The determinants of fair value measurements of banks: International evidence

The purpose of this study is to investigate the accounting choice decisions of banks to employ Level 3 inputs in estimating the value of their financial assets and liabilities. Using a sample of 146 bank-year observations from 18 countries over 2009-2012, this study finds banks’ incentives to use Level 3 valuation inputs are associated with both firm-level and country-level determinants. At the firm-level, leverage, profitability (in term of net income), Tier 1 capital ratio, size and audit committee independence are associated with the percentage of Level 3 valuation inputs. At the country-level, economy development, legal region, legal enforcement and investor rights are also associated with the Level 3 classification choice. Lastly, ‘secrecy’, the proxy for culture dimensions and values, is found to be positively associated with the use of Level 3 valuation inputs. Altogether, these findings suggest that banks use the discretion available under Level 3 inputs opportunistically to avoid violating debt covenants limits, to increase earnings and manage their capital ratios. Results of this study also highlight that corporate governance quality at the firm-level (e.g. audit committee independence) and institutional features can constrain banks’ opportunistic behaviors in using the discretion available under Level 3 inputs. The results of this study have important implications for standard setters and contribute to the debate on the use of fair value accounting in an international context.

The determinants of fair value measurements of banks: International evidence

The purpose of this study is to investigate the accounting choice decisions of banks to employ Level 3 inputs in estimating the value of their financial assets and liabilities. Using a sample of 146 bank-year observations from 18 countries over 2009-2012, this study finds banks’ incentives to use Level 3 valuation inputs are associated with both firm-level and country-level determinants. At the firm-level, leverage, profitability (in term of net income), Tier 1 capital ratio, size and audit committee independence are associated with the percentage of Level 3 valuation inputs. At the country-level, economy development, legal region, legal enforcement and investor rights are also associated with the Level 3 classification choice. Lastly, ‘secrecy’, the proxy for culture dimensions and values, is found to be positively associated with the use of Level 3 valuation inputs. Altogether, these findings suggest that banks use the discretion available under Level 3 inputs opportunistically to avoid violating debt covenants limits, to increase earnings and manage their capital ratios. Results of this study also highlight that corporate governance quality at the firm-level (e.g. audit committee independence) and institutional features can constrain banks’ opportunistic behaviors in using the discretion available under Level 3 inputs. The results of this study have important implications for standard setters and contribute to the debate on the use of fair value accounting in an international context.

Corporate philanthropy, reputation risk management and shareholder value: A study of Australian corporate giving

This study examines the role of corporate philanthropy in the management of reputation risk and shareholder value of the top 100 ASX listed Australian firms for the three years 2011-2013. The results of this study demonstrate the business case for corporate philanthropy and hence encourage corporate philanthropy by showing increasing firms’ investment in corporate giving as a percentage of profit before tax, increases the likelihood of an increase in shareholder value. However, the proviso is that firms must also manage their reputation risk at the same time. There is a negative association between corporate giving and shareholder value (Tobin’s Q) which is mitigated by firms’ management of reputation. The economic significance of this result is that for every cent in the dollar the firm spends on corporate giving, Tobin’s Q will decrease by 0.413%. In contrast, if the firm increase their reputation by 1 point then Tobin’s Q will increase by 0.267%. Consequently, the interaction of corporate giving and reputation risk management is positively associated with shareholder value. These results are robust while controlling for potential endogeneity and reverse causality. This paper assists both academics and practitioners by demonstrating that the benefits of corporate philanthropy extend beyond a gesture to improve reputation or an attempt to increase financial performance, to a direct collaboration between all the factors where the benefits far outweigh the costs.

Boundary value problems for third-order nonlinear ordinary differential equations

In this paper, we describe how to analyze boundary value problems for third-order nonlinear ordinary differential equations over an infinite interval. Several physical problems of interest are governed by such systems. The seminumerical schemes described here offer some advantages over solutions obtained by using traditional methods such as finite differences, shooting method, etc. These techniques also reveal the analytic structure of the solution function. For illustrative purposes, several physical problems, mainly drawn from fluid mechanics, are considered; they clearly demonstrate the efficiency of the techniques presented here.

