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Book part

Michael Reksulak, William F Shughart, Robert D Tollison and Atin Basuchoudhary

Contrary to conventional thinking about the purposes and effects of antitrust law enforcement, the personal fortune of John D. Rockefeller, Sr., tripled in the wake of the…

Abstract

Contrary to conventional thinking about the purposes and effects of antitrust law enforcement, the personal fortune of John D. Rockefeller, Sr., tripled in the wake of the Supreme Court’s May 1911 order dissolving the Standard Oil trust. This paper summarizes alternative explanations for that unexpected outcome, tests them empirically and finds them deficient. Coupled with new evidence confirming that major events related to Rockefeller’s antitrust encounter did not produce statistically significant abnormal returns for the company’s stockholders, we conclude that the market failed to react to news of the trust’s dismantling because investors expected the government’s remedy to prove ineffective.

Details

Antitrust Law and Economics
Type: Book
ISBN: 978-0-76231-115-6

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Book part

Randall B. Bunker and William F. Shughart

This research quantifies the economic impact of regional tax policy incentives included in the Gulf Opportunity Zone Act of 2005.

Abstract

Purpose

This research quantifies the economic impact of regional tax policy incentives included in the Gulf Opportunity Zone Act of 2005.

Design/methodology/approach

This research utilized linear mixed-effects modeling and multiple regression procedures with a matched sample panel dataset from 2002 through 2008 containing real-world county-level economic data.

Findings

The results indicated that the regional tax incentives provided by the GO Zone Act did not generate significant increases in key economic indicators included in this study. These tax incentives were intended to spur economic recovery, but based on research findings, they do not appear to have had the impact desired by Congress.

Research limitations/implications

Archival empirical data for the affected region make this study possible but also limit the ability to generalize these results to other regions. In addition, empirical research utilizing real-world data can be prone to internal validity issues that exist due to lack of environmental controls and other possible causal factors.

Originality/value

This research adds to the existing literature by using real-world county-level economic indicators to test the impact of tax policy investment incentives at the regional level and minimizes some of the issues addressed by prior empirical research and provides evidence on the effectiveness of tax policy investment incentives at the regional level.

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Article

Burak Dolar and William F. Shughart

Title III of the USA Patriot Act obligated the private sector to take a more active role in deterring money laundering and disrupting terrorist financing. Complying with…

Abstract

Purpose

Title III of the USA Patriot Act obligated the private sector to take a more active role in deterring money laundering and disrupting terrorist financing. Complying with the new law has increased the cost of doing business dramatically for firms in the financial services industry. This study aims to apply a heterogeneous‐firm model of regulation to test whether the anti‐money laundering (AML) provisions of the Patriot Act redistributed wealth within the commercial banking and thrift sectors.

Design/methodology/approach

The paper analyzes a dataset comprising more than 150,000 observations.

Findings

The empirical evidence suggests that, owing to scale economies in regulatory compliance, the burden has fallen more heavily on smaller institutions. Moreover, the study does not find that the rules written to implement Title III have differentially impacted banks and thrifts at greater risk of being targeted by money launderers, as a public‐interest theory of regulation would predict.

Originality/value

The paper focuses on the AML provisions of the USA Patriot Act.

Details

Journal of Money Laundering Control, vol. 10 no. 3
Type: Research Article
ISSN: 1368-5201

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Abstract

Details

Antitrust Law and Economics
Type: Book
ISBN: 978-0-76231-115-6

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Abstract

Details

Advances in Taxation
Type: Book
ISBN: 978-1-78441-120-6

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Article

Adam Hoffer, Rejeana Gvillo, William Shughart and Michael Thomas

The purpose of this paper is to identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home…

Abstract

Purpose

The purpose of this paper is to identify how consumption of 12 goods – alcohol, cigarettes, fast food, items sold at vending machines, purchases of food away from home, cookies, cakes, chips, candy, donuts, bacon, and carbonated soft drinks – varies across the income distribution by calculating their income-expenditure elasticites.

Design/methodology/approach

Data on 22,681 households from 2009-2012 from the Bureau of Labor Statistics’ Consumer Expenditure Survey were used. The data were analyzed using ordinary least squares regressions and Cragg’s double hurdle model which integrates a binary model to determine the decision to consume and a truncated normal model to estimate the effects for conditional (y>0) consumption.

Findings

Income had the greatest effect on expenditures for alcohol (0.314), food away from home (0.295), and fast food (0.284). A one percentage-point increase in income (approximately $428 at the mean) translated into a 0.314 percentage-point increase in spending on alcoholic beverages (approximately $1 annually at the mean). Income had the smallest influence on tobacco expenditures (0.007) and donut expenditures (−0.009).

