Commitment or Entrenchment?: Controlling Shareholders and Board Composition

This paper examines the determinants of board composition and firm valuation as a function of board composition in Taiwan - a country that features relatively weak protection for investors, firms with controlling shareholders, and pyramidal groups. The results suggest that there is poor governance when the board is dominated by members who are affiliated with the controlling family but good governance when the board is dominated by members who are not affiliated with the controlling family. In particular board affiliation is higher when negative entrenchment effects - measured by (1) divergence in control and cash flow rights, (2) family control, and (3) same CEO and Chairman - are strong and lower when positive incentive effects, measured by cash flow rights, are strong. Moreover, relative firm value is negatively related to board affiliation in family-controlled firms. Thus, the proportion of directors represented by a controlling family appears to be a reasonable proxy for the quality of corporate governance at the firm level when investor protection is relatively weak and it is difficult to determine the degree of separation between ownership and control.

Can Corporate Governance Variables Enhance the Prediction Power of Accounting-Based Financial Distress Prediction Models?

We integrated accounting, corporate governance, and macroeconomic variables to build up a binary logistic regression model for the prediction of financially distressed firms. Debt ratio and ROA are found to be the most explanatory accounting variables while the percentage of directors controlled by the largest shareholder (which measures negative entrenchment effect), management participation, and the percentage of shares pledged for loans by large shareholders are shown to have positive contribution to the probability of financial distress. For macroeconomic sensitivities, firms with higher sensitivities to the annualized growth rates of manufacturing production index and money supply (M2) are more vulnerable to financial distress. As to the issue of sampling technique, we find that oversampling of distressed firms is subject to the problem of choice-based sample bias pointed out by Zmijewski (1984). The classification accuracy is overstated consequently. We try to include as many healthy firms as possible in our sample instead of following the traditional 1: 1 or 1: 2 matching principle. The results show that the classification accuracy is mostly significantly improved in our integrated prediction model when the sample is closest to the actual population. For the trade-off between type I and type II errors in the predicted probability classification, we maximize the sum of classification accuracy for both groups of firms (the healthy and the distressed). It is found that an estimated probability of financial distress of 0.2000 represents the optimal cutoff point for predicting financial distress. Under such a cutoff scheme, our integrated model produces an in-sample classification accuracy of 80.7% for distressed firms and 93.2% for healthy firms. For out-sample prediction, 90% of the distressed firms and 85.4% healthy firms in 2001 are correctly identified using an integrated model built upon samples from 1998 to 2000.Corporate governance, Financial distress prediction model, Choice-based sample bias

Are all regulatory compliant independent director appointments the same? An analysis of Taiwanese board appointments

Globally many regulators adopted a rules-based approach to independent director appointments stipulating ‘independence’ criteria. This paper investigates whether partitioning a regulatory compliant sample of independent director appointments by prior affiliation to the board influences the relationship between ownership and control rights, and performance. We report a significant positive relationship between board independence and controlling shareholders’ cash-flow rights for firms where the appointee had prior affiliation to the board, but no performance improvement. Firms where the regulatory compliant independent directors had no prior-affiliation to the board experienced significant improvement in firms’ next period Return-on-Assets. Appointing affiliated directors is indicative diminished board quality, which is consistent with the empirical evidence that controlling shareholders determine board quality to accommodate tunneling to extract the private benefits of control to compensate for significant additional costs associated with concentrated ownership (Yeh and Woidtke, 2005; Luo et al, 2012; Liu et al, 2015). The positive association between performance and unaffiliated independent directors suggests a desire to introduce expertise to receive benefits via improved firm performance which is consistent with the literature, mostly from studies of emerging markets, reporting a causal link from independent directors to firm performance (Choi et al, 2007; Dahya et al. 2008; Liu et al, 2015)

Are all regulatory compliant independent director appointments the same? An analysis of Taiwanese board appointments