Simulation design in information systems research: example of studying it value cocreation with NK model

As an emerging research method that has showed promising potential in several research disciplines, simulation received relatively few attention in information systems research. This paper illustrates a framework for employing simulation to study IT value cocreation. Although previous studies identified factors driving IT value cocreation, its underlying process remains unclear. Simulation can address this limitation through exploring such underlying process with computational experiments. The simulation framework in this paper is based on an extended NK model. Agent-based modeling is employed as the theoretical basis for the NK model extensions.

Stochastic simulations of the origins and implications of long-tailed distributions in gene expression

Gene expression noise results in protein number distributions ranging from long-tailed to Gaussian. We show how long-tailed distributions arise from a stochastic model of the constituent chemical reactions and suggest that, in conjunction with cooperative switches, they lead to more sensitive selection of a subpopulation of cells with high protein number than is possible with Gaussian distributions. Single-cell-tracking experiments are presented to validate some of the assumptions of the stochastic simulations. We also examine the effect of DNA looping on the shape of protein distributions. We further show that when switches are incorporated in the regulation of a gene via a feedback loop, the distributions can become bimodal. This might explain the bimodal distribution of certain morphogens during early embryogenesis.

Heat-shock protein 70-2 (HSP70-2) expression in bladder urothelial carcinoma is associated with tumour progression and promotes migration and invasion

Purpose: Testis specific heat-shock protein 70-2 (HSP70-2), a member of HSP70 chaperone family, is essential for the growth of spermatocytes and cancer cells. We investigated the association of HSP70-2 expression with clinical behaviour and progression of urothelial carcinoma of bladder. Experimental design: We assessed the HSP70-2 expression by RT-PCR and HSP70-2 protein expression by immunofluorescence, flow cytometry, immunohistochemistry and Western blotting in urothelial carcinoma patient specimens and HTB-1, UMUC-3, HTB-9, HTB-2 and normal human urothelial cell lines. Further, to investigate the role of HSP70-2 in bladder tumour development, HSP70-2 was silenced in the high-grade invasive HTB-1 and UMUC-3 cells. The malignant properties of urothelial carcinoma cells were examined using colony formation, migration assay, invasion assay in vitro and tumour growth in vivo. Results: Our RT-PCR analysis and immunohistochemistry analysis revealed that HSP70-2 was expressed in both moderate to well-differentiated and high-grade invasive urothelial carcinoma cell lines studied and not in normal human urothelial cells. In consistence with these results, HSP70-2 expression was also observed in superficially invasive (70%) and muscle-invasive (90%) patient's tumours. Furthermore, HSP70-2 knockdown significantly suppressed cellular motility and invasion ability. An in vivo xenograft study showed that inhibition of HSP70-2 significantly suppressed tumour growth. Conclusions: In conclusion, our data suggest that the HSP70-2 expression is associated with early spread and progression of urothelial carcinoma of bladder cancer and that HSP70-2 can be the potential therapeutic target for bladder urothelial carcinoma. (C) 2009 Elsevier Ltd. All rights reserved.

Solution of MDPS using simulation-based value iteration

This article proposes a three-timescale simulation based algorithm for solution of infinite horizon Markov Decision Processes (MDPs). We assume a finite state space and discounted cost criterion and adopt the value iteration approach. An approximation of the Dynamic Programming operator T is applied to the value function iterates. This 'approximate' operator is implemented using three timescales, the slowest of which updates the value function iterates. On the middle timescale we perform a gradient search over the feasible action set of each state using Simultaneous Perturbation Stochastic Approximation (SPSA) gradient estimates, thus finding the minimizing action in T. On the fastest timescale, the 'critic' estimates, over which the gradient search is performed, are obtained. A sketch of convergence explaining the dynamics of the algorithm using associated ODEs is also presented. Numerical experiments on rate based flow control on a bottleneck node using a continuous-time queueing model are performed using the proposed algorithm. The results obtained are verified against classical value iteration where the feasible set is suitably discretized. Over such a discretized setting, a variant of the algorithm of [12] is compared and the proposed algorithm is found to converge faster.

