Testing for inconsistencies in the estimation of UK capital structure determinants

This article analyses the determinants of the capital structure of 1054 UK companies from 1991 to 1997, and the extent to which the influence of these determinants are affected by time-invariant firm-specific heterogeneity. Comparing the results of pooled OLS and fixed effects panel estimation, significant differences in the results are found. While the OLS results are generally consistent with prior literature, the results of our fixed effects panel estimation contradict many of the traditional theories of the determinants of corporate financial structure. This suggests that results of traditional studies may be biased owing to a failure to control for firm-specific, time-invariant heterogeneity. The results of the fixed effects panel estimation find larger companies to have higher levels of both long-term and short-term debt than do smaller firms, profitability to be negatively correlated with the level of gearing, although profitable firms tend to have more short-term bank borrowing than less profitable firms, and tangibility to positively influence the level of short-term bank borrowing, as well as all long-term debt elements. However, the level of growth opportunities appears to have little influence on the level of gearing, other than short-term bank borrowing, where a significant negative relationship is observed

Capital structure and its determinants in the United Kingdom – a decompositional analysis

Prior research on capital structure by Rajan and Zingales (1995) suggests that the level of gearing in UK companies is positively related to size and tangibility, and negatively correlated with profitability and the level of growth opportunities. However, as argued by Harris and Raviv (1991), 'The interpretation of results must be tempered by an awareness of the difficulties involved in measuring both leverage and the explanatory variables of interest'. In this study the focus is on the difficulties of measuring gearing, and the sensitivity of Rajan and Zingales' results to variations in gearing measures are tested. Based on an analysis of the capital structure of 822 UK companies, Rajan and Zingales' results are found to be highly definitional-dependent. The determinants of gearing appear to vary significantly, depending upon which component of debt is being analysed. In particular, significant differences are found in the determinants of long- and short-term forms of debt. Given that trade credit and equivalent, on average, accounts for more than 62% of total debt, the results are particularly sensitive to whether such debt is included in the gearing measure. It is argued, therefore, that analysis of capital structure is incomplete without a detailed examination of all forms of corporate debt

Skycorr: A general tool for spectroscopic sky subtraction

Airglow emission lines, which dominate the optical-to-near-IR sky radiation, show strong, line-dependent variability on various time scales. Therefore, the subtraction of the sky background in the affected wavelength regime becomes a problem if plain sky spectra have to be taken at a different time as the astronomical data. A solution of this issue is the physically motivated scaling of the airglow lines in the plain sky data to fit the sky lines in the object spectrum. We have developed a corresponding instrument-independent approach based on one-dimensional spectra. Our code skycorr separates sky lines and sky/object continuum by an iterative approach involving a line finder and airglow line data. The sky lines are grouped according to their expected variability. The line groups in the sky data are then scaled to fit the sky in the science data. Required pixel-specific weights for overlapping groups are taken from a comprehensive airglow model. Deviations in the wavelength calibration are corrected by fitting Chebyshev polynomials and rebinning via asymmetric damped sinc kernels. The scaled sky lines and the sky continuum are subtracted separately. VLT X-Shooter data covering time intervals from two minutes to about one year were selected to illustrate the performance. Except for short time intervals of a few minutes, the sky line residuals were several times weaker than for sky subtraction without fitting. Further tests show that skycorr performs consistently better than the method of Davies (2007) developed for VLT SINFONI data.Comment: 17 pages, 18 figures, accepted for publication in A&

Flux calibration of medium-resolution spectra from 300 nm to 2500 nm: Model reference spectra and telluric correction

While the near-infrared wavelength regime is becoming more and more important for astrophysics there is a marked lack of spectrophotometric standard star data that would allow the flux calibration of such data. Furthermore, flux calibrating medium- to high-resolution \'echelle spectroscopy data is challenging even in the optical wavelength range, because the available flux standard data are often too coarsely sampled. We will provide standard star reference data that allow users to derive response curves from 300nm to 2500nm for spectroscopic data of medium to high resolution, including those taken with \'echelle spectrographs. In addition we describe a method to correct for moderate telluric absorption without the need of observing telluric standard stars. As reference data for the flux standard stars we use theoretical spectra derived from stellar model atmospheres. We verify that they provide an appropriate description of the observed standard star spectra by checking for residuals in line cores and line overlap regions in the ratios of observed (X-shooter) spectra to model spectra. The finally selected model spectra are then corrected for remaining mismatches and photometrically calibrated using independent observations. The correction of telluric absorption is performed with the help of telluric model spectra.We provide new, finely sampled reference spectra without telluric absorption for six southern flux standard stars that allow the users to flux calibrate their data from 300 nm to 2500 nm, and a method to correct for telluric absorption using atmospheric models.Comment: Reference spectra available at CDS. Published in A&A 568, A9, 201

An economists' manifesto on unemployment in the European Union.

