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George S. Georgiev

Other affiliations: Yale University
Bio: George S. Georgiev is an academic researcher from Emory University. The author has contributed to research in topics: Foreign direct investment & Sovereign wealth fund. The author has an hindex of 5, co-authored 7 publications receiving 57 citations. Previous affiliations of George S. Georgiev include Yale University.

Papers
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TL;DR: In this paper, the authors analyze the impact of U.S.-style antitrust settlement procedures in EU law, which occurred in 2004 as part of an ambitious antitrust modernization program, and demonstrate that when compared to the standard case resolution procedures, settlements are more attractive both to the antitrust authority and to companies under investigation.
Abstract: This Article analyzes the impact of the introduction of U.S.-style antitrust settlement procedures in EU law, which occurred in 2004 as part of an ambitious antitrust modernization program. After documenting the absence of a settlement tradition in EU law and the legal systems of individual EU member states, I argue that the new procedures were inspired by and transplanted from U.S. law, and that this was done without sufficient tailoring. Drawing on lessons from the longstanding U.S. experience with antitrust settlements and on emerging evidence about the EU's own approach since 2004, I analyze the effects of the new settlement procedures within three interconnected sub-systems of antitrust enforcement: at the EU level, at the member-state level, and at the level of U.S.-EU antitrust cooperation. I demonstrate that when compared to the standard case resolution procedures, settlements are more attractive both to the antitrust authority and to companies under investigation. The resulting reliance on settlements is likely to lead to distortions in enforcement incentives and a reduction in the degree of legal certainty and accountability within the EU antitrust system, which, in turn, threatens to shift the system towards further bureaucratization and interfere with many of the original goals of the antitrust modernization program. I conclude by suggesting that the EU should revisit those goals and assess whether the U.S. cost/benefit calculus for antitrust settlements is compatible with the EU's own legal regime and societal preferences. The immediate theoretical and practical insights of the Article relate primarily to EU antitrust law; viewed more broadly and from the vantage point of comparative administrative law, the Article also represents a detailed case study of the negative effects stemming from the untailored transplantation of legal rules and regulatory approaches across dissimilar legal systems.

19 citations

Posted Content
TL;DR: In this paper, the authors argue that the securities disclosure regime contains previously unexamined structural deficiencies, which pertain to the information provided by the largest public companies, and they identify two sets of potential harms.
Abstract: This Article argues that the securities disclosure regime contains previously unexamined structural deficiencies, which pertain to the information provided by the largest public companies. These deficiencies arise from the operation of the materiality standard, a core element of the disclosure regime that is used in a number of disclosure rules. The materiality standard is designed to limit firms’ disclosure to information that would be of importance to investors, and to prevent the overproduction of information. I argue, however, that in the case of large firms the materiality standard can also lead to the underproduction of information — or to “materiality blindspots.” Since the threshold for what is material increases as firms get bigger, at the very largest firms even matters that are significant or sizeable in absolute terms may be deemed immaterial and remain undisclosed. Such firms are “too big to disclose” and, in a perfectly legal manner, take advantage of the materiality standard to avoid disclosure.I illustrate the materiality blindspots phenomenon by analyzing the disclosure rules in three key areas (material contracts, material legal proceedings, and material business spending) and presenting original case studies of the disclosure practices of large firms. After revisiting accepted theory on disclosure regulation through the prism of firm size and analyzing examples from the case studies, I identify two sets of potential harms. First, materiality blindspots may undermine investor protection and corporate governance, including by diminishing stock price accuracy and making inside and outside monitoring for fraud, waste, or suboptimal management practices more difficult. Second, the materiality standard may give systematic advantages to large firms and lead to market distortions, in effect serving as a regulatory subsidy for bigness. I suggest that certain disclosure requirements that currently rely only on the materiality standard should be supplemented with targeted rules employing quantitative thresholds. This could provide a safety net against materiality blindspots by requiring large firms to disclose additional information that is not caught by the existing materiality standard, but that is significant or sizeable in absolute terms.

11 citations

Posted Content
TL;DR: The most important changes to the Exon-Florio CFIUS framework introduced by the National Security Act of 2007 and evaluated the extent to which the updated legislation struck a reasonable balance between national security concerns and promoting the inflow of foreign capital in the United States.
Abstract: This short Comment describes the most important changes to the Exon-Florio CFIUS framework introduced by the National Security Act of 2007 and evaluates the extent to which the updated legislation strikes a reasonable balance between national security concerns and promoting the inflow of foreign capital in the United States The Comment provides a brief overview of the history of the Committee on Foreign Investments in the United States (CFIUS) and discusses the key criticisms that have been levied against the CFIUS review process The recent amendments to the CFIUS framework are analyzed in light of several emerging realities in the markets for investment and regulation, including the increased visibility of sovereign wealth funds and the greater interplay between the regulatory frameworks of developed countries seeking to attract foreign investment

