Corporate Governance in China (summary section only)

The negative relationship between economic growth and stock market return is not an anomaly according to evidence documented in many economies. It is argued that future economic growth is largely irrelevant for predicting future equity returns, since long-run equity returns depend mainly on dividend yields and the growth of per share dividends. The economic growth does result in a higher standard of living for consumers, but does not necessarily translate into higher returns for owners of the capital. The divergence in performance between the real sector and stock markets appears to support the above argument. However, this thesis strives to offer an alternative explanation to the apparent divergence within the framework of corporate governance. It argues that weak corporate governance standards in Chinese listed firms exacerbated by poor inventor protection results into a marginalized capital market. Each of the three essays in the thesis addresses one particular aspect of corporate governance on the Chinese stock market in a sequential way through gathering empirical evidence on three distinctive stock market activities. The first essay questions whether significant agency conflicts do exist by building a game on rights issues. It documents significant divergence in interests among shareholders holding different classes of shares. The second essay investigates the level of agency costs by examining value of control through constructing a sample of block transactions. It finds that block transactions that transfer ultimate control entail higher premiums. The third essay looks into possible avenues through which corporate governance standards could be improved by investigating the economic consequences of cross-listing on the Chinese stock market. It finds that, by adopting a higher disclosure standard through cross-listings, firms voluntarily commit themselves to reducing information asymmetry, and consequently command higher valuation than their counterparts.

Early detection of type 2 diabetes mellitus in Chinese and Indian adult population

Objectives of this study were to determine secular trends of diabetes prevalence in China and develop simple risk assessment algorithms for screening individuals with high-risk for diabetes or with undiagnosed diabetes in Chinese and Indian adults. Two consecutive population based surveys in Chinese and a prospective study in Mauritian Indians were involved in this study. The Chinese surveys were conducted in randomly selected populations aged 20-74 years in 2001-2002 (n=14 592) and 35-74 years in 2006 (n=4416). A two-step screening strategy using fasting capillary plasma glucose (FCG) as first-line screening test followed by standard 2-hour 75g oral glucose tolerance tests (OGTTs) was applied to 12 436 individuals in 2001, while OGTTs were administrated to all participants together with FCG in 2006 and to 2156 subjects in 2002. In Mauritius, two consecutive population based surveys were conducted in Mauritian Indians aged 20-65 years in 1987 and 1992; 3094 Indians (1141 men), who were not diagnosed as diabetes at baseline, were reexamined with OGTTs in 1992 and/or 1998. Diabetes and pre-diabetes was defined following 2006 World Health Organization/ International Diabetes Federation Criteria. Age-standardized, as well as age- and sex-specific, prevalence of diabetes and pre-diabetes in adult Chinese was significantly increased from 12.2% and 15.4% in 2001 to 16.0% and 21.2% in 2006, respectively. A simple Chinese diabetes risk score was developed based on the data of Chinese survey 2001-2002 and validated in the population of survey 2006. The risk scores based on β coefficients derived from the final Logistic regression model ranged from 3 – 32. When the score was applied to the population of survey 2006, the area under operating characteristic curve (AUC) of the score for screening undiagnosed diabetes was 0.67 (95% CI, 0.65-0.70), which was lower than the AUC of FCG (0.76 [0.74-0.79]), but similar to that of HbA1c (0.68 [0.65-0.71]). At a cut-off point of 14, the sensitivity and specificity of the risk score in screening undiagnosed diabetes was 0.84 (0.81-0.88) and 0.40 (0.38-0.41). In Mauritian Indian, body mass index (BMI), waist girth, family history of diabetes (FH), and glucose was confirmed to be independent risk predictors for developing diabetes. Predicted probabilities for developing diabetes derived from a simple Cox regression model fitted with sex, FH, BMI and waist girth ranged from 0.05 to 0.64 in men and 0.03 to 0.49 in women. To predict the onset of diabetes, the AUC of the predicted probabilities was 0.62 (95% CI, 0.56-0.68) in men and 0.64(0.59-0.69) in women. At a cut-off point of 0.12, the sensitivity and specificity was 0.72(0.71-0.74) and 0.47(0.45-0.49) in men; and 0.77(0.75-0.78) and 0.50(0.48-0.52) in women, respectively. In conclusion, there was a rapid increase in prevalence of diabetes in Chinese adults from 2001 to 2006. The simple risk assessment algorithms based on age, obesity and family history of diabetes showed a moderate discrimination of diabetes from non-diabetes, which may be used as first line screening tool for diabetes and pre-diabetes, and for health promotion purpose in Chinese and Indians.

