Financing Constraints and Corporate Investment

Most empirical models of investment rely on the assumption that firms are able to respond to prices set in centralized securities markets (through the "cost of capital" or "q"). An alternative approach emphasizes the importance of cash flow as a determinant of investment spending, because of a "financing hierarchy," in which internal finance has important cost advantages over external finance. We build on recent research concerning imperfections in markets for equity and debt. This work suggests that some firms do not have sufficient access to external capital markets to enable them to respond to changes in the cost of capital, asset prices, or tax-based investment incentives. To the extent that firms are constrained in their ability to raise funds externally, investment spending may be sensitive to the availability of internal finance. That is, investment may display "excess sensitivity" to movements in cash flow. In this paper, we work within the q theory of investment, and examine the importance of a financing hierarchy created by capital-market imperfections. Using panel data on individual manufacturing firms, we compare the investment behavior of rapidly growing firms that exhaust all of their internal finance with that of mature firms paying dividends. We find that q values remain very high for significant periods of time for firms paying no dividends, relative to those for mature firms. We also find that investment is more sensitive to cash flow for the group of firms that our model implies is most likely to face external finance constraints. These results are consistent with the augmented model we propose, which takes into account different financing regimes for different groups of firms. Some extensions and implications for public policy are discussed at the end.

Improved ontology for eukaryotic single-exon coding sequences in biological databases

Indexación: Scopus.Efficient extraction of knowledge from biological data requires the development of structured vocabularies to unambiguously define biological terms. This paper proposes descriptions and definitions to disambiguate the term 'single-exon gene'. Eukaryotic Single-Exon Genes (SEGs) have been defined as genes that do not have introns in their protein coding sequences. They have been studied not only to determine their origin and evolution but also because their expression has been linked to several types of human cancer and neurological/developmental disorders and many exhibit tissue-specific transcription. Unfortunately, the term 'SEGs' is rife with ambiguity, leading to biological misinterpretations. In the classic definition, no distinction is made between SEGs that harbor introns in their untranslated regions (UTRs) versus those without. This distinction is important to make because the presence of introns in UTRs affects transcriptional regulation and post-transcriptional processing of the mRNA. In addition, recent whole-transcriptome shotgun sequencing has led to the discovery of many examples of single-exon mRNAs that arise from alternative splicing of multi-exon genes, these single-exon isoforms are being confused with SEGs despite their clearly different origin. The increasing expansion of RNA-seq datasets makes it imperative to distinguish the different SEG types before annotation errors become indelibly propagated in biological databases. This paper develops a structured vocabulary for their disambiguation, allowing a major reassessment of their evolutionary trajectories, regulation, RNA processing and transport, and provides the opportunity to improve the detection of gene associations with disorders including cancers, neurological and developmental diseases. © The Author(s) 2018. Published by Oxford University Press.https://academic.oup.com/database/article/doi/10.1093/database/bay089/509943

Business Cycles and Oligopoly Supergames: Some Empirical Evidence on Prices and Margins

There has been a significant interest on a theoretical level in the application of supergames to oligopoly behavior. Implications for pricing behavior in trigger-strategy models in response to aggregate demand are of particular importance for public policy considerations. We contrast the predictions for the movements of industry prices over the business cycle of two such models -- put forth by Edward Green and Robert Porter and by Julio Rotemberg and Garth Saloner -- and test the predictions using a panel data set of U.S. manufacturing industries. Our principal findings are four. First, the levels of price-cost margins of concentrated, homogeneous-goods industries, while higher than those of unconcentrated counterparts, appear to be closer to those predicted by a single-period Cournot-Nash equilibrium than monopoly. Second, there is little evidence to support the idea that price-cost margins of these industries have different cyclical patterns from other industries apart from effects by level of industry concentration. Maximum price declines for concentrated industries give little support for the occurrence of price wars during either recessions or booms. Finally, consistent with the predictions of the Rotemberg-Saloner model, the industries with high price-cost margins have more countercyclical price movements than those exhibited by other industries. That gradual price adjustment is quantitatively important for those industries, suggests, however, that other factors may lie behind the apparent rigidity of prices.

Financing Constraints and Corporate Investment: Response to Kaplan and Zingales

Kaplan and Zingales (1995, hereafter KZ) criticize Fazzari, Hubbard and Petersen (1988, hereafter FHP) and much ensuing research that uses cross-sectional differences in firm behavior to test for financing constraints on investment. This reply identifies flaws in the KZ analysis. The questions KZ raise have been considered extensively and rigorously in the literature (most of which is not addressed in KZ), with results broadly similar to those of FHP. We also challenge both of KZ's main results. First, their finding that most of the FHP firms are not financially constrained relies on an inappropriate operational definition of what it means to be constrained. Their definition ignores the incentives for firms that operate in imperfect capital markets to accumulate stocks of cash or maintain unused debt capacity to offset partially shocks to the flow of internal finance. Second, the KZ regression results (lower sensitivity of investment to cash flow for firms classified as constrained than for those classified as unconstrained) are uninformative. Their classification approach relies on possibly self- serving managerial statements that may present a distorted picture of firm's availability of finance. It also employs misleading criteria to make unrealistically fine distinctions in the degree of financing constraints, and emphasizes financial distress rather than financing constraints. Finally, econometric problems affect the interpretation of the KZ regressions. We conclude that the KZ findings do not contradict the interpretation of the empirical results in FHP and subsequent research.

Phase 2 of the array automated assembly task for the low cost silicon solar array project

Studies were conducted on several fundamental aspects of electroless nickel/solder metallization for silicon solar cells. A process, which precedes the electroless nickel plating with several steps of palladium plating and heat treatment, was compared directly with single step electroless nickel plating. Work was directed toward answering specific questions concerning the effect of silicon surface oxide on nickel plating, effects of thermal stresses on the metallization, sintering of nickel plated on silicon, and effects of exposure to the plating solution on solar cell characteristics. The process was found to be extremely lengthy and cumbersome, and was also found to produce a product virtually identical to that produced by single step electroless nickel plating, as shown by adhesion tests and electrical characteristics of cells under illumination

Methods for measuring the citations and productivity of scientists across time and discipline

Publication statistics are ubiquitous in the ratings of scientific achievement, with citation counts and paper tallies factoring into an individual's consideration for postdoctoral positions, junior faculty, tenure, and even visa status for international scientists. Citation statistics are designed to quantify individual career achievement, both at the level of a single publication, and over an individual's entire career. While some academic careers are defined by a few significant papers (possibly out of many), other academic careers are defined by the cumulative contribution made by the author's publications to the body of science. Several metrics have been formulated to quantify an individual's publication career, yet none of these metrics account for the dependence of citation counts and journal size on time. In this paper, we normalize publication metrics across both time and discipline in order to achieve a universal framework for analyzing and comparing scientific achievement. We study the publication careers of individual authors over the 50-year period 1958-2008 within six high-impact journals: CELL, the New England Journal of Medicine (NEJM), Nature, the Proceedings of the National Academy of Science (PNAS), Physical Review Letters (PRL), and Science. In comparing the achievement of authors within each journal, we uncover quantifiable statistical regularity in the probability density function (pdf) of scientific achievement across both time and discipline. The universal distribution of career success within these arenas for publication raises the possibility that a fundamental driving force underlying scientific achievement is the competitive nature of scientific advancement.Comment: 25 pages in 1 Column Preprint format, 7 Figures, 4 Tables. Version II: changes made in response to referee comments. Note: change in definition of "Paper shares.