Aligning the Interests of Multiple Principals: Ownership Concentration and Profitability in China's Publicly-Traded Firms

Across the social sciences, agency theory has become one of the basic frameworks through which to analyze the organizational problem of aligning interests between owners (principals) and those who carry out the work of the corporation (agents). Less often analyzed within this framework is the problem of multiple principals with different incentives and agendas. In today's global economy, this is a problem that institutional investors from around the world encounter on a regular basis. We argue that ownership concentration holds the key to dealing with the collective action problems that emerge in these circumstances. To provide empirical insight into these issues, we analyze the impact of ownership concentration in multiple-principal firms that have been listed on the Shanghai and Shenzhen stock exchanges over the last decade. Through these data, we show that the strongest factor shaping performance among this population of firms is ownership concentration: the higher a firm's ownership concentration, the better it performs, both in terms of profitability and in terms of efficiency. Further, as markets in this context have become more competitive over the last decade, overall profitability has declined, but the effect of ownership concentration has increased, suggesting that ownership concentration becomes even more important for achieving corporate goals as markets become more competitive

State Activism and the Hidden Incentives Behind Bank Acquisitions

A number of studies have shown that, as a result of the ambiguity of U.S. legal mandates, organizations have considerable latitude in how they comply with regulations. In this paper, we address how the different agendas of the federal and state governments increase ambiguities in state-firm relations and how states are interested actors in creating opportunities for firms to navigate the federal legislation. We analyze the institutional forces behind bank acquisitions within and across state lines in order to illuminate the ways that U.S. states take advantage of federal ambiguity and are able to shape corporate practices to their benefit. We specifically examine how patterns of bank acquisitions are shaped by the crucial relationship between the federal Community Reinvestment Act (CRA) and a little understood provision in the federal tax code that is implemented at the state level, the Low-Income Housing Tax Credit (LIHTC). The relationship is complex because, while the federal government uses the CRA to control bank acquisition activity, states promote use of the LIHTC, through which banks can address federal CRA concerns, and thereby promote bank acquisitions in their jurisdictions. Thus, our findings suggest that the implementation of social legislation at one level in a federal regulatory system undermines the mechanisms of social legislation at another level. We use archival research and in-depth interviews to examine the interaction between these institutional processes and formulate hypotheses that predict the ways in which bank acquisitions are constrained by banks' CRA ratings and the way states in turn help banks overcome their CRA constraints. Quantitative analyses of all bank acquisitions in the U.S. from 1990 to 2000 largely support these hypotheses

Transcript Specificity in Yeast Pre-mRNA Splicing Revealed by Mutations in Core Spliceosomal Components

Appropriate expression of most eukaryotic genes requires the removal of introns from their pre–messenger RNAs (pre-mRNAs), a process catalyzed by the spliceosome. In higher eukaryotes a large family of auxiliary factors known as SR proteins can improve the splicing efficiency of transcripts containing suboptimal splice sites by interacting with distinct sequences present in those pre-mRNAs. The yeast Saccharomyces cerevisiae lacks functional equivalents of most of these factors; thus, it has been unclear whether the spliceosome could effectively distinguish among transcripts. To address this question, we have used a microarray-based approach to examine the effects of mutations in 18 highly conserved core components of the spliceosomal machinery. The kinetic profiles reveal clear differences in the splicing defects of particular pre-mRNA substrates. Most notably, the behaviors of ribosomal protein gene transcripts are generally distinct from other intron-containing transcripts in response to several spliceosomal mutations. However, dramatically different behaviors can be seen for some pairs of transcripts encoding ribosomal protein gene paralogs, suggesting that the spliceosome can readily distinguish between otherwise highly similar pre-mRNAs. The ability of the spliceosome to distinguish among its different substrates may therefore offer an important opportunity for yeast to regulate gene expression in a transcript-dependent fashion. Given the high level of conservation of core spliceosomal components across eukaryotes, we expect that these results will significantly impact our understanding of how regulated splicing is controlled in higher eukaryotes as well

The Woody Guthrie Centennial Bibliography

This bibliography updates two extensive works designed to include comprehensively all significant works by and about Woody Guthrie. Richard A. Reuss published A Woody Guthrie Bibliography, 1912–1967 in 1968 and Jeffrey N. Gatten\u27s article “Woody Guthrie: A Bibliographic Update, 1968–1986” appeared in 1988. With this current article, researchers need only utilize these three bibliographies to identify all English-language items of relevance related to, or written by, Guthrie

Finishing the euchromatic sequence of the human genome

The sequence of the human genome encodes the genetic instructions for human physiology, as well as rich information about human evolution. In 2001, the International Human Genome Sequencing Consortium reported a draft sequence of the euchromatic portion of the human genome. Since then, the international collaboration has worked to convert this draft into a genome sequence with high accuracy and nearly complete coverage. Here, we report the result of this finishing process. The current genome sequence (Build 35) contains 2.85 billion nucleotides interrupted by only 341 gaps. It covers ∼99% of the euchromatic genome and is accurate to an error rate of ∼1 event per 100,000 bases. Many of the remaining euchromatic gaps are associated with segmental duplications and will require focused work with new methods. The near-complete sequence, the first for a vertebrate, greatly improves the precision of biological analyses of the human genome including studies of gene number, birth and death. Notably, the human enome seems to encode only 20,000-25,000 protein-coding genes. The genome sequence reported here should serve as a firm foundation for biomedical research in the decades ahead

A ‘Third Culture’ in Economics? An Essay on Smith, Confucius and the Rise of China

China's rise drives a growing impact of China on economics. So far, this mainly works via the force of example, but there is also an emerging role of Chinese thinking in economics. This paper raises the question how far Chinese perspectives can affect certain foundational principles in economics, such as the assumptions on individualism and self-interest allegedly originating in Adam Smith. I embark on sketching a 'third culture' in economics, employing a notion from cross-cultural communication theory, which starts out from the observation that the Chinese model was already influential during the European enlightenment, especially on physiocracy, suggesting a particular conceptualization of the relation between good government and a liberal market economy. I relate this observation with the current revisionist view on China's economic history which has revealed the strong role of markets in the context of informal institutions, and thereby explains the strong performance of the Chinese economy in pre-industrial times. I sketch the cultural legacy of this pattern for traditional Chinese conceptions of social interaction and behavior, which are still strong in rural society until today. These different strands of argument are woven together in a comparison between Confucian thinking and Adam Smith, especially with regard to the 'Theory of Moral Sentiments', which ends up in identifying a number of conceptual family resemblances between the two. I conclude with sketching a 'third culture' in economics in which moral aspects of economic action loom large, as well as contextualized thinking in economic policies