Essays in finance and applied microeconomics

The thesis consists of three independent essays on various aspects of Finance and Applied Microeconomics. The first two essays focus on the impact of princeling connections, while the third essay examines the impact of Universal Credit on children’s mental health. The introduction provides a brief overview of the background, and the conclusion summarizes the main findings across the three chapters. The first essay explores the impact of princeling connections on regulatory enforcement over Chinese listed firms. I first examine the factors that may influence princelings’ preference to join a particular firm and then test whether enforcement agencies punish princeling‐connected firms less. The findings indicate that princelings tend to join firms with better financial performance, weaker governance structures, fewer Corporate Social Responsibility (CSR) activities, and more investment in innovation. Through Propensity Score Matching (PSM), I match princeling connected and non-connected firms with similar characteristics and find that regulatory enforcement is distorted for princeling‐backed firms due to the privileges and protections they receive. The heterogeneity test reveals that princeling connections have a more significant influence in regions with weaker legal environments, non‐state‐owned enterprises, and firms with lower Return On Assets (ROA) ratios. Moreover, I investigate whether the effects of princeling connections have changed after the Chinese government’s anti‐corruption campaign in 2012, which serves as an exogenous shock. The results demonstrate that even after the anti‐corruption campaign, princeling‐connected firms are still less likely to be punished. The robustness checks provide supporting evidence. In summary, the study suggests that princelingbacked firms enjoy a lower likelihood of punishment, highlighting another advantage of cultivating princeling connections. Using data from Chinese listed firms between 2008 and 2018, the second essay examines the impact of Private Equity (PE) on portfolios’ Initial Public Offering (IPO) and post‐IPO performance, and the role of princeling connection in this process. First, I explore whether PEs can help portfolio firms perform better. The findings indicate that the involvement of PE in listed firms leads to lower IPO underpricing and improved post‐IPO performance, demonstrating that PE’s market specialization, financial support, and active involvement contribute to enhancing IPO performance. Furthermore, PEs with princeling connections can achieve even lower IPO underpricing compared to PEs without such connections. However, the certification role of princeling‐connected PEs is insignificant in the long run. This suggests that the function of princeling‐connected PEs is primarily to provide political relationships with government regulators rather than additional oversight of their portfolio firms. The results withstand rigorous sensitivity tests, and the effects are heterogeneous in two ways: first, firms backed by reputable PEs experience superior IPO performance; second, the positive effects of PE on IPO performance are more pronounced among non‐state‐owned enterprises. Then I investigate the role of PE during periods of high Economic Policy Uncertainty (EPU). I find that targets backed by non‐princeling connected PEs are more resilient while targets backed by princeling‐connected PEs cannot offer support when facing high policy uncertainty in terms of IPO underpricing and post‐IPO performance. This is consistent with the view that the skills and expertise PE investors accumulate over time, as well as their vast networks of board chairs and directors, can contribute to the better performance of the portfolio firms during the high EPU period. However, princeling‐connected PEs have limited capacity to provide additional support to target firms when faced with high policy uncertainty. The last essay investigates the impact of Universal Credit (UC) on children’s mental health. It was implemented at different times across various regions, starting in the northwest of England in April 2013. By May 2016, families with children became eligible to apply for UC. Leveraging the effects of UC on children’s mental health, I analyze a dataset consisting of 8,026 observations from 6,215 children (aged 4‐10 years) in England, Wales, and Scotland who participated in the UK Household Longitudinal Study (UKHLS) between 2009 and 2019. Employing a two‐way fixed effects approach, I divide respondents into two groups: children with unemployed parents eligible for UC (intervention group) and children with parents who are not unemployed and thus would typically not be eligible for UC (comparison group). To demonstrate the change in self‐reported psychological distress, measured using the Strengths and Difficulties Questionnaire (SDQ), between the intervention group and the comparison group before and after the introduction of the reform, the parallel trend graph indicates that the prevalence of psychological distress increased in the intervention group after the implementation of UC compared to the comparison group. This graph provides preliminary evidence that Universal Credit has had a negative impact on children’s mental health. Regression results further demonstrate that children experience a 9% higher likelihood of having mental health problems following UC in the treatment groups. Exploring potential mechanisms, the study finds that reduced benefit income does not exert a significant influence on children’s mental health. However, the strict job search requirements associated with UC lead to parents spending less time with their children, resulting in poorer mental health outcomes. Heterogeneity analysis suggests that households with multiple children and households with a single parent are more profoundly affected by UC. The results remain consistent across various robustness checks. The results also highlight that Universal Credit has a larger effect on younger children. Therefore, the findings suggest that the introduction of Universal Credit has led to an increase in psychological distress among recipient children, indicating higher levels of mental health difficulties among those impacted by the policy

