Regulation and corporate corruption: new evidence from the telecom sector

This paper examines how government regulation in developing countries affects the form of corruption between business customers and service providers in the telecom sector. We match the World Bank enterprise-level data on bribes with a unique cross-country telecom regulation dataset collected by Wallsten et al. (2004), finding that 1) strong regulatory substance (the content of regulation) and regulatory governance reduce corruption; 2) competition and privatization reduces corruption; 3) the effects of regulatory substance on corruption control are stronger in countries with state-owned or partially state-owned telecoms, greater competition, and higher telecommunication fees; and 4) bureaucratic quality exert substitution effects to regulatory substance in deterring corruption. Overall, our results suggest that regulatory strategies that reduce information asymmetry and increase accountability tend to reduce illegal side-payments for connections.Telecommunications; Regulation; Corruption

Lending Corruption and Bank Loan Contracting: Cross-Country Evidence

Lending corruption is an important agency problem for banks. Using data from the World Bank Business Environmental Survey, we find that in countries with more corruption, banks give more favorable loan terms to borrowers. This relation is stronger when firms are under more financing constraints, consistent with corruption being important to obtaining favorable loan terms when the supply of debt capital is tighter. In line with the expectation that monitoring constrains agency problems, this relation is weaker in countries with higher foreign ownership of banks or where Protestantism is the primary religion. In the syndicated loan market, participant banks are inclined to lend less in countries where lending corruption is more prevalent. Firms in countries with greater corruption prefer private bank debt over public bonds and are more leveraged. Banks in countries with more lending corruption have poor loan quality, worse earnings performance, and are more susceptible to trouble during a financial crisis. Overall, our findings suggest that corruption greases the wheels for borrowers but is detrimental to bank shareholders

Universal service subsidies and cost overstatement: Evidence from the U.S. telecommunications sector

Abstract Utility subsidies are often defended as promoting universal service. However, specific support formulas may be poorly targeted and/or designed. The U.S. high cost loop support (HCLS) program (formerly referred to as the Universal Service Fund (USF)), has been a key component of the FCC's USF program. With proposed initiatives for universal access to broadband, it is useful to critically evaluate how the HCLS creates a moral hazard problem. This study finds that companies receiving HCLS subsidies have an incentive to report high costs to the FCC in order to qualify for still higher support payments. Using data from 1,136 rural telecom firms in 50 states (1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002), this study shows that some companies respond to current incentives by overstating costs (or incurring higher costs) as they approach the subsidy cutoff points. Compared to the no-subsidy group, companies at the point of greatest subsidy jump appear to overstate costs more due to larger marginal benefits. Such perverse incentives need to be recognized in future universal service initiatives

Nondestructive measurement of water content and moisture migration of unsaturated red clays in South China

To reveal the moisture migration mechanism of the unsaturated red clays, which are sensitive to water content change and widely distributed in South China, and then rationally use them as a filling material for highway embankments, a method to measure the water content of red clay cylinders using X-ray computed tomography (CT) was proposed and verified. Then, studies on the moisture migrations in the red clays under the rainfall and ground water level were performed at different degrees of compaction. The results show that the relationship between dry density, water content, and CT value determined from X-ray CT tests can be used to nondestructively measure the water content of red clay cylinders at different migration time, which avoids the error reduced by the sample-to-sample variation. The rainfall, ground water level, and degree of compaction are factors that can significantly affect the moisture migration distance and migration rate. Some techniques, such as lowering groundwater table and increasing degree of compaction of the red clays, can be used to prevent or delay the moisture migration in highway embankments filled with red clays

Technical performance comparison of horizontal and vertical ground-source heat pump systems

The configurations of ground heat exchangers (GHEs) play a significant role in the efficiency and sustainability of ground-source heat pump (GSHP) systems. However, there is a knowledge gap in understanding the performance differences between the horizontal and vertical GSHP systems in the same project under various heating and cooling demands. In this study, a technical performance comparison between GSHP systems coupled with horizontal ground loops and vertical boreholes under three scenarios of heating-to-cooling ratios (6 : 1, 2.4 : 1, and 1 : 1) was conducted. The simulations were based on a coupled thermal–hydraulic model for unsaturated soils that takes into account realistic ground surface boundary, GHE boundary, and the dynamics of heat pump efficiency. The GHEs were designed based on an experimental site located on the campus of a UK university. Results showed significant differences in the development of fluid temperatures and coefficient of performance (COP) of heat pumps between the horizontal and vertical GSHP systems due to the differences in the soil profiles and temperature boundaries. Both the fluid temperatures and heat pump COPs in the horizontal GSHP system reached a steady annual cycle after 2 years regardless of the heating-to-cooling ratios. For the vertical system, a general downward trend in the fluid temperatures and the COP of the heat pump in the heating mode can be found when a heating-to-cooling ratio was 6 : 1 or 2.4 : 1, while an overall upward trend in the fluid temperatures and the COP of the heat pump in the heating mode can be noted in the case of 1 : 1 heating-to-cooling ratio. Additionally, the heat pump operating in the cooling mode was off most of the time when a heating-to-cooling ratio was 6 : 1 or 2.4 : 1, while a declining trend in the COP of the heat pump in the cooling mode was exhibited in the case of a heating-to-cooling ratio of 1 : 1. The technical comparison reveals that the heating-to-cooling ratios would significantly affect the efficiency and sustainability of both GSHP systems