the accounting for business combinations. One of the major changes is the abolishment of goodwill-amortization, which has been replaced by an annual impairment test at the level of a reporting unit. Among other things, this new regulation is intended to improve the information content of goodwill accounting. This paper investigates into the information content of such an impairment from the perspective of external or internal financial analysis. I examine how impairment losses resulting from FAS 142 should be interpreted and treated in the internal and external performance analysis. My analysis shows that an impairment can be due to several reasons, not just to a deteriorating economic performance. In particular, the way the impairment test is conducted according to FAS 142 may even lead to a discrimination of economically viable investment projects.
Banking market conditions and deposit interest rates

Abstract This paper shows that the impact of market structure on bank deposit interest rates is complex. Both market size structure and multimarket bank presence have independent effects on rates. There is evidence that mid-size banks were more aggressive competitors than other banks, but that the effect of market structure on deposit rates has evolved over time, with mega-banks recently becoming more aggressive competitors. This may be related to the growth of mega-banks in many markets. These findings have implications for existing theories of deposit pricing and, by extension, antitrust policy in banking.
Bank interest rate risk management and valuation of earnings

This paper examines banks’ interest rate risk management and its effects on the persistence and valuation of earnings. We first develop a novel measure of interest rate risk management by incorporating asymmetric changes in interest rates on assets and liabilities in response to market rate changes. Utilising this measure, we document that U.S. bank holding companies with more effective interest rate risk management have more persistent net interest income and a higher valuation of net interest income. This study helps investors and regulators assess banks’ interest rate risk management from the earnings perspective and the sustainability of net interest income.
Public Finance without Taxation: Free–Riding as Institutional Artifact

Expositions of the theory of public finance mostly wrongly assume that taxation is necessary to finance public goods. Taxation isn't necessary to finance public goods because free riding is an institutional artifact of the analytical dichotomy between public and private goods, which prevents recognition of social interaction through the institutions of civil society. Free riding is also abetted through the particular institutional presumption that public goods must be provided by collective entities that operate without alienable ownership. Free riding is a product of a particular institutional arrangement and is not a universal quality of societal living together. There is a deep similarity between cities and such entities as hotels and malls which supply public goods without taxation. Center stage in the theory of public finance can alternatively be occupied by the social organization of shared consumption, with taxation relegated to side show status.
A Topological Invariant for Competitive Markets

Abstract This paper summarizes the concepts of global cones and limited arbitrage introduced in Chichilnisky ( Economic Theory , 1995, 5, 79–108), and the corresponding results establishing that limited arbitrage is necessary and sufficient for the existence of a competitive equilibrium and for the compactness of Pareto frontier (announced in Chichilnisky ( American Economic Review , 1992, 84, 427–434, and Chichilnisky ( Bulletin of the American Mathematical Society , 1993, 29, 189–207). Using the same global cones I extend my earlier results to encompass ‘mixed economies’ based on Chichilnisky (CORE Discussion Paper No. 9527, 1995). I introduce a topological invariant for competitive markets which deepens the concept of limited arbitrage. This invariant encodes exact information on the equilibria and on the social diversity of the economy and all its subeconomies, and predicts a failure of effective demand.
The long-run performance of stock returns following debt offerings☆

We document substantial long-run post-issue underperformance by "rms making straight and convertible debt o!erings from 1975 to 1989. This long-run underperformance is more severe for smaller, younger, and NASDAQ-listed "rms, and for "rms issuing speculative grade debt. We also "nd strong evidence that the underperformance of issuers of both straight and convertible debt is limited to those issues that occur in periods with a high volume of issues. In contrast to earlier event studies that found insigni"cantly negative abnormal returns at the time of debt issue announcements and concluded that debt o!erings had no impact on shareholder wealth, our results suggest that debt o!erings, like equity o!erings, are signals that the "rm is overvalued. As with equity o!erings and repurchases, the market appears to underreact at the time of the debt o!ering announcement so that the full impact of the o!ering is only realized over a longer time horizon. ( 1999 Elsevier Science S.A. All rights reserved. JEL classixcation: G14; G32
Thinking Outside the Borders: Investors’ Underreaction to Foreign Operations Information