Development of the Swimbladder Surfactant System and Biogenesis of Lysosome-Related Organelles Is Regulated by BLOS1 in Zebrafish

Hermansky-Pudlak syndrome (HPS) is a human autosomal recessive disorder that is characterized by oculocutaneous albinism and a deficiency of the platelet storage pool resulting from defective biogenesis of lysosome-related organelles (LROs). To date, 10 HPS genes have been identified, three of which belong to the octamer complex BLOC-1 (biogenesis of lysosome-related organelles complex 1). One subunit of the BLOC-1 complex, BLOS1, also participates in the BLOC-1-related complex (BORC). Due to lethality at the early embryo stage in BLOS1 knockout mice, the function of BLOS1 in the above two complexes and whether it has a novel function are unclear. Here, we generated three zebrafish mutant lines with a BLOC-1 deficiency, in which melanin and silver pigment formation was attenuated as a result of mutation of bloc1s1, bloc1s2, and dtnbp1a, suggesting that they function in the same complex. In addition, mutations of bloc1s1 and bloc1s2 caused an accumulation of clusters of lysosomal vesicles at the posterior part of the tectum, representing a BORC-specific function in zebrafish. Moreover, bloc1s1 is highly expressed in the swimbladder during postembryonic stages and is required for positively regulating the expression of the genes, which is known to govern surfactant production and lung development in mammals. Our study identified BLOS1 as a crucial regulator of the surfactant system. Thus, the zebrafish swimbladder might be an easy system to screen and study genetic modifiers that control surfactant production and homeostasis.</p

Cdc42 is essential for the polarized movement and adhesion of human dental pulp stem cells

Objective: Stem cell-based tissue repair and regeneration require the regulation of cell migration and adhesion. As a regulator of cell polarization, Cdc42 (cell division control protein 42) plays a basic role at the initial stage of cell migration and adhesion. This study explores the effect of Cdc42 on the polarized migration and adhesion of hDPSCs (human dental pulp stem cells). Design: HDPSCs were isolated from extracted third molars and transfected with siRNA targeted against Cdc42. Scratch wound assays and transwell assays were performed to detect the migration of human dental pulp stem cells. Polarization assays were applied to explore the polarized movement of Golgi bodies and nuclei. Western blot was used to examine the expression of related proteins. Results: The expression of Cdc42 was knocked down by siRNA transfection, which inhibited the migration of hDPSCs in both the scratch wound assays and transwell assays. Meanwhile, the proportion of polarized hDPSCs during migration was also decreased, and the adhesion ability of hDPSCs was downregulated. Western blot demonstrated that these effects were dependent on FAK (focal adhesion kinase), β-catenin and GSK3β (Glycogen synthase kinase-3β). Conclusion Our study demonstrates that Cdc42 plays an essential role during the polarized movement and adhesion of hDPSCs

Effect of Universal Credit on young children’s mental health: quasi-experimental evidence from understanding society

Background: Child mental health has become an increasingly important issue in the UK, especially in the context of significant welfare reforms. Universal Credit (UC) has introduced substantial changes to the UK’s social security system, significantly impacting low-income families. Our aim was to assess the effects of UC’s introduction on children’s mental health for families eligible for UC versus a comparable non-eligible sample. Methods: Using Understanding Society data from 5806 observations of 4582 children (aged 5 or 8 years) in Great Britain between 2012 and 2018, we created two groups: children whose parents were eligible for UC (intervention group) and children whose parents were ineligible for UC (comparison group). Child mental health was assessed using a parent-reported Strengths and Difficulties Questionnaire. The OR and percentage point change in the prevalence of children experiencing mental health difficulties between the intervention group and the comparison group following the introduction of UC were analysed. We also investigated whether the utilisation of childcare services and changes in household income were mechanisms by which UC impacted children’s mental health. Results: Logistic regression results demonstrated that the prevalence of mental health problems among eligible children whose parents were unemployed increased by an OR of 2.18 (95% CI 1.14 to 4.18), equivalent to an 8-percentage point increase (95% CI 1 to 14 percentage points) following the introduction of UC, relative to the comparison group. Exploring potential mechanisms, we found neither reduced household income nor increased use of childcare services, which served as a proxy for reduced time spent with parents, significantly influenced children’s mental health. Conclusions: UC has led to an increase in mental health problems among recipient children, particularly for children in larger families and those aged 8. Policymakers should carefully evaluate the potential health consequences for specific demographics when introducing new welfare policies

Combined effects of sodium carbonate pretreatment and hybrid drying methods on the nutritional and antioxidant properties of dried Goji berries

