Asset freezing, corporate political resources and the Tullock paradox

In 1967, Gordon Tullock asked why firms do not spend more on campaign contributions, despite the large rents that could be generated from political activities. We suggest in this paper that part of the puzzle could come from the fact that one important type of political activity has been neglected by the literature which focuses on campaign contributions or political connections. We call this neglected activity "asset freezing": situations in which firms delay lay-offs or invest in specific technologies to support local politicians' re-election objectives. In doing so, firms bear a potentially significant cost as they do not use a portion of their economic assets in the most efficient or productive way. The purpose of this paper is to provide a first theoretical exploration of this phenomenon. Building on the literature on corporate political resources, we argue that a firm's economic assets can be evaluated based on their degree of "political freezability," which depends on the flexibility of their use and on their value for policy-makers. We then develop a simple model in which financial contributions and freezing assets are alternative options for a firm willing to lawfully influence public policy-making, and derive some of our initial hypotheses more formally

The political economy of international regulatory convergence in public utilities

To what extent should public utilities regulation be expected to converge across countries? When it occurs, will it generate good outcomes? Building on the core proposition of the New Institutional Economics that similar regulations generate different outcomes depending on their fit with the underlying domestic institutions, we develop a simple model and explore its implications by examining the diffusion of local loop unbundling (LLU) regulations. We argue that: one should expect some convergence in public utility regulation but with still a significant degree of local experimentation; this process will have very different impacts of regulation

International Expansion, Diversification and Regulated Firm Nonmarket Strategy

Previous studies have shown that regulated firms diversify for reasons that are different than for unregulated firms. We explore some of these differences by providing a theoretical model that starts by considering the firm-regulator relationship as an incomplete information issue, in which a regulated incumbent has knowledge that the regulator does not have, but the firm cannot convey hard information about this knowledge. The incumbent faces both market and nonmarket competition from a new entrant. In that context, we show that when the firm faces tough nonmarket competition domestically, going abroad can create a mechanism that makes information transmission to the regulator more credible. International expansion can thus be a way to solve domestic nonmarket issues in addition to being a catalyst for growth

International expansion, diversification and regulated firms' nonmarket strategy

Previous studies have shown that regulated firms tend to diversify for different reasons than unregulated ones. This is the case for product but also for geographical diversification, i.e. international expansion. The logic generally advanced is that regulated firms tend to diversify when they face costly and difficult relationships with the regulatory authority in charge of their sector. This approach, however, does not explain (1) what is really at the core of the problem in regulated firms' relationships with regulators, (2) why these firms cannot overcome part of the problem by developing nonmarket strategies -lobbying, campaign contributions, etc.- to influence regulatory decisions, and (3) why they sometimes opt for international expansion rather than product diversification. In this paper, we propose a theoretical model that provides potential answers to these questions. We start by considering the firm-regulator relationship as an incomplete information problem, in which the firms know things that the regulator does not, but can cannot convey hard information about these things. In this setting, we show that when firms face tough nonmarket competition domestically, going abroad can create a mechanism that makes information transmission credible and therefore strengthen their position in their home market. International expansion, in consequence, can be a way to solve some of the problems that regulated firms face at home in addition to a way for these firms to grow their business abroad

Serological survey of hepatitis B immunity in healthcare workers in Catalonia (Spain)

Healthcare workers (HCW) are exposed to preventable infectious diseases, notably hepatitis B (HB). The aim of this study was to determine the immunity of HCW against hepatitis B. We made a seroprevalence study using a self-administered survey and obtained blood samples. Antibodies against the HB surface antigen (anti-HBs) and against the HB core antigen (anti-HBc) were studied. The odds ratio (OR) and 95% confidence intervals (CI) were calculated. The adjusted OR were calculated using logistic regression. Of the 644 HCW who participated (29.7% physicians, 38.7% nurses, 13.4% other clinical workers and 18.3% non-clinical workers), 46.4% were primary care workers and 53.6% hospital workers. The overall prevalence of anti-HBs was 64.4%. HCW aged 44 y with respect to those aged 25–34 y. 75.6% of HCW stated they were vaccinated, but only 39.3% had a vaccination card. In HCW who stated they were unvaccinated, 10.8% had a vaccinated serological pattern (anti-HBc-negative and anti-HBs -positive). Written, updated vaccination records are essential to reliably determine the vaccination status