Governance through trading: does institutional trading discipline empire building and earnings management?

Accounting Session 1: Earnings ManagementThe Conference program's website is located at http://areas.kenan-flagler.unc.edu/conferences/2013cfea/Pages/Final%20Schedule.aspxThis paper empirically identifies an important external corporate governance mechanism through which the institutional trading improves firm values and disciplines managers from conducting value-destroying activities. We propose a reward-punishment intensity (RPI) measure, and show that it is positively related to firm’s subsequent Tobin’s Q. Importantly, we find that firms with higher RPI exhibit less subsequent empire building and earnings management. Furthermore, we show that the exogenous liquidity shock of Decimalization augments the governance effect of institutional trading. We also find that the discipline effect is more pronounced for firms with moderate institutional ownership concentration, higher managers’ wealth-performance sensitivity, and higher trading liquidity, which further supports the governance role of the RPI. The results are robust to using a subsample containing firms with reduced institutional ownership and to using two instrumental variables.postprin

Does short selling discipline overinvestment?

We explore the disciplining effect of short selling on overinvestment. Firms with more stock lending supply have higher abnormal announcement stock returns of acquiring firms, lower subsequent abnormal capital investments, and longer spells between large investments, and higher subsequent Tobin’s Q and ROA. Alleviating the endogeneity concern, our multivariate difference-in-difference analysis shows that this disciplinary force of lending supply is more effective for firms in the Regulation SHO-PILOT Program. We identify two mechanisms through which short selling disciplines managers: managers’ wealth-performance sensitivity and likelihood of hostile takeovers. Additionally, the disciplinary force only exists for non-financial-constrained firms and nonall-cash M&A deals.postprin

Reconstructing the Star Formation History of the Galaxy

The evolution of the star formation rate in the Galaxy is one of the key ingredients quantifying the formation and determining the chemical and luminosity evolution of galaxies. Many complementary methods exist to infer the star formation history of the components of the Galaxy, from indirect methods for analysis of low-precision data, to new exact analytic methods for analysis of sufficiently high quality data. We summarise available general constraints on star formation histories, showing that derived star formation rates are in general comparable to those seen today. We then show how colour-magnitude diagrams of volume- and absolute magnitude-limited samples of the solar neighbourhood observed by Hipparcos may be analysed, using variational calculus techniques, to reconstruct the local star formation history. The remarkable accuracy of the data coupled to our maximum-likelihood variational method allows objective quantification of the local star formation history with a time resolution of ~ 50 Myr. Over the past 3Gyr, the solar neighbourhood star formation rate has varied by a factor of ~ 4, with characteristic timescale about 0.5Gyr, possibly triggered by interactions with spiral arms.Comment: 12 pages, Proc. of the Sept. 20-24, 1999 Vulcano Workshop ``The chemical evolution of the Milky Way: stars vs. clusters'', eds. F. Matteucci & F. Giovanell

Ex-Day Returns of Stock Distributions: An Anchoring Explanation

We offer a new anchoring explanation for the ex-day abnormal returns of stock distributions including stock dividend distributions, splits, and reverse splits. We propose that investors tend to anchor on cum-day prices in valuating ex-distribution stocks, resulting in a positive association between ex-day returns and adjustment factors. We find that this positive return-factor relation exists for all three types of stock distributions and in both the pre- and post-decimalization periods. Furthermore, we find that this positive return-factor relation is more pronounced among events that are more subject to investors’ anchoring propensity, featured by less investor attention, greater arbitrage difficulty, greater valuation uncertainty, less investor sophistication, and higher market sentiment. Lastly, using brokerage account data, we show that stocks that are traded by investors with more investment experience demonstrate a weaker return-factor relation.postprin

Does short selling discipline managerial empire building?

The Conference program's website is located at http://www.fma.org/Tokyo/TokyoProgramPrelim.htmSession 20 - Monitors and Governance QualityThis paper explores the discipline effect of short selling on managerial empire building. Employing short-selling data from 2002-2011, we document a negative association between the stock lending supply and the subsequent abnormal capital investment. We also find a positive association between the lending supply and the mergers and acquisitions announcement returns of acquiring firms. Firms with higher lending supplies also have higher Tobin’s Q in the subsequent year. In addition, the discipline effect is stronger for firms with higher managers’ wealth-performance sensitivity and with lower financial constraints, and for stock-financing acquisition deals. Alleviating the endogeneity concern, our multivariate difference-in-difference analysis shows that the lending supply is a more effective discipline force for firms that are in the Regulation SHO-Pilot Program during 2005 to 2007.postprin

The iron-chelating drug M30 down-regulates carbon tetrachloride (CCI4)-induced hepatic oxidative stress, inflammation and apoptosis in vitro

Topic: 2 Acute Liver FailureThis journal suppl. entitled: APASL Liver Week 2013BACKGROUND/AIMS: The novel multifunctional brain permeable ironchelator M30 possesses neuroprotective activities against several insults applicable to various neurodegenerative diseases. However, the effect of M30 on CCl4 induced acute liver damage is still unknown. The aim of this study is to investigate whether the multifunctional drug M30 could ameliorate CCl4 induced hepatic injury in human HepG2 cell line. METHODS: HepG2 cells were grown in DMEM supplemented with ...postprin

