Credit Ratings as Coordination Mechanisms

In this paper, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings can serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a "focal point" for firms and their investors. We explore the vital, but previously overlooked implicit contractual relationship between a credit rating agency and a firm. Credit ratings can help fix the desired equilibrium and as such play an economically meaningful role. Our model provides several empirical predictions and insights regarding the expected price impact of ratings changes, the discreteness in funding cost changes, and the effect of the focus of organizations on the efficacy of credit ratings.http://deepblue.lib.umich.edu/bitstream/2027.42/39841/3/wp457.pd

Objectivity, Proximity and Adaptability in Corporate Governance

Countries appear to differ considerably in the basic orientations of their corporate governance structures. We postulate the trade-off between objectivity and proximity as fundamental to the corporate governance debate. We stress the value of objectivity that comes with distance (e.g. the market oriented U.S. system), and the value of better information that comes with proximity (e.g. the more intrusive Continental European model). Our key result is that the optimal distance between management and monitor (board or shareholders) has a bang-bang solution: either one should capitalize on the better information that comes with proximity or one should seek to benefit optimally from the objectivity that comes with distance. We argue that this result points at an important link between the optimal corporate governance arrangement and industry structure. In this context, we also discuss the ways in which investors have "contracted around" the flaws in their own corporate governance systems, pointing at the adaptability of different arrangements.http://deepblue.lib.umich.edu/bitstream/2027.42/39651/3/wp266.pd

Credit Ratings as Coordination Mechanisms

In this paper, we provide a novel rationale for credit ratings. The rationale that we propose is that credit ratings can serve as a coordinating mechanism in situations where multiple equilibria can obtain. We show that credit ratings provide a "focal point" for firms and their investors. We explore the vital, but previously overlooked implicit contractual relationship between a credit rating agency and a firm. Credit ratings can help fix the desired equilibrium and as such play an economically meaningful role. Our model provides several empirical predictions and insights regarding the expected price impact of ratings changes, the discreteness in funding cost changes, and the effect of the focus of organizations on the efficacy of credit ratings.coordination, credit ratings, multiple equilibria

Identification- and many instrument-robust inference via invariant moment conditions

Identification-robust hypothesis tests are commonly based on the continuous updating objective function or its score. When the number of moment conditions grows proportionally with the sample size, the large-dimensional weighting matrix prohibits the use of conventional asymptotic approximations and the behavior of these tests remains unknown. We show that the structure of the weighting matrix opens up an alternative route to asymptotic results when, under the null hypothesis, the distribution of the moment conditions is reflection invariant. In a heteroskedastic linear instrumental variables model, we then establish asymptotic normality of conventional tests statistics under many instrument sequences. A key result is that the additional terms that appear in the variance are negative. Revisiting a study on the elasticity of substitution between immigrant and native workers where the number of instruments is over a quarter of the sample size, the many instrument-robust approximation indeed leads to substantially narrower confidence intervals

Monitoring of Rat Colonies for Antibodies to CAR Bacillus

The cilia associated respiratory (CAR) bacillus is a respiratory pathogenic bacterium of rats and other species of animal. We determined by enzymelinked immunosorbent assay (ELISA) antibudies t0 CAR bacillus antigen in sera from 20 colonies of rats. Six out of 10 Mycoplasma pulmoms ELISA positive experimental colonies contained CAR bacillus seropositive rats, comprising 26 out of 45 (58 %) samples. CAR bacillus infection was not diagnosed by ELISA in 183 samples from 10 M. pulmonis free SPF-rat breeding colonies

Monitoring Corporate Performance: The Role of Objectivity, Proximity, and Adaptability in Corporate Governance

This Article identifies the fundamental tradeoff faced by individuals, firms and institutions that monitor corporate management\u27s performance. This tradeoff, between objectivity in monitoring and proximity in monitoring, is central to the corporate governance debate. Proximity exists when monitors maintain close contact with management and participate in important decisions on a real-time basis. Objectivity exists when monitors, such as hostile acquirers, analysts, credit rating agencies, accounting firms, and outside lenders, remain distant from management and evaluate management\u27s performance without influence by management

'Trust is good, control is better': the 1974 Herstatt-Bank crisis and its implications for international regulatory reform

With its international supervisory and regulatory implications, the failure of Bankhaus Herstatt is one of the landmarks of post-war financial history. This article offers the first comprehensive historical account of the Herstatt crisis, and contributes to the wider discussions on international supervisory and regulatory reform since the mid-1970s, including regulatory capture, markets' self-regulation and resolution of failed banks. In doing so, it first argues that contrary to a widely held view, the German authorities received early and repeated warnings about Herstatt's dealings but this involved only limited and ineffective regulatory/supervisory responses, then it turns to the actual collapse of the bank in June 1974, and finally explores the wider regulatory issues raised by the Herstatt case

Dietary B group vitamin intake and the bladder cancer risk: a pooled analysis of prospective cohort studies

