演講者簡介 : Professor Travis Ng received his PhD from the University of Toronto. He is currently an Associate Professor at the Chinese University of Hong Kong. His research interests are Industrial Organization and Applied Economic Theory.
演講摘要 : Why would the U.S. Supreme Court let the parent company get away with its subsidiary's pollution in Bestfoods? Were the justices indifferent to chemical dumps' poisoning of children by contaminating water? Or did they see some hidden unintended consequences? We offer one such unintended consequence to explain their decision. When businesses change hands, holding parents liable for their subsidiaries' liabilities leads to judgment-proof arbitrage - sales of polluting subsidiaries to buyers who can still judgment-proof themselves. Judgment-proof arbitrage defeats the purpose of protecting victims by holding parents liable. Victims are no better off if buyers' capital costs are the same as those of the parents. Victims are worse off if buyers face higher capital costs; in those cases, misallocation of capital results.