Boundary value problems for third-order nonlinear ordinary differential equations

In this paper, we describe how to analyze boundary value problems for third-order nonlinear ordinary differential equations over an infinite interval. Several physical problems of interest are governed by such systems. The seminumerical schemes described here offer some advantages over solutions obtained by using traditional methods such as finite differences, shooting method, etc. These techniques also reveal the analytic structure of the solution function. For illustrative purposes, several physical problems, mainly drawn from fluid mechanics, are considered; they clearly demonstrate the efficiency of the techniques presented here.

Array-based gene expression, CGH and tissue data defines a 12q24 gain in neuroblastic tumors with prognostic implication

Neuroblastoma has successfully served as a model system for the identification of neuroectoderm-derived oncogenes. However, in spite of various efforts, only a few clinically useful prognostic markers have been found. Here, we present a framework, which integrates DNA, RNA and tissue data to identify and prioritize genetic events that represent clinically relevant new therapeutic targets and prognostic biomarkers for neuroblastoma.

Effect of boundary condition description on convergence of solution in a boundary-value problem

It is well known that the numerical accuracy of a series solution to a boundary-value problem by the direct method depends on the technique of approximate satisfaction of the boundary conditions and on the stage of truncation of the series. On the other hand, it does not appear to be generally recognized that, when the boundary conditions can be described in alternative equivalent forms, the convergence of the solution is significantly affected by the actual form in which they are stated. The importance of the last aspect is studied for three different techniques of computing the deflections of simply supported regular polygonal plates under uniform pressure. It is also shown that it is sometimes possible to modify the technique of analysis to make the accuracy independent of the description of the boundary conditions.

Vibrational analysis of the (B2P{cyrillic}→X2P{cyrillic}) system of NS

A few red degraded bands attributable to NS have been reported earlier by Fowler and Barker, Dressler and Barrow et al, and they occur in the same region (2300 to 2700 Å) as the bands of the known systems (C2∑+-X2P{cyrillic}) and (A2Δ-X2P{cyrillic}). Measurements made on the heads of some of these weak bands led Barrow et al. to believe that these bands may form a system analogous to the β-system of NO and be due to a2P{cyrillic}-2P{cyrillic} transition. The spectrum of NS has now been studied in a little more detail by means of an uncondensed discharge through dry nitrogen and sulphur vapour in the presence of argon and thirty three bands belonging to this system have been recorded in the region 2280 to 2760 Å. It has been found possible to represent the band heads by means of the equation {Mathematical expression}. Taking the lower state doublet interval as 223 cm-1, it is shown that the separation in the upper state is 94 cm-1. The ratio of the force constants in the upper and the ground states is found to be 0·39 and is nearly the same as that in the β-system of NO (0·30). The present vibrational analysis therefore supports the view that these new red degraded bands of NS arise from a (B2P{cyrillic}→X2P{cyrillic}) transition and the observed intensity distribution in the form of a wide parabola is also in qualitative agreement with what is expected from the moderately large Δ re (∼0·12Å) value.