I use industry-level returns in foreign markets to examine the hypothesis that value-relevant foreign information slowly diffuses into the stock prices of U.S. multinational firms. A trading strategy that exploits foreign information generates abnormal returns of 0.8% monthly. I find that the market responds more slowly in periods with lower media coverage of foreign news and to information from more linguistically and culturally distant countries. These results suggest that both investors' inattention and lack of understanding of foreign information slow the incorporation of new information into prices. I further separate these two mechanisms by examining market responses to earnings surprises
Judicial Training in Turkey in Light of Constitutional Traditions and Europeanization

In last years, constitutional culture in Turkey has known developments in the field of the Rule of Law and Pluralism, achieving a further step of a process started with the adoption of the Constitution of 1961, which firstly broke the kemalist ideology of "sacralization" of the State. Nevertheless, the principle of statehood, characterizing the Republic of Turkey since its creation in 1923 and now affirmed in art. 1 of the Constitution of 1982, still influences Turkish institutions.Concerning the judiciary, arts. 140, 144 and 159 of the Constitution still decline the principle in terms of institutional dependence from Government, while recent chronicles pose the issue of the relations between judicial and political power. This imposes to carefully consider the relevance of recent Euro-driven reforms in the field of judicial training, which is becoming an increasingly crucial element in order to grant effective judicial independence and interface with civil society. In effect, the enforcement of the EU conditionality principle and the participation to programs such as the Euro-Med Justice Programme, aiming at promoting judicial training, in the form of exchange of knowledge and experience, brought to the establishment of a Judicial academy in 2003 and the modernization of the judicial training system. This paper highlights the recent evolution of Turkish constitutional culture in relation to judicial independence through the lens of judicial training policies. It analyzes the national and supranational initiatives in the field of judicial training. Focusing on three typical elements of any judicial training system – institutions, contents and methods – it describes the difficulties in reforming judicial training, arguing the willingness to maintain the judicial elite dependent, due to specific characters of the Turkish political system. In this framework, the European factor of modernization remains limited to specific contents, such as human rights and EU law, but (still) do not really affect methods and the institutional framework, nor opens judicial training to social pluralism.
Ideologically Oriented Enterprises Faced with the Reconfiguration of Ethics and Spiritual Management

The spread of market rationality leads to new fertilizations between economic markets and spiritual markets. The paper adresses the legal challenges due to a deeper renewal of a pluralism of economic legitimacies linked to reference points such as business “ethics,” “culture,” and “participative management.” What difference should we see between the appearance of a fast-food restaurant, Quick’s, that prepares meat in accordance with Islamic law and the secular business culture of Coca-Cola? To what extent can an employer decide and state its own “ethics” or “culture,” which for the employer might be of the order of a principle and not of an exceptional adaptation? This normative business perspective does not imply extreme communitarianism nor extreme intuitu personae. Is it possible to address these issues not as arbitrary claims, but as objective reference to a particular ethical project. This claims are often geared toward benefiting minorities, but not only, as shown by the "spiritual" trend in management".
How Do I Love Thee, Let Me Count the Days: Deathbed Marriages in America

It was early evening on August 8 when they gathered at the bedside of legendary Washington tycoon Herbert H. Haft, who lay in a glass–enclosed cubicle in the second–floor intensive care unit of Sibley Memorial Hospital. Wearied by age and illness, Haft, 83, was jaundiced from liver failure, his weakened heart maintained a feeble beat and his kidneys no longer functioned. Short and pugnacious, the white–haired millionaire and former Wall Street terror who stood just over five feet tall now seemed shrunken and frail against the expanse of his hospital bed. He had just two weeks to live, but those who had assembled amid monitors, IV tubes and other hospital machinery that muggy Wednesday hadn’t come to say farewell. They were there to see Haft marry. His fiancee, Myrna C. Ruben, 69, wearing an elegant new pink suit, looked nervous as a judge intoned, “Repeat after me.” The wedding ceremony lasted about 5 minutes. There was no cake. Then the groom stayed behind as his bride headed out for dinner with their friends. They threw flowers as she sat down in the restaurant.
Medicaid and Provider Supply

