The Risk Management Role of Accounting Conservatism for Operating Cash Flows

This study examines relations between accounting conservatism and the downside risk of operating cash flows (OCF) and finds both unconditional and conditional conservatism to be negatively associated with OCF downside risk measured by indicators of OCF falling below expectations, by OCF’s root lower partial moment and by OCF at risk, with several additional results. First, both unconditional and conditional conservatism enhance cash holdings and its upside potential, thus helping mitigate subsequent OCF downside risk. Second, both unconditional and conditional conservatism reduce the effects of customer bargaining power on OCF downside risk. Third, conditional conservatism increases hedge usage and unconditional conservatism substitutes for hedging in mitigating OCF downside risk. Finally, downside cash flow beta enhances unconditional and conditional conservatism and the mitigating effect of unconditional conservatism on OCF downside risk during economic downturns. These findings lend support to conservatism’s role as a risk management tool and are robust to alternative measures and various controls.postprin

Managerial incentives, CEO characteristics and corporate innovation in China's private sector

We use a unique World Bank survey of 1088 private manufacturing firms from 18 Chinese cities over the period 2000-2002 to empirically examine the roles of managerial incentives and CEO characteristics in a firm's innovation activities. We look at both innovation effort (R&D intensity) and innovation performance measures such as new product sales. We obtain the following main results: (1) the presence of CEO incentive schemes increases both corporate innovation effort and innovation performance; (2) sales-based performance measures in the incentive scheme, as compared with profit-based performance measure, are more conducive to firm innovation; and (3) CEO education level, professional background and political connection are positively associated with firm's innovation efforts. The main results are robust to endogeneity tests with instrumental variables. We also discuss some important policy implications. © 2010 Association for Comparative Economic Studies.postprin

Accounting conservatism and bankruptcy risk

Date posted: June 6, 2010 ; Last revised: July 14, 2015This study examines the relation between accounting conservatism and bankruptcy risk using a large sample of U.S listed firms from fiscal year 1989 to 2007. We present evidence that unconditional and conditional conservatism generally mitigate subsequent bankruptcy risk by creating cushions for bad times and reducing information asymmetry about bad news. We identify two channels for accounting conservatism to mitigate bankruptcy risk: enhancing cash holdings and constraining earnings management. The effect of accounting conservatism does not change for firms with extreme distress and income smoothing, but weakens for firms with debt contracts referenced by credit default swaps (CDS), consistent with CDS lowering debtholder monitoring. Results are robust to reverse causality, relations between unconditional and conditional conservatism, and alternative measures of bankruptcy risk and accounting conservatism. These findings extend research on accounting conservatism, bankruptcy risk and debt contracting, and help inform debates regarding conservatism's role as a pervasive property and long-standing tenet of financial accounting.postprin

中国上市公司治理结构的实证研究

我国上市公司的市场价值与其治理结构有无联系？投资者愿为治理良好的公司付出多大的溢价？本文旨在对上述两大问题进行全面和系统的实证研究，揭示当前上市公司存在的治理弊病，为建立具有中国特色的公司治理体系提供依据。为此，我们充分考虑了公司治理的内外部机制，并结合中国的市场环境，归纳出一系列变量来描述公司治理在我国的具体实践。基于这个变量体系，我们运用主元因素分析法编制了一个可反映上市公司治理水平的综合指标 - G指标。我们的实证研究发现：（1）治理水平高的企业其市场价值也高；（2）投资者愿为治理良好的公司付出相当可观的溢价。postprin

Validity of the Polar V800 heart rate monitor to measure RR intervals at rest

Purpose To assess the validity of RR intervals and short-term heart rate variability (HRV) data obtained from the Polar V800 heart rate monitor, in comparison to an electrocardiograph (ECG). Method Twenty participants completed an active orthostatic test using the V800 and ECG. An improved method for the identification and correction of RR intervals was employed prior to HRV analysis. Agreement of the data was assessed using intra-class correlation coefficients (ICC), Bland–Altman limits of agreement (LoA), and effect size (ES). Results A small number of errors were detected between ECG and Polar RR signal, with a combined error rate of 0.086 %. The RR intervals from ECG to V800 were significantly different, but with small ES for both supine corrected and standing corrected data (ES 0.999 for both supine and standing corrected intervals. When analysed with the same HRV software no significant differences were observed in any HRV parameters, for either supine or standing; the data displayed small bias and tight LoA, strong ICC (>0.99) and small ES (≤0.029). Conclusions The V800 improves over previous Polar models, with narrower LoA, stronger ICC and smaller ES for both the RR intervals and HRV parameters. The findings support the validity of the Polar V800 and its ability to produce RR interval recordings consistent with an ECG. In addition, HRV parameters derived from these recordings are also highly comparable