11 citations

Journal ArticleDOI
TL;DR: In this paper, the authors investigated the relationship between macroeconomic fundamentals and net capital inflows in the US and found that relative output growth is uncorrelated with net US investment for all regions.
Abstract: Our paper investigates how macroeconomic fundamentals correlate with net capital inflows in the US. Understanding the factors associated with capital flows helps policy makers to predict future capital flows and analyse the international implications of domestic macroeconomic policy. Yet the theoretical relationship between net capital inflows and relative economic conditions is ambiguous. Using quarterly data from 1988 to 2003, we analyse the relation between a set of relative macroeconomic variables and net purchases of US stocks and bonds from Western Europe, Canada, Japan and Australia. We find that relative output growth is uncorrelated with net US investment for all regions. However, other macroeconomic factors matter; for example, an increase in US interest rates relative to European interest rates is associated with an increase in net portfolio investment from Europe. The linkages between macroeconomic factors and net foreign investment in the US are strongest for Western Europe, implying that information costs, home bias and other capital frictions are less relevant for US–Europe flows compared with capital flows between the US and the other three source regions. Lastly, stock purchases are more correlated with macroeconomic fundamentals than bonds, a striking finding suggesting that equity traders are more likely than bond traders to change their net asset holdings as a result of a macroeconomic event.

7 citations

Journal Article
TL;DR: The most important changes to the Exon-Florio CFIUS framework introduced by the National Security Act of 2007 and evaluated the extent to which the updated legislation struck a reasonable balance between national security concerns and promoting the inflow of foreign capital in the United States as discussed by the authors.
Abstract: This short Comment describes the most important changes to the Exon-Florio CFIUS framework introduced by the National Security Act of 2007 and evaluates the extent to which the updated legislation strikes a reasonable balance between national security concerns and promoting the inflow of foreign capital in the United States. The Comment provides a brief overview of the history of the Committee on Foreign Investments in the United States (CFIUS) and discusses the key criticisms that have been levied against the CFIUS review process. The recent amendments to the CFIUS framework are analyzed in light of several emerging realities in the markets for investment and regulation, including the increased visibility of sovereign wealth funds and the greater interplay between the regulatory frameworks of developed countries seeking to attract foreign investment.

5 citations


Cited by
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TL;DR: The employment indexes of the Bureau of Labor Statistics show that a group of large industries producing such commodities as beverages, butter, meat and meat products, wirework, explosives, chemicals, soap, and rubber goods (other than tires and shoes) were in November employing numbers of laborers that ranged from 2.7 to 36.6 per cent in excess of the number employed in the basic year (I926) used in constructing the index as mentioned in this paper.
Abstract: SOME months ago it became apparent that important basic industries were lagging behind in the process of economic recovery which seemed to be under way in the United States. Throughout the entire depression trade has been slackest and unemployment greatest in industries producing durable goods. This has occurred in spite of the efforts of our governments, federal and local, to carry through ambitious programs of public works; and it becomes very striking when the low level of production in these industries and others largely dependent upon them is compared with the levels recently obtaining in industries that produce goods of a relatively perishable character. The employment indexes of the Bureau of Labor Statistics show that a group of large industries producing such commodities as beverages, butter, meat and meat products, wirework, explosives, chemicals, soap, and rubber goods (other than tires and shoes) were in November employing numbers of laborers that ranged from 2.7 to 36.6 per cent in excess of the number employed in the basic year (I926) used in constructing the index. In exceptional cases, where for special reasons there exists a very strong upward trend, much higher increases are recorded, ranging from 69.3 to I89.I per cent. But, when one turns to industries producing durable goods such ,as cast-iron pipe, steam fittings and heating apparatus, structural metal, agricultural implements, railroad cars, locomotives, lumber, brick, tile, cement, and stone, the number of people employed last November ranged from 20.2 to 50.0 per cent of the number employed in the base year I926. Equally startling is the record of industrial production shown by the Federal Reserve Board's index which, unlike the employment data just used, is adjusted for seasonal variation. Production of consumption goods such as textiles, shoes and leather, rubber tires, food products, paper and printing, tobacco, and petroleum products ranged last October or November1 from 89 to I52 per cent of the production in the base years (I923-25). At the same time production of iron ore, lumber, automobiles, cement, iron and steel, lead, and zinc, ranged from 23 to 72 per cent of average production in the years chosen as a base. It is too clear for all doubt or cavil that, in considering what should be done with the Securities Act, we must take into account the fact that industries producing either durable consumers' goods the marketing of which requires the use of consumers' credit, or capital goods the sale of which depends upon the ability of industries to finance their capital requirements, will be seriously affected by any measure that restricts the flow of capital into industrial enterprise. The unfavorable showing of this important group of industries is one of the discouraging factors in an economic situation which upon the whole shows decided improvement. No single cause accounts for it. Provisions in some of the codes, by which restrictions are placed upon the introduction of new machinery or effort is made to restrict excessive production, cannot but react unfavorably upon certain basic industries. Debasement of our currency, beside impairing general confidence, makes it difficult to look very far ahead, and so injures the construction industry and others dependent upon it. Finally the Securities Act of I933 interferes seriously with the flow of capital into industries that require financing upon any substantial scale. The Act is not the only reason for the extremely small volume of financing in I933, but it reacts unfavorably upon the very industries that now lag behind the general economic recovery. The need of federal regulation of security issues is patent, and the general procedure prescribed by the Act seems appropriate and effective. The difficulty is that some of its provisions impose liabilities that issuing houses and security dealers would be foolish to assume. In investing one's own funds it is impossible to avoid mistakes, and the same is true with the business of buying securities for sale to others. The facts presented in any prospectus or oral communication are frequently of a sort that does not admit of exact determination but must depend upon someone's judgment which, with the best of intentions, may turn out to be bad. To sustain the burden of proof that he did not know, and in the exercise of reasonable care could 1 In some cases November figures are not yet available.

