Session A - July 16, 1:00-2:15PM

Panel 1 - Room F

Panel 2 - Room D

Panel 3 - Room E

(Daxiao Shi, Fudan University)

(Jinyul Ju, Pusan National University)

Panel 4 - Room C

(Jiefeng Lu, University of International Business and Economics)

Session B - July 17, 1:00-2:15PM

Panel 1 - Room D

(Linjing Wang, Inner Mongolia Agricultural University)

Panel 2 - Room C

(Liang-cong Fan, Zhejiang Univeristy)

Panel 3 - Room E

(Zeng Zhe, Southwest University of Political Science and Law)

Panel 4 (Short Panels Paper) - Room F

(Yuyu Wang, Southwest University of Political Science and Law)

(Charlie Xiao-chuan Weng, Shanghai Jiao Tong University)

Additional Papers


Session A - July 16, 1:00-2:15PM

Panel 1

Tax Dispute Resolution, Judiciary Independence and Property Rights: the Case of China

Yan Xu (, Chinese University of Hong Kong

China does not have a litigious society in which citizens regularly challenge the decisions of administrators in the courts. In this context, the promulgation of the Administrative Litigation Law in 1989 to facilitate individuals’ legal actions against state players has had limited effect on appeals against administrative decisions. In advanced market economies, taxpayers rely on court appeals to protect taxpayer rights and to improve the assessment process by subjecting administrative decisions to external review. The inadequacy of an effective tax dispute resolution system has detracted from the attractiveness of investments in China for both international and domestic investors. This research aims to ascertain why resort to litigation is so rare in China, what factors may affect the outcomes of appeals, and how the limited avenues of appeal impact more generally on China’s economy and society. It will examine the tax dispute resolution legal regime in China over the past decade to determine which factors currently constraining the use of appeals can be addressed to make formal legal remedies more accessible to taxpayers. The availability of an effective judicial appeal system is of growing importance in the new global era in which taxpayers have become more mobile, selective in investment locations and demanding of protection of property rights.

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An Empirical Study on Civil Litigation for Trade Secret Misappropriation in Taiwan from 2004 to 2013

Kuang-Cheng Chen (, Shih Hsin University

This article uses regression analysis to examine the remedies in cases of trade secret misappropriation in Taiwan from 2004 to 2013. The Taiwan Intellectual Property Court was established on July 1, 2008 to achieve uniform, active, and immediate resolution of disputes concerning intellectual property rights. This analysis focuses on remedies for trade secret misappropriations during the four years before and after the Intellectual Property Court was established. The objective of this article is to examine trade secret judgments that were passed during this period in the context of existing variables of law. The central research question is whether the number of trade secret cases correlates to the money amounts of civil damage compensation awards in Taiwanese courts between 2004 and 2013. Based on two different independent variables, the outcomes of our regression analyses indicate that from 2004 to 2008, the number of trade secret cases filed within a given year is statistically significant in relation to whether a given judgment was reached in district courts, high courts, or the supreme court. In addition, the number of trade secret cases awarded civil damages in the year of a given case is also statistically significant to whether the judgment was reached in district courts, high courts, or the supreme court. Thus, the more often that experienced judges presided over a given case in higher courts, the fewer trade secret cases filed, and the fewer awards of civil damages were given between 2004 and 2008. We also find that civil damage compensation awarded in half of these trade secret cases was NT$ 0. As a final note, we found that the number of trade secret cases did not vary, after the establishment of the Intellectual Property Court from 2008 to 2013. These findings show the answer to the research question that the number of trade secret cases does not correlate to the amount of civil damage compensation awarded.