Abstract One of the main goals of public health insurance expansions is to increase access to health care services, but doing so may require providers to move to previously underserved areas. Whether and to what extent any such relocation occurs remains an open question. I study how providers choose their practice locations in response to Medicaid expansions for one of the most common forms of primary care, dental care services. I find that expansions of adult Medicaid dental benefits increased the number of dentists per capita in poor counties relative to non-poor counties by 13 percent, or 2.8 dentists per 100,000 population. The increase was larger in counties where the expansions generated greater financial incentives for dentists.
Payout Policy in the 21st Century

We survey 384 financial executives and conduct in depth interviews with an additional 23 to determine the factors that drive dividend and share repurchase decisions. Our findings indicate that maintaining the dividend level is on par with investment decisions, while repurchases are made out of the residual cash flow after investment spending. Perceived stability of future earnings still affects dividend policy as in Lintner (1956). However, fifty years later, we find that the link between dividends and earnings has weakened. Many managers now favor repurchases because they are viewed as being more flexible than dividends and can be used in an attempt to time the equity market or to increase EPS. Executives believe that institutions are indifferent between dividends and repurchases and that payout policies have little impact on their investor clientele. In general, management views provide little support for agency, signaling, and clientele hypotheses of payout policy. Tax considerations play a secondary role.
Equity Volatility and Corporate Bond Yields

This paper explores the eiect of equity volatility on corporate bond yields. Panel data for the late 1990s show that idiosyncratic ¢rm-level volatility can explain as much cross-sectional variation in yields as can credit ratings. This ¢nding, together with the upward trend in idiosyncratic equity volatility documented by Campbell, Lettau, Malkiel, and Xu (2001), helps to explain recent increases in corporate bond yields. DURING THE LATE 1990s, THE U.S. EQUITY and corporate bond markets behaved very diierently. As displayed in Figure 1, stock prices rose strongly, while at the same time, corporate bonds performed poorly. The proximate cause of the low returns on corporate bonds was a tendency for the yields on both seasoned and newly issued corporate bonds to increase relative to the yields of U.S.Treasury securities. These increases in corporate^Treasury yield spreads are striking because they occurred at a time when stock prices were rising; the optimism of stock market investors did not seem to be shared by investors in the corporate bond market. There are several reasons why the prices of corporate bonds might diverge from the prices of corporate equities. First, stock prices will increase if investors become more optimistic about future corporate pro¢ts. Optimistic expectations bene¢t stock prices much more than bond prices, since stockholders receive all residual pro¢ts, while corporate bondholders receive no more than the promised payments of principal and interest. This explanation does not account for the behavior of corporate bond yields in the late 1990s, however, because yield spreads on corporate bonds over Treasuries should fall, not rise, if investors become optimistic about corporate pro¢ts and thus reduce their expected probabilities of default. Second, there might be a composition eiect if corporate bonds are issued by diierent companies than those that dominate value-weighted equity indexes. Third, an increase in the liquidity premium on corporate bonds relative to Treasury bonds might drive down corporate bond prices without any eiect on equity prices. Fourth, the yields on newly issued corporate bonds might vary because of changes in the special features of these bonds, for example, an increase in the value of call provisions. Such an increase would drive down the prices and drive
Plain Meaning vs. Broad Interpretation: How the Risk of Opportunism Defeats a Unitary Default Rule for Interpretation

