The impact of executive incentives on detection of investment opportunities and performance: the case of Chinese listed companies

Since the reform and opening up in 1978, China has realized a significant transition from a centrally planned to a market economy. The reform of the income distribution system is of great significance for promoting this transformation. For private enterprises as its mainstay, the market valuation and the stock performance depend largely on the future investment opportunities of the enterprises, and whether they can grasp investment opportunities and create new growth opportunities in the future is highly dependent on the decision-making ability of their executives. The existing research on the incentive effect of corporate executives mainly focuses on the evaluation of business performance based on financial indicators and there still is a lack of more in-depth examination of the effect of executives grasping and creating investment opportunities, which is key to the incentive for corporate executives. Based on the definition of related concepts and literature review, this thesis analyzes 2,533 non-financial A-share listed companies in Shanghai and Shenzhen stock markets from 2004 to 2013. Through descriptive statistics and Fama-Macbeth cross-sectional two-step regression method it first tests the regulating effect of investment opportunities on the returnvolatility relationship, and then two types of executive incentives, i.e. equity-based incentive and cash-based incentive, by comparing the regulating effect of investment opportunities with or without incentives, and under different incentive strengths. The results show that, consistent with the existing empirical results, the change of individual stock volatility has a significant positive relationship with the stock return, and this positive relationship is more obvious in enterprises with more future investment opportunities. Further, the results obtained by grouping the method of executive incentives and the incentive strength show that the higher the strength of executive incentives (especially equity-based incentives) is, the more obvious the role of investment opportunities is in strengthening the positive relationship between volatility of individual stocks and stock returns. It is showed that executive incentives can help companies grasp or create more investment opportunities, and thus allow capital market valuation of investment opportunities to be reflected by the relationship between the changes in individual stock volatility and stock returns. The research results not only provide a new test for the impact of executive incentives on capital market valuation, however also point out that the grasp and creation of investment opportunities is the key to implementing equity-based incentives among executives.Desde a reforma e abertura de 1978, a China fez uma significativa transformação de uma economia planificada para uma economia de mercado. A reforma do sistema de distribuição de rendimento tem um grande significado na promoção desta transformação. Sendo as empresas privadas o principal esteio da economia de mercado, a valorização e o desempenho das ações dependem essencialmente das oportunidades de investimento futuras e da capacidade de explorar e criar novas oportunidades no futuro, o que é altamente dependente da capacidade de decisão dos seus gestores. A investigação atual sobre o efeito dos incentivos dos gestores foca-se essencialmente na avaliação do desempenho financeiro baseado em indicadores financeiros. Existe uma lacuna na investigação do efeito da capacidade dos gestores em compreender e criar oportunidades de investimento, o que deve ser um elemento chave para os incentivos dos gestores. Com base na definição dos conceitos relacionados e na revisão da literatura, este estudo analisa 2.533 empresas cotadas tipo A, não financeiras, registadas nas bolsas de Shanghai e Shenzhen, entre 2004 e 2013, através de estatística descritiva e do método de regressão em duas etapas de Fama-Macbeth. Começa por testar o efeito regulador das oportunidades de investimento na relação entre rendibilidade e volatilidade e, a seguir, analisa os incentivos baseados na posse de ações e na remuneração em dinheiro, comparando o efeito regulador das oportunidades de investimento com e sem incentivos e sob diferentes níveis dos incentivos. Os resultados mostram que, à semelhança de anteriores estudos empíricos, a mudança de volatilidade de ações individuais tem uma relação positiva e significativa com a rendibilidade e esta relação é mais intensa para empresas com maiores oportunidades de investimento futuras. Para além disso, os resultados obtidos agrupando o método de incentivos e a sua intensidade, mostram que, quanto maior o peso dos incentivos (especialmente os baseados na posse de ações) maior o impacto das oportunidades de investimento no reforço da relação positiva entre volatilidade e rendibilidade. Verifica-se que os incentivos dos gestores ajudam as empresas a identificar e criar maiores oportunidades de investimento, permitindo assim que as avaliações pelo mercado das oportunidades de investimento se reflitam na relação entre volatilidade e rendibilidade das ações. Os resultados desta investigação fornecem um novo teste do impacto dos incentivos dos gestores na valorização do mercado de capitais, confirmando também que a identificação e criação de oportunidades de investimento são essenciais para a implementação de incentivos baseados na posse de ações pelos gestores

A Semianalytical Model Using MODIS Data to Estimate Cell Density of Red Tide Algae (Aureococcus anophagefferens)

