The extra-tropical Northern Hemisphere temperature in the last two millennia: reconstructions of low-frequency variability

We present two new multi-proxy reconstructions of the extra-tropical Northern Hemisphere (30–90° N) mean temperature: a two-millennia long reconstruction reaching back to 1 AD and a 500-yr long reconstruction reaching back to 1500 AD. The reconstructions are based on compilations of 32 and 91 proxies, respectively, of which only little more than half pass a screening procedure and are included in the actual reconstructions. The proxies are of different types and of different resolutions (annual, annual-to-decadal, and decadal) but all have previously been shown to relate to local or regional temperature. We use a reconstruction method, LOCal (LOC), that recently has been shown to confidently reproduce low-frequency variability. Confidence intervals are obtained by an ensemble pseudo-proxy method that both estimates the variance and the bias of the reconstructions. The two-millennia long reconstruction shows a well defined Medieval Warm Period, with a peak warming ca. 950–1050 AD reaching 0.6 °C relative to the reference period 1880–1960 AD. The 500-yr long reconstruction confirms previous results obtained with the LOC method applied to a smaller proxy compilation; in particular it shows the Little Ice Age cumulating in 1580–1720 AD with a temperature minimum of −1.0 °C below the reference period. The reconstructed local temperatures, the magnitude of which are subject to wide confidence intervals, show a rather geographically homogeneous Little Ice Age, while more geographical inhomogeneities are found for the Medieval Warm Period. Reconstructions based on different subsets of proxies show only small differences, suggesting that LOC reconstructs 50-yr smoothed extra-tropical NH mean temperatures well and that low-frequency noise in the proxies is a relatively small problem

The Performance of Private Equity Funds: Does Diversification Matter?

This paper is the first systematic analysis of the impact of diversification on the performance of private equity funds. A unique data set allows the exact evaluation of diversification across the dimensions financing stages, industries, and countries. Very different levels of diversification can be observed across sample funds. While some funds are highly specialized others are highly diversified. The empirical results show that the rate of return of private equity funds declines with diversification across financing stages, but increases with diversification across industries. Accordingly, the fraction of portfolio companies which have a negative return or return nothing at all, increase with diversification across financing stages. Diversification across countries has no systematic effect on the performance of private equity funds

The price of rapid exit in venture capital-backed IPOs

This paper proposes an explanation for two empirical puzzles surrounding initial public offerings (IPOs). Firstly, it is well documented that IPO underpricing increases during “hot issue” periods. Secondly, venture capital (VC) backed IPOs are less underpriced than non-venture capital backed IPOs during normal periods of activity, but the reverse is true during hot issue periods: VC backed IPOs are more underpriced than non-VC backed ones. This paper shows that when IPOs are driven by the initial investor’s desire to exit from an existing investment in order to finance a new venture, both the value of the new venture and the value of the existing firm to be sold in the IPO drive the investor’s choice of price and fraction of shares sold in the IPO. When this is the case, the availability of attractive new ventures increases equilibrium underpricing, which is what we observe during hot issue periods. Moreover, I show that underpricing is affected by the severity of the moral hazard problem between an investor and the firm’s manager. In the presence of a moral hazard problem the degree of equilibrium underpricing is more sensitive to changes in the value of the new venture. This can explain why venture capitalists, who often finance firms with more severe moral hazard problems, underprice IPOs less in normal periods, but underprice more strongly during hot issue periods. Further empirical implications relating the fraction of shares sold and the degree of underpricing are presented

Strategies used as spectroscopy of financial markets reveal new stylized facts

We propose a new set of stylized facts quantifying the structure of financial markets. The key idea is to study the combined structure of both investment strategies and prices in order to open a qualitatively new level of understanding of financial and economic markets. We study the detailed order flow on the Shenzhen Stock Exchange of China for the whole year of 2003. This enormous dataset allows us to compare (i) a closed national market (A-shares) with an international market (B-shares), (ii) individuals and institutions and (iii) real investors to random strategies with respect to timing that share otherwise all other characteristics. We find that more trading results in smaller net return due to trading frictions. We unveiled quantitative power laws with non-trivial exponents, that quantify the deterioration of performance with frequency and with holding period of the strategies used by investors. Random strategies are found to perform much better than real ones, both for winners and losers. Surprising large arbitrage opportunities exist, especially when using zero-intelligence strategies. This is a diagnostic of possible inefficiencies of these financial markets.Comment: 13 pages including 5 figures and 1 tabl

Enhanced recovery after surgery: are we ready, and can we afford not to implement these pathways for patients undergoing radical cystectomy?

Enhanced recovery after surgery (ERAS) for radical cystectomy seems logical, but our study has shown a paucity in the level of clinical evidence. As part of the ERAS Society, we welcome global collaboration to collect evidence that will improve patient outcomes

How many educated workers for your economy? European targets, optimal public spending, and labor market impact

This paper studies optimal taxation schemes for education in a search- matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets - maximizing the total employment level and optimizing the social surplus - are studied according to three different public taxation strategies. We calibrate our model using evidence from thirteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market char- acteristics, the target set by governments seems compatible with the social surplus maximization objective for some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.info:eu-repo/semantics/publishedVersio

Mitigation of Moral Hazard and Adverse Selection in Venture Capital Financing: The Influence of the Country’s Institutional Setting

A venture capitalist (VC) needs to trade off benefits and costs when attempting to mitigate agency problems in their investor-investee relationship. We argue that signals of ventures complement the VC’s capacity to screen and conduct a due diligence during the pre-investment phase, but its attractiveness may diminish in institutional settings supporting greater transparency. Similarly, whereas a VC may opt for contractual covenants to curb potential opportunism by ventures in the post-investment phase, this may only be effective in settings supportive of shareholder rights enforcement. Using an international sample of VC contracts, our study finds broad support for these conjectures. It delineates theoretical and practical implications for how investors can best deploy their capital in different institutional settings whilst nurturing their relationships with entrepreneurs

Conflicts of Interest in Sell-side Research and The Moderating Role of Institutional Investors

Because sell-side analysts are dependent on institutional investors for performance ratings and trading commissions, we argue that analysts are less likely to succumb to investment banking or brokerage pressure in stocks highly visible to institutional investors. Examining a comprehensive sample of analyst recommendations over the 1994-2000 period, we find that analysts’ recommendations relative to consensus are positively associated with investment banking relationships and brokerage pressure, but negatively associated with the presence of institutional investor owners. The presence of institutional investors is also associated with more accurate earnings forecasts and more timely re-ratings following severe share price falls