The problem of contract interpretation presents courts with significant questions about the nature and methodology of judicial intervention into privately arranged affairs. The court often assumes an active role in interpreting the words of a written contract in part because words have more than one meaning or because a contract is incomplete. When a court chooses amongst variable meanings, or interprets contracts to craft limitations on parties' behavior when express limits do not exist, its choice must be then justified using a framework explored in this essay. Traditionally, commentators have advocated one of two general approaches to supply the methodology to govern judicial choices of contract meaning. The first restricts interpretation to the words used in the contract and the other accepts extrinsic evidence about what one or both of the parties to the contract intended that the words would mean or objective evidence of the meaning supplied by context or evidence of how ordinary commercial parties in a trade used the term or behaved in the current contract. This essay argues that it is the wrong to think that courts must make a dichotomous choice always to prefer extrinsic evidence or always to exclude it. Sometimes the appropriate interpretive methodology should explicitly forego extrinsic evidence while at other times it should embrace extrinsic evidence. The choice between the two methodologies should depend upon an assessment in each case about which interpretive methodology is most likely to (1) curb opportunistic behavior; (2) implement the parties' actual intentions, and (3) achieve these overall goals, in each case in a cost-effective way and thereby maximize gains from trade. The essay identifies a number of factors that may help to resolve which methodology will achieve those goals in different factual settings.
Twenty‐five years of consumer bankruptcy in continental Europe: internalizing negative externalities and humanizing justice in Denmark

This paper explores the problems and processes that led to the birth of consumer bankruptcy in continental Europe, a process that began in Denmark in January 1972 and culminated with the adoption of the Danish consumer debt adjustment act, Gaeldssaneringslov, on 9 May 1984. While this law is often described in primarily humanitarian terms, in the sense of offering a respite to “hopelessly indebted” individuals, both the motivation for the law and its intended scope were not simply accretions on an already multi-layered welfare system. Instead, the law was designed primarily as a pragmatic response to economically wasteful collections activities that imposed negative externalities on debtors, creditors, and especially Danish society and state coffers; the law was intended to force creditors to internalize (or eliminate) these externalities with respect to all debtors unable to pay their debts within a reasonable period of 5 years. The paper also examines the growing pains of this new system. The law originally left significant administrative discretion to judges, which produced vast disparities in treatment of cases in different regions of the country. Ultimately, a reform implemented in October 2005 made the system more accessible, more unitary throughout the country, and more humane. The effects of this reform are already visible in statistical observations of the system, though significant regional variations persist. Given the striking coincidence in timing, this paper also offers brief comparative comments on the parallel design—but very different effect—of the most significant reform of the US consumer bankruptcy law, also effective in October 2005. Copyright © 2009 John Wiley & Sons, Ltd.
Other comprehensive income: a review and directions for future research

Accounting standard setters continue to grapple with conceptual distinctions between components of net income and other comprehensive income (OCI). Bank regulators are dealing with the recommendations of Basel III for Tier 1 Capital, which includes more components of accumulated other comprehensive income (AOCI). Motivated by these standard setting and regulatory debates and changes, I review the literature on the investor and contracting usefulness of comprehensive income, OCI, OCI components and AOCI. I present ideas for future research, including opportunities arising from Basel III changes to bank regulatory capital.
Project financing, entrepreneurial activity, and investment in the presence of asymmetric information

Abstract We analyze a two-period signaling model in which a representative entrepreneur in a regional economy has a project that generates a random cash flow and that requires investment that the entrepreneur raises from a competitive market. The project's type is known to the entrepreneur but not to the investors. Further, the entrepreneur is restricted to issuing debt only or equity only. We first show that there is no separating perfect Bayesian equilibrium (PBE) contract involving the issuance of equity only, that there exists a pooling PBE contract involving the issuance of equity only, and that a debt contract is preferred to an equity contract by our entrepreneur. Next, we suppose that the entrepreneur incurs a non-pecuniary cost of financial distress F > 0 whenever he is unable to make a repayment at time t = 1. We provide conditions on F under which a pooling PBE contract with debt exists and a separating PBE contract with debt and equity exists. Finally, we examine whether a high type entrepreneur will prefer a setting with a cost of financial distress ( F > 0) or a setting in which there is no such cost ( F = 0).
Taking Causality Seriously in Comparative Constitutional Law: Insights from Comparative Politics and Comparative Political Economy