Research limitations/implications

Percentage of a household’s discretionary budget spent on the studied goods falls substantially as income gets larger. Policies targeting the consumption of such goods will disproportionately impact lower income households.

Originality/value

This is the first manuscript to calculate income-expenditure elasticities for the goods studied. The results allow for a direct analysis of targeted consumption policy on household budgets across the income distribution.

Details

Journal of Entrepreneurship and Public Policy, vol. 6 no. 1
Type: Research Article
ISSN: 2045-2101

Keywords

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Article

Christopher John Boudreaux, Gokhan Karahan and Morris Coats

The purpose of this paper is to discuss the institutional background and the incentive for FIFA executives to engage in corrupt activities. The authors also highlight…

Abstract

Purpose

The purpose of this paper is to discuss the institutional background and the incentive for FIFA executives to engage in corrupt activities. The authors also highlight recent FIFA scandals and discuss approaches that may affect FIFA’s corruption in the future.

Design/methodology/approach

The authors approach this subject through a historical narrative. The authors review the literature on corruption and apply these findings to the FIFA organization. Due to many similarities, the authors are able to juxtapose the successes and failures of the Olympics, and apply these findings to FIFA.

Findings

Based on the examination, the authors find that FIFA’s corruption can be mitigated, but it is a very difficult task to accomplish. The US Department of Justice has helped to jump start a corruption reform in FIFA. This has also facilitated the activities of the FIFA ethics committee. However, only time will tell whether these changes will be meaningful and last.

Originality/value

The contribution is that the authors closely link the sports management and economics literature on corruption using FIFA as the subject of analysis. Because of the recent FIFA scandal, the authors are able to update the corruption literature as it applies to this organization and, more generally, in sports.

Details

Managerial Finance, vol. 42 no. 9
Type: Research Article
ISSN: 0307-4358

Keywords

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Article

J.William Petty, Joel Shulman and William E. Bygrave

The harvesting of a venture is one of the more significant events in the life of an entrepreneurial firm and its owner. Little is known about this process beyond anecdotal…

Abstract

The harvesting of a venture is one of the more significant events in the life of an entrepreneurial firm and its owner. Little is known about this process beyond anecdotal information. This study is an exploratory effort to investigate this part of the entrepreneurial process when it is accomplished by selling the firm.

Details

Managerial Finance, vol. 20 no. 1
Type: Research Article
ISSN: 0307-4358

Abstract

Many jurisdictions fine illegal cartels using penalty guidelines that presume an arbitrary 10% overcharge. This article surveys more than 700 published economic studies and judicial decisions that contain 2,041 quantitative estimates of overcharges of hard-core cartels. The primary findings are: (1) the median average long-run overcharge for all types of cartels over all time periods is 23.0%; (2) the mean average is at least 49%; (3) overcharges reached their zenith in 1891–1945 and have trended downward ever since; (4) 6% of the cartel episodes are zero; (5) median overcharges of international-membership cartels are 38% higher than those of domestic cartels; (6) convicted cartels are on average 19% more effective at raising prices as unpunished cartels; (7) bid-rigging conduct displays 25% lower markups than price-fixing cartels; (8) contemporary cartels targeted by class actions have higher overcharges; and (9) when cartels operate at peak effectiveness, price changes are 60–80% higher than the whole episode. Historical penalty guidelines aimed at optimally deterring cartels are likely to be too low.

Details

The Law and Economics of Class Actions
Type: Book
ISBN: 978-1-78350-951-5

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Article

Aisha Ismail and Shehla Amjad

The purpose of this paper is two folds: first, to analyze the long-run relationship between terrorism and key macroeconomic indicators (GDP growth, GDP per capita…

Abstract

Purpose

The purpose of this paper is two folds: first, to analyze the long-run relationship between terrorism and key macroeconomic indicators (GDP growth, GDP per capita, inflation and unemployment) and second, to determine the direction of causality between these variables in Pakistan.

Design/methodology/approach

The relationship between terrorism and various macroeconomic indicators is analyzed by applying Johansen cointegration analysis. Furthermore, the causality between terrorism and macroeconomic indicators is tested by applying Toda Yamamoto Granger causality test.

Findings

The results show that there exists a long-run relationship between terrorism and key macroeconomic indicators. Furthermore, the results suggest that there exists a bi-directional causality between terrorism and inflation. The causality between GDP per capita, unemployment, GDP growth and terrorism is unidirectional.

Originality/value

There is a lack of research work conducted to analyze the long-run relationship and direction of causation between terrorism and various macroeconomic indicators specifically for Pakistan. The current paper fills the gap in the literature by using sophisticated econometric techniques and recent data set to provide the evidence of the relationship between terrorism and various macroeconomic indicators.

Details

International Journal of Social Economics, vol. 41 no. 8
Type: Research Article
ISSN: 0306-8293

Keywords

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