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Panel 2

Towards Multiple Equilibria of Legislation: A Plan to Solve the “Cooperation Deficit” in Legislative Decision-making

Xin Zhang (, Peking University

In China, legislation is sometimes regarded as a political instrument for responding to serious emergencies and a relief channel for general indignation, which leads to “stressful legislation”. For China’s legislature, and many other legislatures, cooperation mechanisms between multiple subjects should be constructed to solve “cooperation deficit” in the legislative decision-making process. This paper consists of three parts. Firstly, the paper constructed the theoretical basis for analyzing legal institutions as a type of public goods and concludes its seven features different from other types of public goods. Secondly, the paper presented a theoretical and empirical analysis of China’s legislative decision-making network and concluded its pros and cons by using theories from political science and law and economics. The paper conducted empirical analysis, including the use of both time series and spatial approaches, on the current multi-subject cooperative game situation in China. Thirdly, based on the macro theory framework of political science, law and economics, the paper builds a set of effective and institutionalized mechanisms to guide the legislature, which is also the planer and decision-maker of the provision of legal institutions, to reach the multiple equilibria of legal institutions demand and supply through three major institutional arrangements.

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The CSRC at 20: Power Centralization and Its Effects on Corporate Finance

Zhaohui Shen (, Tsinghua University

From 1992 to 2012, the Chinese Securities Regulatory Commission (“CSRC”) have emerged from a weak regulatory body to a strong, powerful one, beating the local governments. Although the only two stock exchanges are respectively in the Shanghai and Shenzhen, yet which companies can qualify to go public, raise money from capital markets and list in the stock exchanges are all determined and approved solely and exclusively by the bureaucrats in the CSRC’s Beijing Headquarter. From historical and institutional change perspective, How did this happen? First factor was the SOEs reform and the abandonment of the IPO quota system. Second, the CSRC began to control the two exchanges in 1997. Third, from 2005, the corporatization of the SOEs and private firms need not be permitted by local governments. Fourth, from 2004 to 2007, the CSRC began to bail out the investment banks controlled by local governments and the central bodies controlled half of investment banks which otherwise were controlled by local governments. The centralization of IPO regulation makes the enterprises of different nature of ownership play in fair level; the competitions for IPO and listing among different provinces/regions more sincere and efficient; the CSRC increasing depend upon the investment banks (sponsors) to select which firms going public.

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Panel 3

The Problem of Price-fixing of Ebooks

Daxiao Shi (, Fudan University

The price-?xing of e-books has been a tough problem in the days when the high-tech companies like Apple and Amazon are involved. In China, has sold some ebooks at zero price that was followed by, another well-known online bookseller. This leads some vociferous voices. This paper consists of four parts. Part 1 describes the current focuses on the mechanism of price-?xing of ebooks. Part 2 gives analysis of the purpose and function of Consumer Rights and Interests Protection Law. Part 3 tries to re-examine the problems of the price-fixing of ebooks while discussing the consumer protection issues. Part 4 will give a conclusion.

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Current Issues on the Use of Economics in Korean Antitrust

Jinyul Ju (, Pusan National University

Since the late 1990 the Korean Fair Trade Commission (KFTC) has actively enforced the Monopoly Regulation and Fair Trade Act (MRA). For a long time, commentators and the KFTC believed that the MRA is a self-contained system, isolated from economic analysis. There was a widespread belief that the MRA reflects form-based approach, like German and Japan. Since 2007, however, the Supreme Court has dramatically changed the landscape of antitrust law and policy form form-based to effect-based approach through a number of cases: POSCO v. KFTC (2007), Tbroad v. KFTC (2008), Hanmi Pharmaceutical v. KFTC (2010), Callway Golf v. KFTC (2011), SK Telecom v. KFTC (2011), and BMW dealers v. KFTC (2011).

There is little doubt that the Supreme Court has pursued the consumer welfare and efficiency model rather than the protection of small businesses model. Since last year 2012, however, the Congress and the President of Korea as well have strongly asked the KFTC to protect small businesses through the MRA. The KFTC can use article 23 (1) of the MRA that prohibits unfair trade practices in order to protect small businesses. Indeed, article 23 (1) do not require the KFTC to prove anticompetitive effect. With article 23 (1), the KFTC is able to prohibit efficient conducts that harm small businesses. In regard to article 23 (1), I argue that courts should adopt the efficiency model in order to purse consumer welfare and economic prosperity.