Globally many regulators adopted a rules-based approach to independent director appointments stipulating ‘independence’ criteria. This paper investigates whether partitioning a regulatory compliant sample of independent director appointments by prior affiliation to the board influences the relationship between ownership and control rights, and performance. We report a significant positive relationship between board independence and controlling shareholders’ cash-flow rights for firms where the appointee had prior affiliation to the board, but no performance improvement. Firms where the regulatory compliant independent directors had no prior-affiliation to the board experienced significant improvement in firms’ next period Return-on-Assets. Appointing affiliated directors is indicative diminished board quality, which is consistent with the empirical evidence that controlling shareholders determine board quality to accommodate tunneling to extract the private benefits of control to compensate for significant additional costs associated with concentrated ownership (Yeh and Woidtke, 2005; Luo et al, 2012; Liu et al, 2015). The positive association between performance and unaffiliated independent directors suggests a desire to introduce expertise to receive benefits via improved firm performance which is consistent with the literature, mostly from studies of emerging markets, reporting a causal link from independent directors to firm performance (Choi et al, 2007; Dahya et al. 2008; Liu et al, 2015)

Generation of Reactive Oxygen Species by Polyenylpyrroles Derivatives Causes DNA Damage Leading to G2/M Arrest and Apoptosis in Human Oral Squamous Cell Carcinoma Cells

10.1371/journal.pone.0067603PLoS ONE86-POLN

Oral Delivery of the Sj23LHD-GST Antigen by Salmonella typhimurium Type III Secretion System Protects against Schistosoma japonicum Infection in Mice

Schistosomiasis japonica is a zoonotic parasitic disease and occurs predominantly in Southeast Asia and China. Using a simple, cheap, yet efficient oral method to deliver the vaccine antigen would benefit to control its transmission in that the oral vaccine could be made into a preparation and mixed with feedstuffs of livestock hosts. In this study, we used an attenuated S. typhimurium strain VNP20009, whose safety has been demonstrated in phase I clinical trial, to express the bivalent Schistosoma japonicum antigen Sj23LHD-GST by an intracellular activated promoter (nirB) and deliver it to host cells through type III secretion system. After oral vaccination of this recombinant strain, efficient protection against S. japonicum challenge was induced in mice. Mean while, granuloma formation in the liver was improved significantly in the immunized mice. This protective immune response was Th1 specific type as evidenced by increase in the production of IL-12 and IFN-γ. This work provides an alternative S. japonicum vaccine for livestock and humans

Wolfberry genomes and the evolution of Lycium (Solanaceae)

AbstractWolfberry Lycium, an economically important genus of the Solanaceae family, contains approximately 80 species and shows a fragmented distribution pattern among the Northern and Southern Hemispheres. Although several herbaceous species of Solanaceae have been subjected to genome sequencing, thus far, no genome sequences of woody representatives have been available. Here, we sequenced the genomes of 13 perennial woody species of Lycium, with a focus on Lycium barbarum. Integration with other genomes provides clear evidence supporting a whole-genome triplication (WGT) event shared by all hitherto sequenced solanaceous plants, which occurred shortly after the divergence of Solanaceae and Convolvulaceae. We identified new gene families and gene family expansions and contractions that first appeared in Solanaceae. Based on the identification of self-incompatibility related-gene families, we inferred that hybridization hotspots are enriched for genes that might be functioning in gametophytic self-incompatibility pathways in wolfberry. Extremely low expression of LOCULE NUBER (LC) and COLORLESS NON-RIPENING (CNR) orthologous genes during Lycium fruit development and ripening processes suggests functional diversification of these two genes between Lycium and tomato. The existence of additional flowering locus C-like MADS-box genes might correlate with the perennial flowering cycle of Lycium. Differential gene expression involved in the lignin biosynthetic pathway between Lycium and tomato likely illustrates woody and herbaceous differentiation. We also provide evidence that Lycium migrated from Africa into Asia, and subsequently from Asia into North America. Our results provide functional insights into Solanaceae origins, evolution and diversification.</jats:p