Serum uric acid and metabolic risk factors in three ethnic groups: Asian Indians and Creoles in Mauritius and Chinese in Qingdao, China

In humans with a loss of uricase the final oxidation product of purine catabolism is uric acid (UA). The prevalence of hyperuricemia has been increasing around the world accompanied by a rapid increase in obesity and diabetes. Since hyperuricemia was first described as being associated with hyperglycemia and hypertension by Kylin in 1923, there has been a growing interest in the association between elevated UA and other metabolic abnormalities of hyperglycemia, abdominal obesity, dyslipidemia, and hypertension. The direction of causality between hyperuricemia and metabolic disorders, however, is unceartain. The association of UA with metabolic abnormalities still needs to be delineated in population samples. Our overall aims were to study the prevalence of hyperuricemia and the metabolic factors clustering with hyperuricemia, to explore the dynamical changes in blood UA levels with the deterioration in glucose metabolism and to estimate the predictive capability of UA in the development of diabetes. Four population-based surveys for diabetes and other non-communicable diseases were conducted in 1987, 1992, and 1998 in Mauritius, and in 2001-2002 in Qingdao, China. The Qingdao study comprised 1 288 Chinese men and 2 344 women between 20-74, and the Mauritius study consisted of 3 784 Mauritian Indian and Mauritian Creole men and 4 442 women between 25-74. In Mauritius, re-exams were made in 1992 and/or 1998 for 1 941 men (1 409 Indians and 532 Creoles) and 2 318 non pregnant women (1 645 Indians and 673 Creoles), free of diabetes, cardiovascular diseases, and gout at baseline examinations in 1987 or 1992, using the same study protocol. The questionnaire was designed to collect demographic details, physical examinations and standard 75g oral glucose tolerance tests were performed in all cohorts. Fasting blood UA and lipid profiles were also determined. The age-standardized prevalence in Chinese living in Qingdao was 25.3% for hyperuricemia (defined as fasting serum UA > 420 μmol/l in men and > 360 μmol/l in women) and 0.36% for gout in adults between 20-74. Hyperuricemia was more prevalent in men than in women. One standard deviation increase in UA concentration was associated with the clustering of metabolic risk factors for both men and women in three ethnic groups. Waist circumference, body mass index, and serum triglycerides appeared to be independently associated with hyperuricemia in both sexes and in all ethnic groups except in Chinese women, in whom triglycerides, high-density lipoprotein cholesterol, and total cholesterol were associated with hyperuricemia. Serum UA increased with increasing fasting plasma glucose levels up to a value of 7.0 mmol/l, but significantly decreased thereafter in mainland Chinese. An inverse relationship occurred between 2-h plasma glucose and serum UA when 2-h plasma glucose higher than 8.0 mmol/l. In the prospective study in Mauritius, 337 (17.4%) men and 379 (16.4%) women developed diabetes during the follow-up. Elevated UA levels at baseline increased 1.14-fold in risk of incident diabetes in Indian men and 1.37-fold in Creole men, but no significant risk was observed in women. In conclusion, the prevalence of hyperuricemia was high in Chinese in Qingdao, blood UA was associated with the clustering of metabolic risk factors in Mauritian Indian, Mauritian Creole, and Chinese living in Qingdao, and a high baseline UA level independently predicted the development of diabetes in Mauritian men. The clinical use of UA as a marker of hyperglycemia and other metabolic disorders needs to be further studied. Keywords: Uric acid, Hyperuricemia, Risk factors, Type 2 Diabetes, Incidence, Mauritius, Chinese

Homeowners' Associations in Russia after the 2005 Housing Reform

The thesis examines homeowners associations as a part of the large-scale housing reform, implemented in Russia since 2005. The reform transferred housing management from the public sector to the private sector and to the citizens responsibility. The reform is a continuation to the privatisation of the housing stock that was started in Russia in the beginning of the 1990s, aiming to build a market-oriented housing sector in the country. The reform makes a fundamental change to the Soviet system, in which ownership along with management and maintenance of housing were monopolised by the state. Homeowners are now responsible for the management of the common areas in privatised houses, which is often realised by establishing a homeowners association. Homeowners associations are examined by using the so-called common-pool resource regime approach, with the main question being the ways in which taking care of common property collectively succeeds in practice. The study is based on interview data of St. Petersburg s homeowners associations. Using the common-pool resource theory the study demonstrates why implementation of the housing reform has not succeeded as expected. Certain elements that characterise a successful common-pool resource regime do not fulfill sufficiently in St. Petersburg s homeowners associations. Firstly, free-riding, that is, withdrawal from the association s joint decision-making and not making the housing payments is common, as effective sanctions to prevent it are missing in the legislation. That is, eviction or expelling a non-paying member from the association is not possible. Secondly, ownership of the land plot and common areas of the house, such as basements and attics, are often disputed between the associations and authorities. In the Soviet era, these common areas were public property along with the apartments, but in privatised houses they should, according to the legislation, belong to the associations property. Thirdly, solution of disputes between the associations and authorities and within the associations is difficult, as the court system tends to be bureaucratic and inefficient. In addition to the common-pool resource approach, the study also examines how social capital contributes to the associations effectiveness and democratic governance. The study finds that although homeowners associations have increased cooperation and tightened social relations between neighbours, social capital has not been able to prevent free-riding. The study shows that unlike it is often claimed, the so-called Soviet mentality , that is, residents passiveness and unwillingness to participate, is not the most important obstacle to the reform. Instead, the reform is impeded most of all by imperfect institutional arrangements and local authorities that prevent the associations from working as independent, self-governing associations.