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Panel 4

Regulating Employment Discrimination in China: An Analysis from A Socio-legal Perspective

Jiefeng Lu (, University of International Business and Economics

China is undergoing profound changes in many aspects. Regulating discrimination in its workplace is one of those changes now taking place in China. The prevalence of discrimination in Chinese workplace has been well observed and documented, but the Chinese legal institutions remain ineffective in dealing with discrimination. Researches from legal, social, and philosophical perspectives on discrimination-related subjects, such as the definition of discrimination and its wrongfulness, the nature of anti-discrimination law, etc. are much less sophisticated compared with many of other studies. There are particularly two issues China faces in regulating employment discrimination through its legal institutions. Firstly, the Chinese labor law system, which is largely inherited from its plan-oriented economic system, has revealed its inadequacy in deterring and redressing discrimination. Secondly, Chinese people have difficulties in perceiving discrimination as wrongful and remediable. This paper attempts to address these two issues from a socio-legal perspective.

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Law and Economic Analyses in Eliminating Indirect Sex Discrimination against Women in Workplace

Yanfei Sui (, Renmin University

Women's equal rights to work are provided for by many widely-recognized international conventions and domestic laws of many countries. But women in workplace are still confronted with sex discrimination in many countries and regions of the world which can be divided into two types: direct sex discrimination and indirect sex discrimination. In the first part, the author introduces the concept of indirect sex discrimination, some related concepts and the necessity and significance of eliminating indirect sex discrimination. In the second part, the author introduces anti-indirect sex discrimination law of the European Union. In the third part, the author highlights the concept of “objectively justified factors” in EU law which gives rise to the question: who should be the duty holder and cost bearer of eliminating indirect sex discrimination. In the fourth part, the author shows different answers from categorical moral reasoning, utilitarianism and law and economics study to the above mentioned question. In the fifth part, the author makes tentative law and economic analyses of certain China’s legal issues in the context of anti-indirect sex discrimination law. The author draws a conclusion that a moral perspective should be added into law and economic analyses of eliminating sex discrimination including indirect sex discrimination.

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Session B - July 17, 1:00-2:15PM

Panel 1

Insider Trading Law in East Asia and Enforcement: Japan, China, Hong Kong and Taiwan Visited

Chien-Chung Lin (, National Chiao-Tung University

This article is based on my work in the last past year and collects the latest data of insider trading laws in four jurisdictions in East Asia and their enforcement. Basically, the merit, or true benefit, of insider trading law is still an unsettled issue among academics. However, the evidence from comparative law is far from sufficient to help conclude this dispute. In this article, I examine the data from Japan, China, Taiwan and Hong Kong and analyze the different approaches adopted in forming their insider trading prohibition. Though largely similar in the face, the enforcement of these laws, as well as their procedure, are dramatically different from each other. This article tries to identify the key factors in this differentiation, and explains how cost-benefit analysis, through procedural rules, silently re-shapes the rhetoric and moral argument for insider trading law in this region.

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Retirement Age and Corruption in China

Linjing Wang (, Inner Mongolia Agricultural University

Institutional design is often cited as the major cause of corruption. From the unique observation angle of age, we try to analyze how rational public servants in China calculate the corruption timing in order to maximize the utility. As the mandatory retirement age for most Chinese public servants is 60 with few highest positions at 70, the typical corrupt period falls between 44 years old and 49 when being discovered. The older public officials start being corrupt, the larger illegal income they could get, when controlling the length of being corrupt and other variables. Meanwhile the inconsistent severity of punishment diminishes the effect of the anti-corruption measures.

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Panel 2

Coping with Environmental Risks: Development of a Market for Environmental Liability Insurance in China

Dongmei Chen (, Fudan University

With 30 years' high-speed growth and development, China has surprised the whole world with fascinating progress in its economy. However, one of the downsides of this remarkable development is serious environmental pollution throughout the country. Air quality in most Chinese cities is increasingly contaminated by coal-burning power plants, construction debris, and automobile exhaust from millions of cars packing the roads. Studies suggest that over half of all river sections monitored for water quality are unsafe for human contact (Wang et al., 2008). Most of China’s rural areas have no system in place to treat waste water. Although China has some of the strictest environmental protection laws in the world, they are not enforced adequately, especially in rural areas. In this project, we evaluate the regulation requiring Chinese manufacturers to purchase environmental liability insurance. Specifically, we explore the implications of establishing a market for environmental liability insurance that is suitable for China's situation, with the function of reducing pollution, punishing the polluters and compensating the victims. The inherent objective of such a system is to reduce the financial burden on the Chinese government of dealing with environmental issues, i.e., abatement and clean up costs. We draw experiences and lessons from U.S. environmental regulations and the U.S. environmental liability insurance market as they have developed to address these issues in the U.S.