By highlighting the many ways that constitutions vary, comparative constitutional law raises interesting and important causal questions: What explains cross-national constitutional variation, and what are the real-world consequences of different constitutional arrangements? But comparative constitutional law scholarship so far has done relatively little to address these issues of constitutional causes and consequences in a rigorous manner. In this paper, I argue that scholars have much to gain from taking causality seriously in comparative constitutional law, and I suggest that scholarship on comparative politics and comparative political economy provides useful insights about how this might be done. First, I provide an overview of recent comparative constitutional law scholarship to highlight the pervasive issues of causality that it raises. Second, I introduce some of the interesting work that political scientists and economists have done on comparative constitutional law. They are asking questions about the origins and consequences of constitutions that are similar to those raised in comparative constitutional law scholarship - but they are framing them in explicitly causal terms, developing positive theories about cause-and-effect relationships, and testing them empirically using social science methods of inference. Third, I illustrate one such method that can be used to address causal claims and causal questions in comparative constitutional law. Using regression analysis of cross-national data on constitutions, government spending, and other institutional, demographic and economic factors in 80 democracies, I test a series of hypotheses about the effects of different constitutional arrangements on government spending. I also show how multiplicative interaction terms can be used to model and empirically test for conditional relationships between constitutions and various political, social or economic outcomes. I conclude with a proposed agenda for empirical comparative constitutional law, outlining its theoretical, methodological and pedagogical implications.
Family Welfare Receipt, Welfare Benefit Levels, and the Schooling and Employment Status of Male Youth

Abstract This study adds to the literature on the impact of family welfare receipt on child well-being by considering whether male youth residing in families receiving welfare are less likely to be enrolled in school and/or working. According to the results of the study, there is no evidence that parental welfare receipt negatively impacts the schooling and employment decisions of teenage white males. There is some evidence that parental welfare receipt increases the proportion of teen black males who are neither working nor in school. However, this effect disappears when the analysis focuses on the impact of welfare benefit levels, suggesting that the significant impact of parental welfare receipt for blacks may be a result of unobserved differences in family characteristics. Finally, for the combined sample of blacks and whites, higher benefit levels result in a statistically significant, though small, increase in the proportion of youth who are employed only, and a corresponding reduction in the proportion who combine work and school.
INVESTMENT BANK EXPERTISE IN CROSS‐BORDER MERGERS AND ACQUISITIONS

We study the influence of country expertise of investment banks in facilitating cross-border merger deals by analyzing a large international sample of merger and acquisition (M&A) deals. We provide evidence that the geographical proximity, cultural affinity, and local experience of investment banks advising bidding firms on cross-border M&A deals significantly increase the probability of completion of the deal, significantly decrease the time required to complete the deal, and significantly increase the operating performance of the acquiring firm after the deal. Our results are robust to firm, deal, country-specific factors, and endogeneity concerns.
The Seminole Tribe and the Origins of Indian Gaming

The Seminole Tribe of Florida has played perhaps the most important role in the origins and development of Indian gaming in the United States of any single tribe. The tribe opened the first tribally owned high stakes bingo hall in 1979. The tribe in 1981 was involved in one of the earliest lower court decisions forming the basis of the legal theory excluding most states from the regulation of high stakes bingo, a theory that Congress largely codified in the Indian Gaming Regulatory Act (IGRA) years later. The tribe was a party to the Supreme Court decision in 1996 that radically altered the bargaining power between tribes and states over the negotiation and regulation of casino-style gaming under IGRA. And more recently, the tribe has been a leading participant in negotiations and litigation over the regulatory landscape of Indian gaming after the 1996 decision. The Tribe is one of the most successful Indian gaming tribes in the nation.This paper traces that history, but also offers thoughts on how the culture and traditional governance structures of the Seminole Tribe played a part in its leadership role in the arena of Indian gaming.
The Law's Duty to Promote the Kinship System: Implications for Assisted Reproductive Techniques and for Proposed Redefinitions of Familial Relations

