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To What Extent Do Public Interest and Private Interest Affect Regulations? An Empirical Investigation of Firms in Japan

Author

Listed:
  • Fumitoshi Mizutani

    (Graduate School of Business Administration, Kobe University)

  • Eri Nakamura

    (Graduate School of Business Administration, Kobe University)

Abstract

Through an empirical analysis of firms in Japan, this paper investigates to what extent the public interest and the private interest theories, respectively, explain the actual regulatory process. Our estimation findings are as follows. First, the explanatory power of the public interest theory is higher in non-public utility industries, while that of the private interest theory is higher in public utility industries. Second, rapidly growing industries become less regulated as they no longer need government protection. Third, highly competitive industries become more regulated so as to retain profit for individual companies. Fourth, price level has different implications among industries. The negative coefficient in non-public utility industries supports the public interest theory, while the positive coefficient in public utility industries supports the private interest theory.

Suggested Citation

  • Fumitoshi Mizutani & Eri Nakamura, 2015. "To What Extent Do Public Interest and Private Interest Affect Regulations? An Empirical Investigation of Firms in Japan," Discussion Papers 2015-21, Kobe University, Graduate School of Business Administration.
    • Handle: RePEc:kbb:dpaper:2015-21
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    File URL: https://www.b.kobe-u.ac.jp/papers_files/2015_21.pdf
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    More about this item

    Keywords

    Determinants of regulation; Corporate governance; Public interest theory; Private interest theory;
    All these keywords.

    JEL classification:

    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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