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The Demand of the Third Party Punishment

Liang-cong Fan (, Zhejiang Univeristy

Third party punishment is regarded as an essential to the maintenance of social norms. We examine the economic logic underlined third party punishment in a Dictator Game within a real effort context in which dictators(first parties) distribute the outputs of both first parties and second parties. The question is whether the demand of third party punishment obey the Law of Demand. We change the cost of punishment faced by third parties after dictators make their distribution decisions in a series of experiments. The results show third parties are willing to use the costly punishment opportunities. Besides, the level of punishment, on the one hand, is significantly negatively related to the level of price as if punishment is an ordinary good, and on the other hand, is also determined by the extent to which the dictator’s distribution of outputs to himself/herself exceeds his/her own output. We confirm the generality of such relationships by inducing believes of second party on whether third party will punish dictator in a given price level or not. These results show that, there are two different kinds of motivation behind third party punishment, including economic motivation and non-economic motivation. This suggests that we should consider them both when we construct the behavioral models of punishment decision.

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Panel 3

Brief Introduction to China's Sustainable Urbanization under Constitutionalism

Zeng Zhe (, Southwest University of Political Science and Law

The developmental practices in many countries have proven that under the premise of sustainable development, a country’s status and strength in the international society can be largely embodied in its international status and international strength. An international metropolis with its ability to attract the global resources and its powerful allocation capability and radiation capability can bring tremendous driving force and win more opportunities, and hence assist its country in getting the strategically key position in certain international affairs. City is the leader and guider of economic development in the area ,while the urban development has strong driving and radiative effect. It is inevitable that the study of urbanization in the framework of Constitutionalism should include the study of China’s cities. Therefore, city construction and urbanization development should be integrated into the framework of globalized collaboration, only under the premise of the rule of law and under the photosynthesis of the spirits of “putting people first ” and the scientific outlook on development can city and urbanization development become more reasonable and more scientific, gain more essence from constitutionalism and modern civilization, and reach the sustainable level.

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Three Inquiries about Creation: Interpretation and Construction on Copyright Law

Wengcong Xiong (, Minzu University of China

In copyright law, originality is a fundamental concept including two elements: independent creation and some degree of creativity. Comparing independent creation, creativity is a more obscure element, courts adopted different doctrines to measure it: from aesthetic value of work theory, intent and mind of author theory, process and tool of production theory to trivial/distinguishable variation dichotomy. Based on linguistics and cognitive science, trivial/distinguishable variation dichotomy can be more objective and appropriate, but can’t provide an accurate standard, which leaves room for the discretion of judges. It is clear that copyright law or even the whole intellectual property regulations focus closely on the three themes of “creation”: what is creation, why should we protect creation and how to better stimulate creation? These questions depend not only on factual analysis and scientific argument but also on humane ethic orientation and emotional preference. The history of human civilization witnessed that imitation is the prerequisite of creation. Legislators try to seek a balance between imitation and creation, for keeping step with the consumer psychology and market demand. From the perspective of law and economics, in fact, there are models of commons, sponsorship and privatization etc. to protect and stimulate creation to a large extent which dominate or replace each other with the changing of population and degree of complexity. Copyright law is inclusive of commons, sponsorship and private property and other institutions protecting and fostering creation. It reflects the general law of economy: with the change of numbers and complexity, different constitutions will alternate unconsciously.

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Panel 4 (Short Papers Panel)

On the Accuracy of Legal Enforcement: An Analysis Framework by Louis Kaplow's Balancing Model of Procedural Justice.