Assessing the Health of Richibucto Estuary with the Latent Health Factor Index

The ability to quantitatively assess the health of an ecosystem is often of great interest to those tasked with monitoring and conserving ecosystems. For decades, research in this area has relied upon multimetric indices of various forms. Although indices may be numbers, many are constructed based on procedures that are highly qualitative in nature, thus limiting the quantitative rigour of the practical interpretations made from these indices. The statistical modelling approach to construct the latent health factor index (LHFI) was recently developed to express ecological data, collected to construct conventional multimetric health indices, in a rigorous quantitative model that integrates qualitative features of ecosystem health and preconceived ecological relationships among such features. This hierarchical modelling approach allows (a) statistical inference of health for observed sites and (b) prediction of health for unobserved sites, all accompanied by formal uncertainty statements. Thus far, the LHFI approach has been demonstrated and validated on freshwater ecosystems. The goal of this paper is to adapt this approach to modelling estuarine ecosystem health, particularly that of the previously unassessed system in Richibucto in New Brunswick, Canada. Field data correspond to biotic health metrics that constitute the AZTI marine biotic index (AMBI) and abiotic predictors preconceived to influence biota. We also briefly discuss related LHFI research involving additional metrics that form the infaunal trophic index (ITI). Our paper is the first to construct a scientifically sensible model to rigorously identify the collective explanatory capacity of salinity, distance downstream, channel depth, and silt-clay content --- all regarded a priori as qualitatively important abiotic drivers --- towards site health in the Richibucto ecosystem.Comment: On 2013-05-01, a revised version of this article was accepted for publication in PLoS One. See Journal reference and DOI belo

Salt-inducible kinases (SIKs) regulate TGFβ-mediated transcriptional and apoptotic responses

The signalling pathways initiated by members of the transforming growth factor-β (TGFβ) family of cytokines control many metazoan cellular processes, including proliferation and differentiation, epithelial-mesenchymal transition (EMT) and apoptosis. TGFβ signalling is therefore strictly regulated to ensure appropriate context-dependent physiological responses. In an attempt to identify novel regulatory components of the TGFβ signalling pathway, we performed a pharmacological screen by using a cell line engineered to report the endogenous transcription of the TGFβ-responsive target gene PAI-1. The screen revealed that small molecule inhibitors of salt-inducible kinases (SIKs) attenuate TGFβ-mediated transcription of PAI-1 without affecting receptor-mediated SMAD phosphorylation, SMAD complex formation or nuclear translocation. We provide evidence that genetic inactivation of SIK isoforms also attenuates TGFβ-dependent transcriptional responses. Pharmacological inhibition of SIKs by using multiple small-molecule inhibitors potentiated apoptotic cell death induced by TGFβ stimulation. Our data therefore provide evidence for a novel function of SIKs in modulating TGFβ-mediated transcriptional and cellular responses.</p

Improving statistical inference on pathogen densities estimated by quantitative molecular methods: malaria gametocytaemia as a case study

BACKGROUND: Quantitative molecular methods (QMMs) such as quantitative real-time polymerase chain reaction (q-PCR), reverse-transcriptase PCR (qRT-PCR) and quantitative nucleic acid sequence-based amplification (QT-NASBA) are increasingly used to estimate pathogen density in a variety of clinical and epidemiological contexts. These methods are often classified as semi-quantitative, yet estimates of reliability or sensitivity are seldom reported. Here, a statistical framework is developed for assessing the reliability (uncertainty) of pathogen densities estimated using QMMs and the associated diagnostic sensitivity. The method is illustrated with quantification of Plasmodium falciparum gametocytaemia by QT-NASBA. RESULTS: The reliability of pathogen (e.g. gametocyte) densities, and the accompanying diagnostic sensitivity, estimated by two contrasting statistical calibration techniques, are compared; a traditional method and a mixed model Bayesian approach. The latter accounts for statistical dependence of QMM assays run under identical laboratory protocols and permits structural modelling of experimental measurements, allowing precision to vary with pathogen density. Traditional calibration cannot account for inter-assay variability arising from imperfect QMMs and generates estimates of pathogen density that have poor reliability, are variable among assays and inaccurately reflect diagnostic sensitivity. The Bayesian mixed model approach assimilates information from replica QMM assays, improving reliability and inter-assay homogeneity, providing an accurate appraisal of quantitative and diagnostic performance. CONCLUSIONS: Bayesian mixed model statistical calibration supersedes traditional techniques in the context of QMM-derived estimates of pathogen density, offering the potential to improve substantially the depth and quality of clinical and epidemiological inference for a wide variety of pathogens

Can We Really Prevent Suicide?

Every year, suicide is among the top 20 leading causes of death globally for all ages. Unfortunately, suicide is difficult to prevent, in large part because the prevalence of risk factors is high among the general population. In this review, clinical and psychological risk factors are examined and methods for suicide prevention are discussed. Prevention strategies found to be effective in suicide prevention include means restriction, responsible media coverage, and general public education, as well identification methods such as screening, gatekeeper training, and primary care physician education. Although the treatment for preventing suicide is difficult, follow-up that includes pharmacotherapy, psychotherapy, or both may be useful. However, prevention methods cannot be restricted to the individual. Community, social, and policy interventions will also be essentia