This manifesto challenges a pernicious orthodoxy that has gripped Europe's policy makers. It is that demand- and supply-side policies must have different aims, that a limited number of supply-side policies are to be devoted to fighting unemployment, and that demand management (and particularly monetary policy) is are to be devoted solely to fighting inflation. The prevailing orthodoxy also claims that the choice of policy instruments for combating unemployment is a political decision, in which each instrument is evaluated on a case-by-case basis. In what follows, we outline various practical proposals aimed at a prompt reduction of unemployment. We are confident that if the advice is given proper attention by governments and monetary authorities, unemployment can be reduced significantly in a matter of a few years. We will divide the proposed actions into those bearing on the revival of aggregate demand (demand policies) and those addressed to the reform of the labour and product markets and the system of benefits for the unemployed (supply policies). But we stress from the very beginning that we regard our proposals as strictly complementary with one another. Each proposal, applied in isolation, may produce little or even perverse effects, while the simultaneous application can be counted upon to yield the desired outcome. This holds in particular with respect to the relation between demand and supply policies. The underlying idea is that it is much easier to encourage people to look for jobs if there are jobs to be found and it is much easier to encourage firms to offer more jobs if there are people looking for jobs.Beschäftigungspolitik; Arbeitslosigkeit; EU-Staaten;

Comparative interactomics analysis of different ALS-associated proteins identifies converging molecular pathways

Amyotrophic lateral sclerosis (ALS) is a devastating neurological disease with no effective treatment available. An increasing number of genetic causes of ALS are being identified, but how these genetic defects lead to motor neuron degeneration and to which extent they affect common cellular pathways remains incompletely understood. To address these questions, we performed an interactomic analysis to identify binding partners of wild-type (WT) and ALS-associated mutant versions of ATXN2, C9orf72, FUS, OPTN, TDP-43 and UBQLN2 in neuronal cells. This analysis identified several known but also many novel binding partners of these proteins

Understanding the Recent Growth in Consumer Loans and Credit Cards in Emerging Markets:Evidence from Turkey

In recent years, the surge in household indebtedness to historical heights has become a significant concern for developed economies. A similar trend has been witnessed in emerging market countries including Turkey. Our objective is to help further understand the dynamics of the recent growth in consumer loans and credit cards (CLCC) in Turkey. For this purpose, we investigate the long-term equilibrating relationships and short-term deviations from the equilibrium, and explore the determinants, directions, and strengths of causality relationships between CLCC and the selected macroeconomic variables, and analyze the dynamic interactions among the variables in the post-sample period by analyzing how CLCC responds to the shocks given to other macroeconomic variables and the contribution of each variable on the forecast variability of CLCC. We use monthly data for the period of January 2004—December 2013 of seven macroeconomic variables of money supply, interest rate, income, consumer confidence, inflation, stock market, and consumer goods imports. On empirical findings, we make suggestions about which policy tools should be used to influence, and if necessary to manage, the growth in CLCC. Copyright © Taylor & Francis Group, LLC

An economists' manifesto on unemployment in the European Union

This manifesto challenges a pernicious orthodoxy that has gripped Europe's policy makers. It is that demand- and supply-side policies must have different aims, that a limited number of supply-side policies are to be devoted to fighting unemployment, and that demand management (and particularly monetary policy) is are to be devoted solely to fighting inflation. The prevailing orthodoxy also claims that the choice of policy instruments for combating unemployment is a political decision, in which each instrument is evaluated on a case-by-case basis. In what follows, we outline various practical proposals aimed at a prompt reduction of unemployment. We are confident that if the advice is given proper attention by governments and monetary authorities, unemployment can be reduced significantly in a matter of a few years. We will divide the proposed actions into those bearing on the revival of aggregate demand (demand policies) and those addressed to the reform of the labour and product markets and the system of benefits for the unemployed (supply policies). But we stress from the very beginning that we regard our proposals as strictly complementary with one another. Each proposal, applied in isolation, may produce little or even perverse effects, while the simultaneous application can be counted upon to yield the desired outcome. This holds in particular with respect to the relation between demand and supply policies. The underlying idea is that it is much easier to encourage people to look for jobs if there are jobs to be found and it is much easier to encourage firms to offer more jobs if there are people looking for jobs

Three-dimensional distribution of ejecta in Supernova 1987A at 10 000 days

Due to its proximity, SN 1987A offers a unique opportunity to directly observe the geometry of a stellar explosion as it unfolds. Here we present spectral and imaging observations of SN 1987A obtained ~10,000 days after the explosion with HST/STIS and VLT/SINFONI at optical and near-infrared wavelengths. These observations allow us to produce the most detailed 3D map of H-alpha to date, the first 3D maps for [Ca II] \lambda \lambda 7292, 7324, [O I] \lambda \lambda 6300, 6364 and Mg II \lambda \lambda 9218, 9244, as well as new maps for [Si I]+[Fe II] 1.644 \mu m and He I 2.058 \mu m. A comparison with previous observations shows that the [Si I]+[Fe II] flux and morphology have not changed significantly during the past ten years, providing evidence that it is powered by 44Ti. The time-evolution of H-alpha shows that it is predominantly powered by X-rays from the ring, in agreement with previous findings. All lines that have sufficient signal show a similar large-scale 3D structure, with a north-south asymmetry that resembles a broken dipole. This structure correlates with early observations of asymmetries, showing that there is a global asymmetry that extends from the inner core to the outer envelope. On smaller scales, the two brightest lines, H-alpha and [Si I]+[Fe II] 1.644 \mu m, show substructures at the level of ~ 200 - 1000 km/s and clear differences in their 3D geometries. We discuss these results in the context of explosion models and the properties of dust in the ejecta.Comment: Accepted for publication in Ap

The short term debt vs. long term debt puzzle: a model for the optimal mix

This paper argues that the existing finance literature is inadequate with respect to its coverage of capital structure of small and medium sized enterprises (SMEs). In particular it is argued that the cost of equity (being both conceptually ill defined and empirically non quantifiable) is not applicable to the capital structure decisions for a large proportion of SMEs and the optimal capital structure depends only on the mix of short and long term debt. The paper then presents a model, developed by practitioners for optimising the debt mix and demonstrates its practical application using an Italian firm's debt structure as a case study