The growth companies puzzle: can growth opportunities measures predict firm growth?

While numerous empirical studies include proxies for growth opportunities in their analyses, there is limited evidence as to the validity of the various growth proxies used. Based on a sample of 1942 firm-years for listed UK companies over the 1990-2004 period, we assess the performance of eight growth opportunities measures. Our results show that while all the growth measures show some ability to predict growth in company sales, total assets, or equity, there are substantial differences between the various models. In particular, Tobin's Q performs poorly while dividend-based measures generally perform best. However, none of the measures has any success in predicting earnings per share growth, even when controlling for mean reversion and other time-series patterns in earnings. We term this the 'growth companies puzzle'. Growth companies do grow, but they do not grow in the key dimension (earnings) theory predicts. Whether the failure of 'growth companies' to deliver superior earnings growth is attributable to increased competition, poor investments, or behavioural biases, it is still a puzzle why growth companies on average fail to deliver superior earnings growth

Testing for inconsistencies in the estimation of UK capital structure determinants

This article analyses the determinants of the capital structure of 1054 UK companies from 1991 to 1997, and the extent to which the influence of these determinants are affected by time-invariant firm-specific heterogeneity. Comparing the results of pooled OLS and fixed effects panel estimation, significant differences in the results are found. While the OLS results are generally consistent with prior literature, the results of our fixed effects panel estimation contradict many of the traditional theories of the determinants of corporate financial structure. This suggests that results of traditional studies may be biased owing to a failure to control for firm-specific, time-invariant heterogeneity. The results of the fixed effects panel estimation find larger companies to have higher levels of both long-term and short-term debt than do smaller firms, profitability to be negatively correlated with the level of gearing, although profitable firms tend to have more short-term bank borrowing than less profitable firms, and tangibility to positively influence the level of short-term bank borrowing, as well as all long-term debt elements. However, the level of growth opportunities appears to have little influence on the level of gearing, other than short-term bank borrowing, where a significant negative relationship is observed

Improving response rates using a monetary incentive for patient completion of questionnaires: an observational study

Background: Poor response rates to postal questionnaires can introduce bias and reduce the statistical power of a study. To improve response rates in our trial in primary care we tested the effect of introducing an unconditional direct payment of 5 pound for the completion of postal questionnaires. Methods: We recruited patients in general practice with knee problems from sites across the United Kingdom. An evidence-based strategy was used to follow-up patients at twelve months with postal questionnaires. This included an unconditional direct payment of 5 pound to patients for the completion and return of questionnaires. The first 105 patients did not receive the 5 pound incentive, but the subsequent 442 patients did. We used logistic regression to analyse the effect of introducing a monetary incentive to increase the response to postal questionnaires. Results: The response rate following reminders for the historical controls was 78.1% ( 82 of 105) compared with 88.0% ( 389 of 442) for those patients who received the 5 pound payment (diff = 9.9%, 95% CI 2.3% to 19.1%). Direct payments significantly increased the odds of response ( adjusted odds ratio = 2.2, 95% CI 1.2 to 4.0, P = 0.009) with only 12 of 442 patients declining the payment. The incentive did not save costs to the trial - the extra cost per additional respondent was almost 50 pound. Conclusion: The direct payment of 5 pound significantly increased the completion of postal questionnaires at negligible increase in cost for an adequately powered study

Capital structure and its determinants in the United Kingdom – a decompositional analysis

Prior research on capital structure by Rajan and Zingales (1995) suggests that the level of gearing in UK companies is positively related to size and tangibility, and negatively correlated with profitability and the level of growth opportunities. However, as argued by Harris and Raviv (1991), 'The interpretation of results must be tempered by an awareness of the difficulties involved in measuring both leverage and the explanatory variables of interest'. In this study the focus is on the difficulties of measuring gearing, and the sensitivity of Rajan and Zingales' results to variations in gearing measures are tested. Based on an analysis of the capital structure of 822 UK companies, Rajan and Zingales' results are found to be highly definitional-dependent. The determinants of gearing appear to vary significantly, depending upon which component of debt is being analysed. In particular, significant differences are found in the determinants of long- and short-term forms of debt. Given that trade credit and equivalent, on average, accounts for more than 62% of total debt, the results are particularly sensitive to whether such debt is included in the gearing measure. It is argued, therefore, that analysis of capital structure is incomplete without a detailed examination of all forms of corporate debt

FULFIL Trial: Once-Daily Triple Therapy in Patients with Chronic Obstructive Pulmonary Disease