Kinship relations, in our society and in most, are organized systematically. That is to say, each kinship connection is constructed, conducted, and considered, not in isolation but by reference to the others. Your uncle is your father’s brother, in just about the same way as your own sibling is your brother and your children are one another’s brothers and sisters. Your spouse is the mother or father of your children, in just about the same way as your mother and father are your parents and the parents of your siblings. One’s beliefs and expectations about what each kinship relationship entails are roughly the same as the beliefs and expectations of the other participants. Something similar can be said about brothers and parents not of one’s own family: the same sorts of relationship exist among them and, though they are not one’s relatives, one understands – without having to investigate – the commitment each of them has to the others, and especially to their own young and to their elderly. The rearing of the next generation of the family, and the care for its elderly, are to some extent the concern of all. (Contrast motorists or pedestrians, who, though they are all conducting more or less the same activity, have no commonality of purpose). This Article develops the concept of the kinship system, proposing a definition. It contrasts a nonsystematic arrangement – one which may indeed be emerging at present – which is based on contract. It maintains that the systematic arrangement better serves fundamental goods. It proposes that the law should promote and protect the kinship system. It applies this thesis to propose a legal response to certain assisted reproductive techniques, and to certain proposals for the redefinition and reconstruction of the family.
It's About Money: The Fundamental Contradiction of "Hobby Lobby"

This Article contends that arguments for and against Hobby Lobby both fail to comprehend the special nature of money. As a consequence, opponents of Hobby Lobby wrongly deny the existence of a substantial burden, while Hobby Lobby’s supporters fail to see that the understanding of financial transactions that underlies their conception of complicity refutes their libertarian views. Financial complicity, as construed by Hobby Lobby’s proponents, should be recognized as a burden on religious exercise. But for the same reason that the financial obligations imposed by the “contraceptive mandate” constitute a burden, they also correlate to countervailing state interests that necessarily outweigh the right to religious freedom. A proper assessment of complicity-based claims and a proper application of the compelling state interest standard both require a better understanding of how money ties people together in relationships which make them mutually responsible for one another’s actions, regardless of what they intend. This recognition of how money works is already reflected in our laws against ”material support.” This Article seeks to show the similarities between religious conceptions of complicity and legal conceptions of material support and to develop a better theoretical understanding of the distinctive properties of money and financial complicity claims.
Edith Penrose's (1959) Contributions to the Resource‐based View of Strategic Management

ABSTRACT We argue that Rugman and Verbeke (2002) underestimate the importance of Penrose's (1959) contributions to the modern resource-based view of the firm. In particular, we take issue with Rugman and Verbeke's (2002) arguments concerning Penrose's (1959) contributions to our knowledge of: (1) the creation of competitive advantage, (2) sustaining competitive advantage, (3) isolating mechanisms, and (4) competitive advantage and economic rents. In our response, we show that Penrose (1959) has both directly and indirectly influenced the modern resource-based view of strategic management.
Who Wins in Settlement Negotiations

When lawsuits are resolved out of court, what determines the settlement price? This article uses a laboratory simulation and path analysis to estimate the relative importance of measurable variables in determining who wins the battle for the cooperative surplus. In the simulated negotiation conditions, seven variables explained more than half of the variation in settlement outcomes achieved by participants, with negotiators� predictions of their opponent's reservation prices the most important, followed by negotiator gender and amount of first offer. Although the specific context of this article is settlement, the insights generated are applicable to any two-party, distributive negotiation.
Reconstructing the Individual Mandate as an Escrow Account

This short essay in Michigan Law Review First Impressions describes how the individual mandate could be reconstructed as an escrow account. Such a restructuring would ameliorate policy concerns regarding the mandate while still deterring the opportunistic behavior that would otherwise occur as a result of the nondiscrimination rules imposed on insurers.
Bush v. Gore - Georgia Lived It Before: Pickrick and the Warren Court

This article describes the background and story of Fortson v. Morris, the U.S. Supreme Court decision carrying into office a governor of Georgia who had lost the popular vote. It enumerates the numerous parallels between this situation in 1966 and the Presidential election dispute in 2000, leading to the U.S. Supreme Court decision in Bush v. Gore.