Corporate diversification and R&D intensity dynamics

We study the dynamic bidirectional relationship between firm R&D intensity and corporate diversification, using longitudinal data of Spanish manufacturing companies. Our empirical approach takes into account the censored nature of the dependent variables and the existence of firm-specific unobserved heterogeneity. Whereas we find a positive linear effect of R&D intensity on related diversification, the evidence about the effect of related diversification on R&D intensity takes the form of an inverted U. Hence, the effect of related diversification on R&D intensity is positive but marginally decreasing for moderate levels of related diversification, but such effect can turn out negative for high levels of related diversification. Additionally, the consequences of the dynamic relation are that the effects are substantially larger in the long-run than in the short-run

The failure tolerance of mechatronic software systems to random and targeted attacks

This paper describes a complex networks approach to study the failure tolerance of mechatronic software systems under various types of hardware and/or software failures. We produce synthetic system architectures based on evidence of modular and hierarchical modular product architectures and known motifs for the interconnection of physical components to software. The system architectures are then subject to various forms of attack. The attacks simulate failure of critical hardware or software. Four types of attack are investigated: degree centrality, betweenness centrality, closeness centrality and random attack. Failure tolerance of the system is measured by a 'robustness coefficient', a topological 'size' metric of the connectedness of the attacked network. We find that the betweenness centrality attack results in the most significant reduction in the robustness coefficient, confirming betweenness centrality, rather than the number of connections (i.e. degree), as the most conservative metric of component importance. A counter-intuitive finding is that "designed" system architectures, including a bus, ring, and star architecture, are not significantly more failure-tolerant than interconnections with no prescribed architecture, that is, a random architecture. Our research provides a data-driven approach to engineer the architecture of mechatronic software systems for failure tolerance.Comment: Proceedings of the 2013 ASME International Design Engineering Technical Conferences & Computers and Information in Engineering Conference IDETC/CIE 2013 August 4-7, 2013, Portland, Oregon, USA (In Print

Recent Milestones in Unraveling the Full-Field Structure of Dynamic Shear Cracks and Fault Ruptures in Real-Time: From Photoelasticity to Ultrahigh-Speed Digital Image Correlation

The last few decades have seen great achievements in dynamic fracture mechanics. Yet, it was not possible to experimentally quantify the full-field behavior of dynamic fractures, until very recently. Here, we review our recent work on the full-field quantification of the temporal evolution of dynamic shear ruptures. Our newly developed approach based on digital image correlation combined with ultrahigh-speed photography has revolutionized the capabilities of measuring highly transient phenomena and enabled addressing key ques- tions of rupture dynamics. Recent milestones include the visualization of the complete displacement, particle velocity, strain, stress and strain rate fields near growing ruptures, capturing the evolution of dynamic friction during individual rupture growth, and the detailed study of rupture speed limits. For example, dynamic friction has been the big- gest unknown controlling how frictional ruptures develop but it has been impossible, until now, to measure dynamic friction during spontaneous rupture propagation and to understand its dependence on other quantities. Our recent measurements allow, by simul- taneously tracking tractions and sliding speeds on the rupturing interface, to disentangle its complex dependence on the slip, slip velocity, and on their history. In another application, we have uncovered new phenomena that could not be detected with previous methods, such as the formation of pressure shock fronts associated with “supersonic” propagation of shear ruptures in viscoelastic materials where the wave speeds are shown to depend strongly on the strain rate

The physics of earthquakes

Earthquakes occur as a result of global plate motion. However, this simple picture is far from complete. Some plate boundaries glide past each other smoothly, while others are punctuated by catastrophic failures. Some earthquakes stop after only a few hundred metres while others continue rupturing for a thousand kilometres. Earthquakes are sometimes triggered by other large earthquakes thousands of kilometres away. We address these questions by dissecting the observable phenomena and separating out the quantifiable features for comparison across events. We begin with a discussion of stress in the crust followed by an overview of earthquake phenomenology, focusing on the parameters that are readily measured by current seismic techniques. We briefly discuss how these parameters are related to the amplitude and frequencies of the elastic waves measured by seismometers as well as direct geodetic measurements of the Earth's deformation. We then review the major processes thought to be active during the rupture and discuss their relation to the observable parameters. We then take a longer range view by discussing how earthquakes interact as a complex system. Finally, we combine subjects to approach the key issue of earthquake initiation. This concluding discussion will require using the processes introduced in the study of rupture as well as some novel mechanisms. As our observational database improves, our computational ability accelerates and our laboratories become more refined, the next few decades promise to bring more insights on earthquakes and perhaps some answers

Spillover effects among financial institutions: a state-dependent sensitivity value-at-risk approach : [Version September 2012]

In this paper, we develop a state-dependent sensitivity value-at-risk (SDSVaR) approach that enables us to quantify the direction, size, and duration of risk spillovers among financial institutions as a function of the state of financial markets (tranquil, normal, and volatile). Within a system of quantile regressions for four sets of major financial institutions (commercial banks, investment banks, hedge funds, and insurance companies) we show that while small during normal times, equivalent shocks lead to considerable spillover effects in volatile market periods. Commercial banks and, especially, hedge funds appear to play a major role in the transmission of shocks to other financial institutions. Using daily data, we can trace out the spillover effects over time in a set of impulse response functions and find that they reach their peak after 10 to 15 days