38 citations

Posted Content
TL;DR: In this article, the authors studied portfolio investment decisions of German banks in 30 emerging capital markets using monthly data from 2002 to 2007, using a dynamic Time-Series Cross-Section framework and the micro database External Position Report provided by Deutsche Bundesbank, which covers German banks assets and liability positions vis-a-vis foreign countries.
Abstract: After decades of steady liberalisation and financial market development, emerging capital markets experienced unparalleled capital inflows in the aftermath of the emerging markets crisis in the 1990s. This paper studies portfolio investment decisions of German banks in 30 emerging capital markets using monthly data from 2002 to 2007. The use of a dynamic Time-Series Cross-Section framework and the micro database External Position Report provided by Deutsche Bundesbank, which covers German banks assets and liability positions vis-a-vis foreign countries, allows insights into the various determinants: indicators of financial market development, the portfolio-calculus of investors, investor-specific characteristics, as well as the macroeconomic environment. There is evidence for German banks taking into account the various dimensions of financial market development in their portfolio investment decisions and anticipating the special risks inherent in emerging markets. The implication for policymakers would be to foster financial market development in order to attract and sustain international portfolio investors. However, there is additional evidence for the investor's domestic market environment and global risk aversion exerting a significant influence in times of financial turmoil.

28 citations

Journal ArticleDOI
TL;DR: The authors argues that the rise of algorithmic trading profoundly challenges the foundation on which much of today's securities regulation framework rests: the understanding that securities prices objectively reflect available information in the market.
Abstract: This Article argues that the rise of algorithmic trading profoundly challenges the foundation on which much of today’s securities regulation framework rests: the understanding that securities’ prices objectively reflect available information in the market. The Efficient Capital Markets Hypothesis (ECMH) has long provided the theoretical touchstone undergirding central pillars of securities regulation. Mandatory disclosure, evidentiary presumptions in anti-fraud litigation and regulation driving the design of modern exchanges all look to the ECMH for theoretical validation. It is easy to understand why. Laws that make markets better at interpreting information can also improve their ability to allocate capital across the real economy.Theory and regulation have failed to keep pace with markets where traders rely on pre-programmed algorithms to execute trades. This Article makes two claims. First, complex algorithms foster a separation between the trader and her ability to fully control the operation of the algorithm. Algorithms can execute many thousands of trades in milliseconds, crunching vast quantities of data and dynamically interacting with other traders in the process. This intelligence makes it difficult for a trader to fully predict how an algorithm might behave ex ante and near-impossible for her to track and control its activities in real-time. Secondly, though markets have traditionally relied on informed fundamental traders to decode complexity, these actors now possess reduced incentives to perform this function in algorithmic markets. Fundamental traders routinely see their gains diminished by faster, automated counterparts, able to front-run trades and to derive maximal benefit from the research of others. In arguing that algorithmic trading is transforming how markets process and interpret information, this Article shows that conventional assumptions in securities law doctrine and policy also break down. With these insights, this Article, offers a new framework to thoroughly reevaluate the centrality of efficiency economics in regulatory design.

16 citations

Journal ArticleDOI
Firat Cengiz1
TL;DR: This Regulation granted some new and generous enforcement powers to the European Commission that had not existed before, and it formally recognised and extended some powers that had previously existed only in the Commission’s practice.
Abstract: (2011). Judicial Review and the Rule of Law in the Eu Competition Law Regime After Alrosa. European Competition Journal: Vol. 7, No. 1, pp. 127-153.

15 citations

Journal ArticleDOI
TL;DR: In this article, the consequences of mandating disclosure about the pay gap between the CEO and the median employee are examined and the relation between disclosure and the employee response using several identification strategies.
Abstract: We examine the consequences of mandating disclosure about the pay gap between the CEO and the median employee. Firms reporting higher pay ratios take actions to downward adjust the reported ratio and tend to include discretionary narrative attempting to portray their employee relations or compensation practices in a positive light (i.e., “spin”). Reporting a higher ratio is associated with adverse changes in employee morale and productivity, especially when the ratio is unexpectedly high. We validate the relation between disclosure and the employee response using several identification strategies. Firms utilizing more spin do not attenuate the negative effects on employees. Those with larger decreases in the pay ratio in the second reporting year reduce their use of spin in the disclosure narrative. Our results contribute to the emerging literature on human capital disclosure.

14 citations