Darcy Deng (, Southwest University of Political Science and Law

By studing the American welfare economist and jurist Louis Kaplow's ideas about the balanced program and following the welfare economics and information economics points of view and it will follow the Coase theorem especially on the cost of system, and then the research focus on the accuracy of the law and its application in the context of Chinese law.The accuracy of the law should be seriously analyzed. We should try to explore the path about the rule of law by paying close attention to the responsibility of the practical rule of law.

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The Improbabilities of Criminal Procedure: Can Torture Be Effectively Abolished in China?

Rongjie Lan (, Zhejiang Univeristy

China has been investing significant efforts to tackle torture in its criminal justice system, particularly at the police investigation stage. Continuous institutional changes, comprehensive personnel trainings, and technical advancements are major measures taken to constrain police brutality and cruelty, but none has been satisfactorily effective. This article argues from historical and empirical perspectives, that due to certain indispensible components of the human nature, including sympathy, empathy, shame and expectation of future interaction, torture can be gradually reduced in criminal investigation, but nevertheless will widely remain in existence, and further progress requires not only state ambition and institutional designs, but more importantly, the advancement of information exchange and economic foundation.

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Merchants, Law and the Social Transition of China: From 1840 to 2010 (Book Proposal)

Yuyu Wang (, Southwest University of Political Science and Law

This book addresses the role of merchant, law(especially merchant law) and their interactions in the development of China's Social Transition from 1840 to 2010. Merchants and merchant law, as viewed by numerous historical, economics and legal researches, are the pioneers, engines and primary contributors to western countries' modern social transitions.Companying with the merchant's triumph to political powers, merchant's logics & norms dominating the operations of the real economy, western countries has risen. Is this the same in China? How about the past, the present and the future of merchant and merchant law in China? What's their Chinese characteristics? Are they positive to the “China Enigma”? Unlike most of other related researches concerned China's law and development1, this book inquiries merchant&merchant law in China's long historical transition processes to discover the intrinsic&essencial relationship among merchants, merchants law and China modern social transition.

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Enforcing with Principles? A Case Study on Chinese Insider Trading Prohibition

Charlie Xiao-chuan Weng (, Shanghai Jiao Tong University

Economic and legal academics have disputed on the issue on the reasons of prohibiting insider trading for several decades. However, major jurisdictions in the world take insider trading as a securities violation and promulgated regulations in order to rein insider trading. The difference between insider trading prohibition enforcement of these jurisdictions is the tension in enforcing it. China launched her capital market and enacted insider trading prohibition policy two decades ago. Although legislature and market regulator has modified the prohibition regulation several times, the regulation is vague and elusive. Under the condition that there is no further official explanation on enforcement of the broad-brushed regulation, an administrative sanction case study on insider trading prohibition is an extremely helpful way to understand the market regulator’s enforcement policy.

The United States has an extended and effective insider trading enforcement history, which is recognized by peers. Employing the insider trading theories, such as classical and misappropriation theories that provide theoretical underpinnings for liabilities of insider trading cases, developed in the United States in analyzing and categorizing the enforcement cases in China is an efficient and direct methodology to find out the enforcement policy. Based on the case study findings, the article provides a summary of Chinese insider trading prohibition elements in practice, which is critical to further Chinese insider trading legislation research and professionals to predict the legality of their conducts in daily securities transaction.

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Additional Papers

What Do Chinese Judges Maximize? Economic Analysis of Law in Empirical and Comparative Perspectives

Jiahui Ai (, Nanjing University

Under the constraints of various existing formal and informal judicial management systems, this paper discusses the preferences of Chinese judges, and proposes a preliminary Chinese judicial utility function. By comparing the differences of unity functions between Chinese and American judges, it makes further studies on the sources of humanity and information behind the judicial management system. According to the theory, “the level of working specificity is inversely proportional to the importance of personnel selection system, and is proportional to the importance of ex-post supervision and management system”, different from the Anglo-American system which emphasizes ex-ante selection and looses ex-post supervision, the Chinese institutional structure ignores ex-ante selection but stresses on ex-post administrative supervision, bringing up a group of judges who maximize income and official position. Therefore, the ideas of Chinese judicial management system should be changed.

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