RATIONALE: Randomized data comparing triple therapy with dual inhaled corticosteroid (ICS)/long-acting β2-agonist (LABA) therapy in patients with chronic obstructive pulmonary disease (COPD) are limited. OBJECTIVES: We compared the effects of once-daily triple therapy on lung function and health-related quality of life with twice-daily ICS/LABA therapy. METHODS: FULFIL was a randomized, double-blind, double-dummy study comparing 24 weeks of once-daily triple therapy (fluticasone furoate/umeclidinium/vilanterol 100 μg/62.5 μg/25 μg; ELLIPTA(®) inhaler) with twice-daily ICS/LABA therapy (budesonide/formoterol 400 μg/12 μg; Turbuhaler(®)). A patient subgroup remained on blinded treatment for up to 52 weeks. Co-primary endpoints were change from baseline in trough forced expiratory volume in 1 second (FEV1) and in St George's Respiratory Questionnaire (SGRQ) Total score, at Week 24. MEASUREMENTS AND MAIN RESULTS: In the intent-to-treat population (N = 1,810) at Week 24 for triple therapy (n = 911) and ICS/LABA therapy (n = 899): mean change from baseline in FEV1 was 142 mL (95% confidence interval [CI], 126,158) and -29 mL (95% CI, -46,-13), respectively; mean change from baseline SGRQ was -6.6 units (95% CI, -7.4,-5.7) and -4.3 units (95% CI, -5.2,-3.4), respectively. For both endpoints, the between-group differences were statistically significant (P < 0.001). There was a statistically significant reduction in moderate/severe exacerbation rate with triple versus ICS/LABA therapy (35% reduction, 95% CI, 14,51; P = 0.002). The safety profile of triple therapy reflected the known profiles of the components. CONCLUSIONS: These results support the benefits of single inhaler triple therapy compared with ICS/LABA therapy, in patients with advanced COPD. Clinical trial registration available at www.clinicaltrials.gov, ID NCT02345161

Once-Daily Triple Therapy in Patients with COPD: Patient-Reported Symptoms and Quality of Life.

INTRODUCTION: Directly recorded patient experience of symptoms and health-related quality of life (HRQoL) can complement lung function and exacerbation rate data in chronic obstructive pulmonary disease (COPD) clinical studies. The FULFIL study recorded daily symptoms and activity limitation together with additional patient-reported outcomes of dyspnea and HRQoL, as part of the prespecified analyses. FULFIL co-primary endpoint data have been previously reported. METHODS: FULFIL was a phase III, 24-week, randomized, double-blind, double-dummy, multicenter study comparing once-daily single inhaler triple therapy [fluticasone furoate/umeclidinium/vilanterol (FF/UMEC/VI)] 100 µg/62.5 µg/25 µg with twice-daily inhaled corticosteroid/long-acting β2-agonist therapy [budesonide/formoterol (BUD/FOR)] 400 µg/12 µg in patients with symptomatic COPD at risk of exacerbations. A subset participated for 52 weeks. Patient-reported assessments were: Evaluating Respiratory Symptoms in COPD™ (E-RS: COPD), St George's Respiratory Questionnaire (SGRQ) for COPD, COPD Assessment Test (CAT), baseline and transitional dyspnea indices (TDI) and daily and global anchor questions for activity limitation. RESULTS: FF/UMEC/VI showed greater reductions from baseline in 4-weekly mean E-RS: COPD total and all subscale scores compared with BUD/FOR; differences were statistically significant (P < 0.05) at each time period. FF/UMEC/VI also demonstrated greater improvements from baseline at weeks 4 and 24 in SGRQ domain scores and TDI focal score compared with BUD/FOR. At weeks 4 and 24, improvements greater than the minimal clinically important difference from baseline were observed in CAT score with FF/UMEC/VI, but not BUD/FOR; differences were statistically significant (P ≤ 0.003). CONCLUSION: These findings demonstrate sustained daily symptom and HRQoL benefits of FF/UMEC/VI versus BUD/FOR. The inclusion of the CAT may provide data that are readily generalizable to everyday clinical practice. TRIAL REGISTRATION: ClinicalTrials.gov number: NCT02345161. FUNDING: GSK

Evidence for chemokine synergy during neutrophil migration in ARDS.

