Forskningsprojekter
This page provides links to brief summaries of ongoing and recently completed projects in the following areas:
- Contract and tort law and economics
- Corporate law and organization
- Financial services regulation and the global financial architecture
- Intellectual property rights (plans for a separate center are underway)
- EU institutions and constitutional law
- General law and economics.
An economic analysis of human rights
Caspar Rose is currently working on a working paper entitled "An economic analysis of human rights", which is expected to be completed in the near future: His research focuses on law and economics as well as corporate governance/company law where he combines a traditional legal approach with quantitative methods from applied game theory and statistics. In particular, he intends to explore how chnages in the law impact people's incentives and behavior. This often entails a comparative legal analysis in order to determine the efficiency of various rules.
Institutional Foundations for Market Discipline in Banking
LEFIC participants: Clas Wihlborg and Jens Forssbaeck (PhD project)
Other participants: A. Penny Angkinand, University of Illinois
The objective of this project is to analyze how specific legal and regulatory measures enhance market discipline in banking and thereby affect the likelihood of banking crises. In one part of the project the focus lies on explicit and implicit guarantees of banks' creditors as well as on distress resolution and insolvency procedures for banks. The main hypotheses for empirical analyses of banking crises across the globe are:
- Market discipline can be enhanced by deposit insurance schemes that are partial in their coverage.
- The deposit insurance coveage that maximizes market discipline and reduces the likelihood of banking crises to a minimum can be reduced by implementation of explicit rule-based distress resolution and insolvency procedures for banks.
A second part of the project focuses on the role of markets for banks' subordinated debt and equite as devices to enhance market discipline. The analysis focuses on banks' risk-taking behavior. In particular, the linkages between risk-taking behavior and yields in markets for subordinated bank debat are analyzed. Institutional factors that may enhance the credibility of no bail-outs of holders of securities are also studied.
The Organization and Supervision of Cross-border Banking
LEFIC particpant: Clas Wihlborg
Other participants: Richard J. Sweeney, Georgetown university, Lary Goldberg, University of Miami (before his passing away on March 11, 2005).
This project was inspired by the emergence of Nordea as a bank with a strong presence in four Nordic countries, and a strategy aiming at integrating the organization functionally across the four countries. The conventional approach to cross-border banking has been to work iwth subsidiaries in host countries. The project has two parts:
- The performance of banks in the Nordic countries are compared with the objective of analyzing whether economies of scale and scope can be exploited in an organization that is functionally integrated across countries.
- The challenges for regulators and supervisors of integrated cross-border banks are analyzed. In partiuclar, appoaches to supervision of banks with important host country activities in branches are analyzed. Sources of conflicts of interest between home- and host-country supervisors are studied. If the vision of the EU's second banking directive aiming at home-country control of banks across the EU, home country deposit insurance, and mutual recognition, is to be realized, home country supervisors must have the trust of the host countries. Institutional factors that may enhance this trust are analyzed.
The ability of contract disclosure rules to alleviate market failures
Caspar Rose is currently working on a working paper entitled "The ability of contract disclosure rules to alleviate market failures."
Investor protection and corporate governance revisited
Caspar Rose is currently working on a working paper entitled "Investor protection and corporate governance revisited".
Co-determination and corporate governance.
Caspar Rose is currently working on a working paper entitled "Co-determination and corporate governance".
The Law and Economics of the Consumer Sales Law
Henrik Lando and Peter Møgelvang Hansen
In a joint project building on our recent book ("Nye regler om forbrugerkøb - en empirisk undersøgelse", see publications) we investigate recent changes in Danish Consumer laws. Three legal rules are the object of attention:
- the rule that cuts of consumers’ claims against the seller/producer after two years,
- the rule that governs the consumers remedies for defective products (repair and replacement of the product),
- and the rule governing the burden of proof when a consumer claims a product is defective (and was so at the time of purchase).
In investigating these rules we are motivated by three considerations:
First, the rules have been and remain the subject of much controversy. Some claim that the changes have been detrimental to social welfare overall and more specifically to the functioning of sub-markets, e.g. the market for used cars. Thus, in the opinion of some, the new legislation, which stems from a EU-directive, constitutes inefficient and overly centralized legal harmonization within the EU. Whether this is in fact so is explored using economic criteria of efficiency.
Second, a basic issue in legal scholarship and in law and economics is the extent to which legal rules affect actual behaviour. Some have claimed that norms of behaviour play a larger role in shaping behaviour than do legal rules that are often difficult to enforce. This issue is very pertinent in the area of contract law where costs of enforcement are often large in relation to the possible gain obtained through legal enforcement. However, this issue is little explored both within legal scholarship and within law and economics; we know relatively little about how great an impact contract law has on actual behaviour. This question was part of the motivation behind our empirical investigation of the impact of the implementation of the EU directive, and we continue investigating this question on the background of our empirical findings.
Third, the empirical findings may be used to highlight some deeper issues in legal theory and in law and economics. These deeper issues may be described as follows:
- On the issue of limitation periods (the time during which a consumer may raise claims), there is no really satisfactory theory of why such time limits exist at all. The basic question is this: if some years after purchase a consumer can prove that the product was defective when he bought it, why should he or she not, irrespective of the number of years passed, be able to claim remedies? To this question there is no fully convincing answer in the literature; we attempt an answer in a recent working paper, and we wish to explore this idea further.
- The issue of remedies for defective products, e.g .whether a consumer has the right to have a new product or must accept that the old is repaired, falls into the legal and the law and economics literature on `efficient remedies for breach of contract´. Using the theoretical apparatus from this literature, we hope to be able to contribute to the question of which remedies are socially optimal in the context of consumer sales.
- The issue of what constitutes a socially efficient (or reasonable) allocation of the burden of proof has received some but very little attention in the literature, and so has the specific issue of the role of presumptions. In the new law, the rule is that the presumption is with the consumer for the first six months while for the next 18 months the burden of proof lies the consumer with no presumption in his or her favour. The issue we intend to analyze both empirically and theoretically is this: what is the role of such presumptions for the outcome of claims (and what is the implication in terms of social welfare?).
Efficiency and Value Effects of Accounting and Auditing Rules
Clas Wihlborg in cooperation with researchers at the University of Rome, Tor Vergata, the University of Göteborg, and the India Development Foundation:
New EU-wide accounting standards are being implemented and the Sarbanes-Oxley Act in the USA sets new standards for auditing after recent scandals in the USA and Europe. In one part of the project, auditing standards in a number of countries are compared across countries and over time. The impact on corporate performance is analyzed. In another part of the project, objective of accounting rules in different legal and financial systems are analyzed theoretically and empirically.
Sidst opdateret af Jacob Sandholt 09.10.2006