Tax Reform and Payout Policy:Do Shareholder Clienteles or Payout Policy Adjust?

Changes in taxation of corporate dividends offer excellent opportunities to study dividend clientele effects. We explore payout policies and ownership structures around a major tax reform that took place in Finland in 2004. Consistent with dividend clienteles affecting firms’ dividend policy decisions, we find that Finnish firms altered their dividend policies based on the changed tax incentives of their largest shareholders. While firms adjust their payout policies, our results also indicate that ownership structures of Finnish firms also changed around the 2004 reform, consistent with shareholder clienteles adjusting to the new tax system.

Panel Cointegration of Chinese A and B Shares

This paper uses panel unit root and cointegration methods to test the stationarity of the premium on domestic investors’ A shares over foreign investors’ B shares and cointegration between the A and B share prices on the Chinese stock exchanges. We find that the A share price premium is nonstationary until 2001, when the A and B share markets were partially merged, and that the A and B share prices are cointegrated in the panel.Cointegration is more likely to be found for firms in the service sector and for firms that issued B shares recently.

Genetic and epigenetic mechanisms of tumor predisposition in hereditary non-polyposis colorectal carcinoma and sporadic cancers

Individuals with inherited deficiency in DNA mismatch repair(MMR) (Lynch syndrome) LS are predisposed to different cancers in a non-random fashion. Endometrial cancer (EC) is the most common extracolonic malignancy in LS. LS represents the best characterized form of hereditary nonpolyposis colorectal carcinoma (HNPCC). Other forms of familial non-polyposis colon cancer exist, including familial colorectal cancer type X (FCCX). This syndrome resembles LS, but MMR gene defects are excluded and the predisposition genes are unknown so far. To address why different organs are differently susceptible to cancer development, we examined molecular similarities and differences in selected cancers whose frequency varies in LS individuals. Tumors that are common (colorectal, endometrial, gastric) and less common (brain, urological) in LS were characterized for MMR protein expression, microsatellite instability (MSI), and by altered DNA methylation. We also studied samples of histologically normal endometrium, endometrial hyperplasia,and cancer for molecular alterations to identify potential markers that could predict malignant transformation in LS and sporadic cases. Our results suggest that brain and kidney tumors follow a different pathway for cancer development than the most common LS related cancers.Our results suggest also that MMR defects are detectable in endometrial tissues from a proportion of LS mutation carriers prior to endometrial cancer development. Traditionally (complex) atypical hyperplasia has been considered critical for progression to malignancy. Our results suggest that complex hyperplasia without atypia is equally important as a precursor lesion of malignancy. Tumor profiles from Egypt were compared with colorectal tumors from Finland to evaluate if there are differences specific to the ethnic origin (East vs.West). Results showed for the first time a distinct genetic and epigenetic signature in the Egyptian CRC marked by high methylation of microsatellite stable tumors associated with advanced stage, and low frequency of Wnt signaling activation, suggesting a novel pathway. DNA samples from FCCX families were studied with genome wide linkage analysis using microsatellite markers. Selected genes from the linked areas were tested for possible mutations that could explain predisposition to a large number of colon adenomas and carcinomas seen in these families. Based on the results from the linkage analysis, a number of areas with tentative linkage were identified in family 20. We narrowed down these areas by additional microsatellite markers to found a mutation in the BMPR1A gene. Sequencing of an additional 17 FCCX families resulted in a BMPR1A mutation frequency of 2/18 families (11%). Clarification of the mechanisms of the differential tumor susceptibility in LS increases the understanding of gene and organ specific targets of MMR deficiency. While it is generally accepted that widespread MMR deficiency and consequent microsatellite instability (MSI) drives tumorigenesis in LS, the timing of molecular alterations is controversial. In particular, it is important to know that alterations may occur several years before cancer formation, at stages that are still histologically regarded as normal. Identification of molecular markers that could predict the risk of malignant transformation may be used to improve surveillance and cancer prevention in genetically predisposed individuals. Significant fractions of families with colorectal and/or endometrial cancer presently lack molecular definition altogether. Our findings expand the phenotypic spectrum of BMPR1A mutations and, for the first time, link FCCX families to the germline mutation of a specific gene. In particular, our observations encourage screening of additional families with FCCX for BMPR1A mutation, which is necessary in obtaining a reliable estimate of the share of BMPR1A-associated cases among all FCCX families worldwide. Clinically, the identification of predisposing mutations enables targeted cancer prevention in proven mutation carriers and thereby reduces cancer morbidity and mortality in the respective families.