Expression of lactate transporters MCT1, MCT2, MCT4 and the ancillary protein CD147 in horse muscle and red blood cells

Monocarboxylate transporters (MCTs) transport lactate and protons across cell membranes. During intense exercise, lactate and protons accumulate in the exercising muscle and are transported to the plasma. In the horse, MCTs are responsible for the majority of lactate and proton removal from exercising muscle, and are therefore also the main mechanism to hinder the decline in pH in muscle cells. Two isoforms, MCT1 and MCT4, which need an ancillary protein CD147, are expressed in equine muscle. In the horse, as in other species, MCT1 is predominantly expressed in oxidative fibres, where its likely role is to transport lactate into the fibre to be used as a fuel at rest and during light work, and to remove lactate during intensive exercise when anaerobic energy production is needed. The expression of CD147 follows the fibre type distribution of MCT1. These proteins were detected in both the cytoplasm and sarcolemma of muscle cells in the horse breeds studied: Standardbred and Coldblood trotters. In humans, training increases the expression of both MCT1 and MCT4. In this study, the proportion of oxidative fibres in the muscle of Norwegian-Swedish Coldblood trotters increased with training. Simultaneously, the expression of MCT1 and CD147, measured immunohistochemically, seemed to increase more in the cytoplasm of oxidative fibres than in the fast fibre type IIB. Horse MCT4 antibody failed to work in immunohistochemistry. In the future, a quantitative method should be introduced to examine the effect of training on muscle MCT expression in the horse. Lactate can be taken up from plasma by red blood cells (RBCs). In horses, two isoforms, MCT1 and MCT2, and the ancillary protein CD147 are expressed in RBC membranes. The horse is the only species studied in which RBCs have been found to express MCT2, and the physiological role of this protein in RBCs is unknown. The majority of horses express all three proteins, but 10-20% of horses express little or no MCT1 or CD147. This leads to large interindividual variation in the capacity to transport lactate into RBCs. Here, the expression level of MCT1 and CD147 was bimodally distributed in three studied horse breeds: Finnhorse, Standardbred and Thoroughbred. The level of MCT2 expression was distributed unimodally. The expression level of lactate transporters could not be linked to performance markers in Thoroughbred racehorses. In the future, better performance indexes should be developed to better enable the assessment of whether the level of MCT expression affects athletic performance. In human subjects, several mutations in MCT1 have been shown to cause decreased lactate transport activity in muscle and signs of myopathy. In the horse, two amino acid sequence variations, one of which was novel, were detected in MCT1 (V432I and K457Q). The mutations found in horses were in different areas compared to mutations found in humans. One mutation (M125V) was detected in CD147. The mutations found could not be linked with exercise-induced myopathy. MCT4 cDNA was sequenced for the first time in the horse, but no mutations could be detected in this protein.

Prognostic significance of cyclooxygenase-2 and associated molecules in gastric cancer

