Do Independent Directors Cause Improvements in Firm Transparency?

Although recent research documents a positive relation between corporate transparency and the proportion of independent directors, the direction of causality is unclear. We examine a regulatory shock that substantially increased board independence for some firms, and find that information asymmetry, and to some extent management disclosure and financial intermediation, changed at firms affected by this shock. We also examine whether these effects vary as a function of management entrenchment, information processing costs, and required changes to audit committee independence. Our results suggest that firms can alter their corporate transparency to suit the informational demands of a particular board structure

Individual sequences in large sets of gene sequences may be distinguished efficiently by combinations of shared sub-sequences

BACKGROUND: Most current DNA diagnostic tests for identifying organisms use specific oligonucleotide probes that are complementary in sequence to, and hence only hybridise with the DNA of one target species. By contrast, in traditional taxonomy, specimens are usually identified by 'dichotomous keys' that use combinations of characters shared by different members of the target set. Using one specific character for each target is the least efficient strategy for identification. Using combinations of shared bisectionally-distributed characters is much more efficient, and this strategy is most efficient when they separate the targets in a progressively binary way. RESULTS: We have developed a practical method for finding minimal sets of sub-sequences that identify individual sequences, and could be targeted by combinations of probes, so that the efficient strategy of traditional taxonomic identification could be used in DNA diagnosis. The sizes of minimal sub-sequence sets depended mostly on sequence diversity and sub-sequence length and interactions between these parameters. We found that 201 distinct cytochrome oxidase subunit-1 (CO1) genes from moths (Lepidoptera) were distinguished using only 15 sub-sequences 20 nucleotides long, whereas only 8–10 sub-sequences 6–10 nucleotides long were required to distinguish the CO1 genes of 92 species from the 9 largest orders of insects. CONCLUSION: The presence/absence of sub-sequences in a set of gene sequences can be used like the questions in a traditional dichotomous taxonomic key; hybridisation probes complementary to such sub-sequences should provide a very efficient means for identifying individual species, subtypes or genotypes. Sequence diversity and sub-sequence length are the major factors that determine the numbers of distinguishing sub-sequences in any set of sequences

The Exclusion of Restrictive Lung Disease by Spirometric Criteria in Patients with a Reduced Forced Vital Capacity

Reductions in forced vital capacity (EVC) as determined by spirometry may result from restrictive or obstructive disease, either alone or in combination. Restrictive disease is implied when measures of forced expiratory flow are relatively maintained, and obstructive disease is present when flow measurements are disproportionately reduced. In the presence of air flow obstruction, the possibility of concomitant restrictive disease contributing to the reduction in FVC is difficult to assess from spirometry alone. Static lung volumes are usually necessary to establish this diagnosis. We evaluated the FEV1/EVC%o obtained at spirometry compared to its predicted normal value. We found it to be useful in eliminating the need for additional testing in many cases in which the question of mixed obstructive and restrictive disease had been raised. Specifically, in patients with obstructive disease and a reduced FVC, an FEV1/FVC% of less than 81%, of the age-, height-, and sex-matched predicted value largely excluded the possibility that concomitant restrictive disease was also present (p\u3c.05). Higher values had no predictive value

Selenium and tellurium concentrations of Carboniferous British coals

The authors wish to thank Kier Group, the British Coal Utilisation Research Association (BCURA) and Uniper (E.On) for kindly providing coal samples. The authors are grateful to Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq), Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES), and Fundação de Amparo à Pesquisa do Estado do Rio Grande do Sul (FAPERGS) for supporting this study. The authors are grateful for the thorough and constructive comments from two anonymous reviewers, as well as the careful editorial handling of Prof. Ian Somerville. This work was supported by the NERC under Grant number NE/L001764/1.Peer reviewedPublisher PD

Biases in Multi-Year Management Financial Forecasts: Evidence From Private Venture-Backed U.S. Companies

This paper studies the properties and determinants of managers’ multi-year financial forecasts. Using one- to five-year-ahead forecasts reported by private venture-backed firms, we ask whether, by how much, and why biases in managers’ forecasts of revenues, expenses and profits depend on the forecasting horizon and the verifiability of assets. We find that profitability forecasts contain a strategic component, in that [1] one-year-ahead revenue (expense) forecasts are slightly and asymmetrically pessimistic (optimistic), while five-year-ahead forecasts are hugely and asymmetrically optimistic (pessimistic); and [2] biases in revenue and expense forecasts are larger, the harder to verify or more intangible-intensive are firms’ assets

Market-to-Revenue Multiples in Public and Private Capital Markets

The behavior and determinants of market-to-revenue ratios in public and private capital markets is examined. Three samples are analysed: (1) all publicly traded stocks listed at some time on the New York Stock Exchange/American Stock Exchange/National Association of Securities Dealers Automated Quotation System in the 1980—2004 period; (2) sample of over 300 so-called ‘internet companies’ in the 1996—2004 period; and (3) over 5500 privately held venture capital-backed companies in the 1992—2004 period. Both company size and the most recent revenue growth rate are found to explain significant variation across companies in their market-to-revenue multiples — smaller companies and companies with higher recent revenue growth rates have higher multiples. We also document how the capital market appears to use a broad-based information set when setting market-to-revenue multiples for companies with negative revenue growth rates — transitory revenue growth components appear to be identified (in a probabilistic sense) by the capital market. Contrary to much anecdotal comment, we present evidence that the capital market behaved directionally along the lines predicted by capital market theory in the pricing of internet stocks in the 1996—2004 period