A multiband and a single-band semianalytical model were developed to predict algae cell density distribution. The models were based on cell density (N) dependent parameterizations of the spectral backscattering coefficients, b ( ), obtained from in situ measurements. There was a strong relationship between b ( ) and N, with a minimum regression coefficient of 0.97 at 488 nm and a maximum value of 0.98 at other bands. The cell density calculated by the multiband inversion model was similar to the field measurements of the coastal waters (the average relative error was only 8.9%), but it could not accurately discern the red tide from mixed pixels, and this led to overestimation of the area affected by the red tide. While the single-band inversion model is less precise than the former model in the high chlorophyll water, it could eliminate the impact of the suspended sediments and make more accurate estimates of the red tide area. We concluded that the two models both have advantages and disadvantages; these methods lay the foundation for developing a remote sensing forecasting system for red tides

A Semianalytical Model Using MODIS Data to Estimate Cell Density of Red Tide Algae ( Aureococcus anophagefferens

A multiband and a single-band semianalytical model were developed to predict algae cell density distribution. The models were based on cell density (N) dependent parameterizations of the spectral backscattering coefficients, bb(λ), obtained from in situ measurements. There was a strong relationship between bb(λ) and N, with a minimum regression coefficient of 0.97 at 488 nm and a maximum value of 0.98 at other bands. The cell density calculated by the multiband inversion model was similar to the field measurements of the coastal waters (the average relative error was only 8.9%), but it could not accurately discern the red tide from mixed pixels, and this led to overestimation of the area affected by the red tide. While the single-band inversion model is less precise than the former model in the high chlorophyll water, it could eliminate the impact of the suspended sediments and make more accurate estimates of the red tide area. We concluded that the two models both have advantages and disadvantages; these methods lay the foundation for developing a remote sensing forecasting system for red tides

Spin Relaxation in Single Layer Graphene with Tunable Mobility

Graphene is an attractive material for spintronics due to theoretical predictions of long spin lifetimes arising from low spin-orbit and hyperfine couplings. In experiments, however, spin lifetimes in single layer graphene (SLG) measured via Hanle effects are much shorter than expected theoretically. Thus, the origin of spin relaxation in SLG is a major issue for graphene spintronics. Despite extensive theoretical and experimental work addressing this question, there is still little clarity on the microscopic origin of spin relaxation. By using organic ligand-bound nanoparticles as charge reservoirs to tune mobility between 2700 and 12000 cm2/Vs, we successfully isolate the effect of charged impurity scattering on spin relaxation in SLG. Our results demonstrate that while charged impurities can greatly affect mobility, the spin lifetimes are not affected by charged impurity scattering.Comment: 13 pages, 5 figure

Pilot-Scale Anaerobic Treatment of Printing and Dyeing Wastewater and Performance Prediction Based on Support Vector Regression

Printing and dyeing wastewater is characterized with complex water quality and poor biodegradability. In this study, a pilot-scale anaerobic baffled reactor (ABR) with packing was verified to effectively degrade the complex organic pollutants in the wastewater through the hydrolysis and acidification of anaerobic microorganisms. At a hydraulic retention time (HRT) of 12 h and an organic loading rate (OLR) of 2.0–2.5 kg COD/(m3·d), the ABR stabilized the fluctuation range of pH and achieved an average colority removal rate of 10.5%, which provided favorable conditions for subsequent aerobic treatment. During the early operation period, the reactor increased the alkalinity of the wastewater; after 97 days of operation, the volatile fatty acid (VFA) content in the wastewater decreased. To demonstrate the suitability of the support vector regression (SVR) technology in predicting the performance of the reactor, two SVR algorithms with three kernel functions were employed to relate the chemical oxygen demand (COD) removal rate to its influencing factors, and the predictions of both the training and validation groups agreed with the measurements. The results obtained from this study can contribute to the design and optimal operation of the anaerobic treatment project of the industrial wastewater treatment plant

Robust Simulations of Nanoscale Phase Change Memory: Dynamics and Retention

A robust simulation framework was developed for nanoscale phase change memory (PCM) cells. Starting from the reaction rate theory, the dynamic nucleation was simulated to capture the evolution of the cluster population. To accommodate the non-uniform critical sizes of nuclei due to the non-isothermal conditions during PCM cell programming, an improved crystallization model was proposed that goes beyond the classical nucleation and growth model. With the above, the incubation period in which the cluster distributions reached their equilibrium was captured beyond the capability of simulations with a steady-state nucleation rate. The implications of the developed simulation method are discussed regarding PCM fast SET programming and retention. This work provides the possibility for further improvement of PCM and integration with CMOS technology