This work was partly funded by the World Cancer Research Fund International (WCRF 2012/590) and European Commission (FP7-PEOPLE-618308). The Netherlands Cohort Study on diet and cancer was supported by the Dutch Cancer Society. The RERF atomic bomb survivors Study was supported by The Radiation Effects Research Foundation (RERF), Hiroshima and Nagasaki, Japan, a public interest foundation funded by the Japanese Ministry of Health, Labour and Welfare (MHLW) and the US Department of Energy (DOE). The research was also funded in part through DOE award DE-HS0000031 to the National Academy of Sciences. This publication was supported by RERF Research Protocol RP-A5-12. The VITamins and Lifestyle Study (VITAL) was supported by a grant (R01CA74846) from the National Cancer Institute. The European Prospective Investigation into Cancer and Nutrition (EPIC) was carried out with financial support of the `Europe Against Cancer' Programme of the European Commission (SANCO); Ligue contre le Cancer (France); Societe 3 M (France); Mutuelle Generale de l'Education Nationale; Institut National de la Sante et de la Recherche Medicale (INSERM); Institute Gustave Roussy; German Cancer Aid; German Cancer Research Centre; German Federal Ministry of Education and Research; Danish Cancer Society; Health Research Fund (FIS) of the Spanish Ministry of Health; the Spanish Regional Governments of Andalucia, Asturias, Basque Country, Murcia and Navarra; Cancer Research UK; Medical Research Council, UK; Stroke Association, UK; British Heart Foundation; Department of Health, UK; Food Standards Agency, UK; Wellcome Trust, UK; Greek Ministry of Health; Greek Ministry of Education; Italian Association for Research on Cancer; Italian National Research Council; Dutch Ministry of Public Health, Welfare and Sports; Dutch Prevention Funds; LK Research Funds; Dutch ZON (Zorg Onderzoek Nederland); World Cancer Research Fund; Swedish Cancer Society; Swedish Scientific Council; Regional Government of Skane, Sweden; Norwegian Cancer Society; Norwegian Research Council. Partial support for the publication of this supplement was provided by the Centre de Recherche et d'Information Nutritionnelles (CERIN).Purpose Diet may play an essential role in the aetiology of bladder cancer (BC). The B group complex vitamins involve diverse biological functions that could be influential in cancer prevention. The aim of the present study was to investigate the association between various components of the B group vitamin complex and BC risk. Methods Dietary data were pooled from four cohort studies. Food item intake was converted to daily intakes of B group vitamins and pooled multivariate hazard ratios (HRs), with corresponding 95% confidence intervals (CIs), were obtained using Cox-regression models. Dose–response relationships were examined using a nonparametric test for trend. Results In total, 2915 BC cases and 530,012 non-cases were included in the analyses. The present study showed an increased BC risk for moderate intake of vitamin B1 ( HRB1: 1.13, 95% CI: 1.00–1.20). In men, moderate intake of the vitamins B1, B2, energy-related vitamins and high intake of vitamin B1 were associated with an increased BC risk (HR (95% CI): 1.13 (1.02–1.26), 1.14 (1.02–1.26), 1.13 (1.02–1.26; 1.13 (1.02–1.26), respectively). In women, high intake of all vitamins and vitamin combinations, except for the entire complex, showed an inverse association (HR (95% CI): 0.80 (0.67–0.97), 0.83 (0.70–1.00); 0.77 (0.63–0.93), 0.73 (0.61–0.88), 0.82 (0.68–0.99), 0.79 (0.66–0.95), 0.80 (0.66–0.96), 0.74 (0.62–0.89), 0.76 (0.63–0.92), respectively). Dose–response analyses showed an increased BC risk for higher intake of vitamin B1 and B12. Conclusion Our findings highlight the importance of future research on the food sources of B group vitamins in the context of the overall and sex-stratified diet.World Cancer Research Fund International (WCRF) WCRF 2012/590European Commission European Commission Joint Research Centre FP7-PEOPLE-618308KWF KankerbestrijdingRadiation Effects Research Foundation (RERF)Hiroshima and Nagasaki, Japan public interest foundation - Japanese Ministry of Health, Labour and Welfare (MHLW)United States Department of Energy (DOE) DE-HS0000031RERF Research Protocol RP-A5-12United States Department of Health & Human ServicesNational Institutes of Health (NIH) - USANIH National Cancer Institute (NCI) R01CA74846European Commission European Commission Joint Research CentreLigue contre le Cancer (France) 3MMutuelle Generale de l'Education NationaleInstitut National de la Sante et de la Recherche Medicale (Inserm)Institute Gustave RoussyDeutsche KrebshilfeGerman Cancer Research CentreFederal Ministry of Education & Research (BMBF)Danish Cancer SocietyInstituto de Salud Carlos IIISpanish Regional Governments of Andalucia, Asturias, Basque Country, Murcia and NavarraUK Research & Innovation (UKRI) Medical Research Council UK (MRC) Cancer Research UK Stroke Association, UKBritish Heart Foundation Department of Health, UK Food Standards Agency, UKWellcome TrustGreek Ministry of Development-GSRTFondazione AIRC per la ricerca sul cancro Consiglio Nazionale delle Ricerche (CNR)Dutch Ministry of Public Health, Welfare and Sports Dutch Prevention FundsLK Research FundsNetherlands Organization for Scientific Research (NWO)World Cancer Research Fund International (WCRF)Swedish Cancer Society Swedish Scientific Council Regional Government of Skane, SwedenNorwegian Cancer Society Research Council of NorwayEuropean CommissionCentre de Recherche et d'Information Nutritionnelles (CERIN