Background and aims: Low stage and curative surgery are established factors for improved survival in gastric cancer. However, not all low-stage patients have a good prognosis. Cyclooxygenase-2 (COX-2) is known to associate with reduced survival in several cancers, and has been shown to play an important role in gastric carcinogenesis. Since new and better prognostic markers are needed for gastric cancer, we studied the prognostic significance of COX-2 and of markers that associate with COX-2 expression. We also studied markers reflecting proliferation and apoptosis, and evaluated their association with COX-2. Our purpose was to construct an accurate prognostic model by combining tissue markers and clinicopathogical factors. Materials and methods: Of 342 consecutive patients who underwent surgery for gastric cancer at Meilahti Hospital, Helsinki University Central Hospital, 337 were included in this study. Low stages I to II were represented by 141 (42%) patients, and high stages III to IV by 196 (58%). Curative surgery was performed on 176 (52%) patients. Survival data were obtained from the national registers. Slides from archive tissue blocks were prepared for immunohistochemistry by use of COX-2, human antigen R (HuR), cyclin A, matrix metalloproteinases 2 and 9 (MMP-2, MMP-9), and Ki-67 antibodies. Immunostainings were scored by microscopy, and scores were entered into a database. Associations of tumor markers with clinicopathological factors were calculated, as well as associations with p53, p21, and results of flow cytometry from earlier studies. Survival analysis was performed by the Kaplan-Meier method, and Cox multivariate models were reconstructed. Cell culture experiments were performed to explore the effect of small interfering (si)RNA of HuR on COX-2 expression in a TMK-1 gastric cancer cell line. Results: Overall 5-year survival was 35.1%. Study I showed that COX-2 was an independent prognostic factor, and that the prognostic impact of COX-2 was more pronounced in low-stage patients. Cytoplasmic HuR expression also associated with reduced survival in gastric cancer patients in a non-independent manner. Cell culture experiments showed that HuR can regulate COX-2 expression in TMK-1 cells in vitro, with an association also between COX-2 and HuR tissue expression in a clinical material. In Study II, cyclin A was an independent prognostic factor and was associated with HuR expression in the gastric cancer material. The results of Study III showed that epithelial MMP-2 associated with survival in univariate, but not in multivariate analysis. However, MMP-9 showed no prognostic value. MMP-2 expression was associated with COX-2 expression. In Study IV, the prognostic power of COX-2 was compared with that of all tested markers associated with survival in Studies I to III, as well as with p21, p53, and flow cytometry results. COX-2 and p53 were independent prognostic factors, and COX-2 expression was associated with that of p53 and Ki-67 and also with aneuploidy. Conclusions: COX-2 is an independent prognostic factor in gastric cancer, and its prognostic power emerges especially in low stage cancer. COX-2 is regulated by HuR, and is associated with factors reflecting invasion, proliferation, and apoptosis. In an extended multivariate model, COX-2 retained its position as an independent prognosticator. COX-2 can be considered a promising new prognostic marker in gastric cancer.

Prognostic importance of the tumour microenvironment in follicular lymphoma patients treated with immunochemotherapy

Follicular lymphoma (FL) is the second most common non-Hodgkin lymphoma. It is an indolent and clinically heterogeneous disease, which is generally considered incurable. Currently, immunochemotherapy has significantly improved the outcome of FL patients. This is based on the combination of rituximab, a monoclonal anti-CD20 antibody, with chemotherapy, and is used at present as a standard first-line therapy in FL. Thus far, however, patients have been selected for treatment based on clinical risk factors and indices that were developed before the rituximab era. Therefore, there is a growing need to understand the molecular mechanisms underlying the disease, which would not only provide information to predict survival in the rituximab era, but also enable the design of more targeted therapeutic strategies. In this study, our aim was to identify genes predicting the outcome in FL patients treated with immunochemotherapy. Thus, we performed a cDNA microarray with 24 FL patients. When gene expression differences from diagnostic tumour samples were related to the clinical outcome, we identified novel genes with a prognostic impact on survival. The expression of selected genes was further characterized with quantitative PCR and immunohistochemistry (IHC). Interestingly, the prognostic influence of these genes was often associated with their expression in non-malignant cells instead of tumour cells. Based on the observed gene expression patterns, we analyzed the abundance and prognostic value of non-malignant immune cells in 95-98 FL patients treated with immunochemotherapy. We observed that a high content of tumour-associated macrophages was a marker of a favourable prognosis. In contrast, the accumulation of mast cells correlated with a poor outcome and was further associated with tumour vascularity. Increased microvessel density also correlated with an inferior outcome. In addition, we used the same microarray data with a systems biology approach to identify signalling pathways or groups of genes capable of separating patients with favourable or adverse outcomes. Among the transcripts, there were many genes associated with signal transducers and activators of the transcription (STAT5a) pathway. When IHC was used as validation, STAT5a expression was mostly observed in T-cells and follicular dendritic cells, and expression was found to predict a favourable outcome. In cell cultures, rituximab was observed to induce the expression of STAT5a-associated interleukins in human lymphoma cell lines, which might provide a possible link for the cross-talk between rituximab-induced FL cells and their microenvironment. In conclusion, we have demonstrated that the microenvironment has a prognostic role in FL patients treated with immunochemotherapy. The results also address the importance of re-evaluating the prognostic markers in the rituximab era of lymphoma therapies.