Structural insight into SUMO chain recognition and manipulation by the ubiquitin ligase RNF4

The small ubiquitin-like modifier (SUMO) can form polymeric chains that are important signals in cellular processes such as meiosis, genome maintenance and stress response. The SUMO-targeted ubiquitin ligase RNF4 engages with SUMO chains on linked substrates and catalyses their ubiquitination, which targets substrates for proteasomal degradation. Here we use a segmental labelling approach combined with solution nuclear magnetic resonance (NMR) spectroscopy and biochemical characterization to reveal how RNF4 manipulates the conformation of the SUMO chain, thereby facilitating optimal delivery of the distal SUMO domain for ubiquitin transfer

Comparing the immune response to a novel intranasal nanoparticle PLGA vaccine and a commercial BPI3V vaccine in dairy calves

peer-reviewedBackground There is a need to improve vaccination against respiratory pathogens in calves by stimulation of local immunity at the site of pathogen entry at an early stage in life. Ideally such a vaccine preparation would not be inhibited by the maternally derived antibodies. Additionally, localized immune response at the site of infection is also crucial to control infection at the site of entry of virus. The present study investigated the response to an intranasal bovine parainfluenza 3 virus (BPI3V) antigen preparation encapsulated in PLGA (poly dl-lactic-co-glycolide) nanoparticles in the presence of pre-existing anti-BPI3V antibodies in young calves and comparing it to a commercially available BPI3V respiratory vaccine. Results There was a significant (P < 0.05) increase in BPI3V-specific IgA in the nasal mucus of the BPI3V nanoparticle vaccine group alone. Following administration of the nanoparticle vaccine an early immune response was induced that continued to grow until the end of study and was not observed in the other treatment groups. Virus specific serum IgG response to both the nanoparticle vaccine and commercial live attenuated vaccine showed a significant (P < 0.05) rise over the period of study. However, the cell mediated immune response observed didn’t show any significant rise in any of the treatment groups. Conclusion Calves administered the intranasal nanoparticle vaccine induced significantly greater mucosal IgA responses, compared to the other treatment groups. This suggests an enhanced, sustained mucosal-based immunological response to the BPI3V nanoparticle vaccine in the face of pre-existing antibodies to BPI3V, which are encouraging and potentially useful characteristics of a candidate vaccine. However, ability of nanoparticle vaccine in eliciting cell mediated immune response needs further investigation. More sustained local mucosal immunity induced by nanoparticle vaccine has obvious potential if it translates into enhanced protective immunity in the face of virus outbreak

Discovery of frequent episodes in event logs

Lion's share of process mining research focuses on the discovery of end-to-end process models describing the characteristic behavior of observed cases. The notion of a process instance (i.e., the case) plays an important role in process mining. Pattern mining techniques (such as frequent itemset mining, association rule learning, sequence mining, and traditional episode mining) do not consider process instances. An episode is a collection of partially ordered events. In this paper, we present a new technique (and corresponding implementation) that discovers frequently occurring episodes in event logs thereby exploiting the fact that events are associated with cases. Hence, the work can be positioned in-between process mining and pattern mining. Episode discovery has its applications in, amongst others, discovering local patterns in complex processes and conformance checking based on partial orders. We also discover episode rules to predict behavior and discover correlated behaviors in processes. We have developed a ProM plug-in that exploits efficient algorithms for the discovery of frequent episodes and episode rules. Experimental results based on real-life event logs demonstrate the feasibility and usefulness of the approach

Second primary squamous cell carcinoma arising in cutaneous flap reconstructions of two head and neck cancer patients

Early complications of myocutaneous flap transfers following surgical eradication of head and neck tumors have been extensively described. However, knowledge concerning long-term complications of these techniques remains limited. We report the cases of two patients with a prior history of squamous cell carcinoma of the head and neck (HNSCC), who developed a second primary SCC on the cutaneous surface of their flaps, years after reconstruction. Interestingly, it seems that the well-known risk of a second primary SCC in patients with previous head and neck carcinoma also applies to foreign tissues implanted within the area at risk. Given the important expansion of these interventions, this type of complication may become more frequent in the future. Therefore, long-term follow-up of patients previously treated for HNSCC not only requires careful evaluation of the normal mucosa of the upper aero-digestive tract, but also of the cutaneous surface of the flap used for reconstruction