[EN] Combined effects of sodium carbonate (SC) pretreatment and hybrid drying methods (freeze drying-instant controlled pressure drop drying (FD-ICPDD), hot air drying (HAD-ICPDD) on nutritional and antioxidant properties of Goji berries were investigated. Compared with distilled water pretreatment, SC pretreatment could obtain products with better quality. Goji dried by FD-ICPDD showed better overall quality than that dried by HAD or FD alone. FD-ICPDD products exhibited higher contents of total Lycium barbarum polysaccharide (140 g/kg), total carotenoids (2.4 g/kg) as well as the strongest ABTS.+ radical scavenging activity (57.6 μmol TE/g). FD-ICPDD could be an alternative drying method for processing valuable agro-products.Song, H.; Bi, J.; Chen, Q.; Zhou, M.; Wu, X.; Song, J. (2018). Combined effects of sodium carbonate pretreatment and hybrid drying methods on the nutritional and antioxidant properties of dried Goji berries. En IDS 2018. 21st International Drying Symposium Proceedings. Editorial Universitat Politècnica de València. 1203-1210. https://doi.org/10.4995/IDS2018.2018.8373OCS1203121

A novel approach to inhibit HIV-1 infection and enhance lysis of HIV by a targeted activator of complement

<p>Abstract</p> <p>Background</p> <p>The complement system is one of the most potent weapons of innate immunity. It is not only a mechanism for direct protection against invading pathogens but it also interacts with the adaptive immunity to optimize the pathogen-specific humoral and cellular defense cascades in the body. Complement-mediated lysis of HIV is inefficient but the presence of HIV particles results in complement activation by the generation of many C3-fragments, such as C3dg and C3d. It has been demonstrated that activation of complement can enhance HIV infection through the binding of special complement receptor type 2 expression on the surface of mature B cells and follicular dendritic cells.</p> <p>Presentation of the hypothesis</p> <p>Previous studies have proven that the complement-mediated antibody-dependent enhancement of HIV infection is mediated by the association of complement receptor type 2 bound to the C3 fragment and deposited on the surface of HIV virions. Thus, we hypothesize that a new activator of complement, consisting of a target domain (C3-binding region of complement receptor type 2) linked to a complement-activating human IgG1 Fc domain (CR2-Fc), can target and amplify complement deposition on HIV virions and enhance the efficiency of HIV lysis.</p> <p>Testing the hypothesis</p> <p>Our hypothesis was tested using cell-free HIV-1 virions cultivated <it>in vitro </it>and assessment of virus opsonization was performed by incubating appropriate dilutions of virus with medium containing normal human serum and purified CR2-Fc proteins. As a control group, viruses were incubated with normal human serum under the same conditions. Virus neutralization assays were used to estimate the degree of CR2-Fc-enhanced lysis of HIV compared to untreated virus.</p> <p>Implications of the hypothesis</p> <p>The targeted complement activator, CR2-Fc, can be used as a novel approach to HIV therapy by abrogating the complement-enhanced HIV infection of cells.</p

Insulin Resistance and Oxidative Stress: In Relation to Cognitive Function and Psychopathology in Drug-Naive, First-Episode Drug-Free Schizophrenia

Objective: The present study aimed to examine whether insulin resistance and oxidative stress are associated with cognitive impairment in first-episode drug-free schizophrenia (SZ) patients. Methods: Ninety first-episode SZ patients and 70 healthy controls were enrolled. Fasting insulin (FINS) and markers of oxidative stress [oxidized glutathione (GSSG), superoxide dismutase (SOD), nitric oxide (NO) and uric acid (UA) levels] were measured in serum before pharmacological treatment was initiated. Psychiatric symptoms and cognitive function were assessed with the Positive and Negative Syndrome Scale (PANSS) and MATRICS Consensus Cognitive Battery (MCCB), respectively. In addition, the homeostatic model assessment of insulin resistance (HOMA-IR) was also studied. Results: HOMA-IR and serum levels of GSSG and NO were significantly higher in SZ patients than in healthy controls (P \u3c 0.001), while the serum levels of SOD were significantly lower than in healthy controls (P \u3c 0.001). HOMA-IR, GSSG and NO levels were significantly correlated to the total cognitive function scores of the patient group (r = -0.345,-0.369,-0.444, respectively, P \u3c 0.05). But these factors were not co-related to the cognitive functions in the healthy control group. And, levels of SOD, UA were not associated with the total cognitive function scores in both the patient and the healthy control groups. NO was positively correlated with general pathological and the total score in the PANSS, and was negatively correlated with six cognitive domains (r = -0.316 to -0.553, P \u3c 0.05). Conclusions: The levels of insulin resistance and oxidative stress are elevated, and correlated with the severity of cognitive impairment in drug-naive, first-episode SZ patients. Treatment approaches targeting on reducing insulin resistance and oxidative stress may improve cognitive function in SZ patients