BACKGROUND: Acute respiratory distress syndrome (ARDS) is a life-threatening condition characterised by pulmonary oedema, respiratory failure and severe inflammation. ARDS is further characterised by the recruitment of neutrophils into the lung interstitium and alveolar space. OBJECTIVES: The factors that regulate neutrophil infiltration into the inflamed lung and our understanding of the pathomechanisms in ARDS remain incomplete. This study aimed at determining the role of the chemokine (C-C motif) ligand (CCL)2 and CCL7 in ARDS. METHODS: CCL2 and CCL7 protein levels were measured in bronchoalveolar lavage (BAL) fluid obtained from lipopolysaccharide(LPS)-challenged human volunteers and two separate cohorts of patients with ARDS. Neutrophil chemotaxis to ARDS BAL fluid was evaluated and the contribution of each was assessed and compared with chemokine (C-X-C motif) ligand 8 (CXCL8). Chemokine receptor expression on neutrophils from blood or BAL fluid of patients with ARDS was analysed by flow cytometry. RESULTS: CCL2 and CCL7 were significantly elevated in BAL fluid recovered from LPS-challenged volunteers and patients with ARDS. BAL fluid from patients with ARDS was highly chemotactic for human neutrophils and neutralising either CCL2 or CCL7 attenuated the neutrophil chemotactic response. Moreover, CCL2 and CCL7 synergised with CXCL8 to promote neutrophil migration. Furthermore, neutrophils isolated from the blood or BAL fluid differentially regulated the cell surface expression of chemokine (C-X-C motif) receptor 1 and C-C chemokine receptor type 2 during ARDS. CONCLUSION: This study highlights important inflammatory chemokines involved in regulating neutrophil migration, which may have potential value as therapeutic targets for the treatment of ARDS

Credit bureaus between risk-management, creditworthiness assessment and prudential supervision

"This text may be downloaded for personal research purposes only. Any additional reproduction for other purposes, whether in hard copy or electronically, requires the consent of the author. If cited or quoted, reference should be made to the full name of the author, the title, the working paper or other series, the year, and the publisher."This paper discusses the role and operations of consumer Credit Bureaus in the European Union in the context of the economic theories, policies and law within which they work. Across Europe there is no common practice of sharing the credit data of consumers which can be used for several purposes. Mostly, they are used by the lending industry as a practice of creditworthiness assessment or as a risk-management tool to underwrite borrowing decisions or price risk. However, the type, breath, and depth of information differ greatly from country to country. In some Member States, consumer data are part of a broader information centralisation system for the prudential supervision of banks and the financial system as a whole. Despite EU rules on credit to consumers for the creation of the internal market, the underlying consumer data infrastructure remains fragmented at national level, failing to achieve univocal, common, or defined policy objectives under a harmonised legal framework. Likewise, the establishment of the Banking Union and the prudential supervision of the Euro area demand standardisation and convergence of the data used to measure debt levels, arrears, and delinquencies. The many functions and usages of credit data suggest that the policy goals to be achieved should inform the legal and institutional framework of Credit Bureaus, as well as the design and use of the databases. This is also because fundamental rights and consumer protection concerns arise from the sharing of credit data and their expanding use

The oral microbiota of wild bears in Sweden reflects the history of antibiotic use by humans

Following the advent of industrial-scale antibiotic production in the 1940s,1 antimicrobial resistance (AMR) has been on the rise and now poses a major global health threat in terms of mortality, morbidity, and economic burden.2,3 Because AMR can be exchanged between humans, livestock, and wildlife, wild animals can be used as indicators of human-associated AMR contamination of the environment.4 However, AMR is a normal function of natural environments and is present in host-associated microbiomes, which makes it challenging to distinguish between anthropogenic and natural sources.4,5 One way to overcome this difficulty is to use historical samples that span the period from before the mass production of antibiotics to today. We used shotgun metagenomic sequencing of dental calculus, the calcified form of the oral microbial biofilm, to determine the abundance and repertoire of AMR genes in the oral microbiome of Swedish brown bears collected over the last 180 years. Our temporal metagenomics approach allowed us to establish a baseline of natural AMR in the pre-antibiotics era and to quantify a significant increase in total AMR load and diversity of AMR genes that is consistent with patterns of national human antibiotic use. We also demonstrated a significant decrease in total AMR load in bears in the last two decades, which coincides with Swedish strategies to mitigate AMR. Our study suggests that public health policies can be effective in limiting human-associated AMR contamination of the environment and wildlife

Strategic implications of valuation methods

Author's OriginalStrategy is ultimately aimed at creating shareholder value, placing valuation in a central role linking finance and strategy. Focusing on growth options, this paper uses a unique "perfect information" model to examine, from a strategy point of view, the relationship between the market value of the firm and its intrinsic, or DCF, value. Although the research is at the level of the firm, the results have implications at the level of individual strategies and projects, since a firm can be conceptualized as a collection of projects. The findings highlight the relationship between the value of growth options and macroeconomic conditions, industry characteristics, and firm-specific factors. A revised version of this paper has since been published in the journal Advances in Strategic Management. Please use this version in your citations.Alessandri, T. M., Lander, D. M., & Bettis, R. A. (2007), Strategic Implications of Valuation: Evidence from Valuing Growth Options, in Professor Brian Silverman (ed.) Real Options Theory. Advances in Strategic Management, 24, 459-48