In this paper we test for the theory of deterrence. We exploit the natural experiment provided by the Collective Clemency Bill passed by the Italian Parliament in July 2006. As a consequence of the provisions of the bill, expected punishment to former inmates recommitting a crime can be...

Understanding the impact of legal protection on investment is of major importance. This paper provides a framework for addressing this issue, and shows that investment may actually be higher in the absence of legal protection. Focusing on the application to innovation, in an environment where an...