Three essays in international finance

Executive Summary The first essay of this dissertation investigates whether greater exchange rate uncertainty (i.e., variation over time in the exchange rate) fosters or depresses the foreign investment of multinational firms. In addition to the direct capital financing it supplies, foreign investment can be a source of valuable technology and know-how, which can have substantial positive effects on a host country's economic growth. Thus, it is critically important for policy makers and central bankers, among others, to understand how multinationals base their investment decisions on the characteristics of foreign exchange markets. In this essay, I first develop a theoretical framework to improve our knowledge regarding how the aggregate level of foreign investment responds to exchange rate uncertainty when an economy consists of many firms, each of which is making decisions. The analysis predicts a U-shaped effect of exchange rate uncertainty on the total level of foreign investment of the economy. That is, the effect is negative for low levels of uncertainty and positive for higher levels of uncertainty. This pattern emerges because the relationship between exchange rate volatility and 'the probability of investment is negative for firms with low productivity at home (i.e., firms that find it profitable to invest abroad) and the relationship is positive for firms with high productivity at home (i.e., firms that prefer exporting their product). This finding stands in sharp contrast to predictions in the existing literature that consider a single firm's decision to invest in a unique project. The main contribution of this research is to show that the aggregation over many firms produces a U-shaped pattern between exchange rate uncertainty and the probability of investment. Using data from industrialized countries for the period of 1982-2002, this essay offers a comprehensive empirical analysis that provides evidence in support of the theoretical prediction. In the second essay, I aim to explain the time variation in sovereign credit risk, which captures the risk that a government may be unable to repay its debt. The importance of correctly evaluating such a risk is illustrated by the central role of sovereign debt in previous international lending crises. In addition, sovereign debt is the largest asset class in emerging markets. In this essay, I provide a pricing formula for the evaluation of sovereign credit risk in which the decision to default on sovereign debt is made by the government. The pricing formula explains the variation across time in daily credit spreads - a widely used measure of credit risk - to a degree not offered by existing theoretical and empirical models. I use information on a country's stock market to compute the prevailing sovereign credit spread in that country. The pricing formula explains a substantial fraction of the time variation in daily credit spread changes for Brazil, Mexico, Peru, and Russia for the 1998-2008 period, particularly during the recent subprime crisis. I also show that when a government incentive to default is allowed to depend on current economic conditions, one can best explain the level of credit spreads, especially during the recent period of financial distress. In the third essay, I show that the risk of sovereign default abroad can produce adverse consequences for the U.S. equity market through a decrease in returns and an increase in volatility. The risk of sovereign default, which is no longer limited to emerging economies, has recently become a major concern for financial markets. While sovereign debt plays an increasing role in today's financial environment, the effects of sovereign credit risk on the U.S. financial markets have been largely ignored in the literature. In this essay, I develop a theoretical framework that explores how the risk of sovereign default abroad helps explain the level and the volatility of U.S. equity returns. The intuition for this effect is that negative economic shocks deteriorate the fiscal situation of foreign governments, thereby increasing the risk of a sovereign default that would trigger a local contraction in economic growth. The increased risk of an economic slowdown abroad amplifies the direct effect of these shocks on the level and the volatility of equity returns in the U.S. through two channels. The first channel involves a decrease in the future earnings of U.S. exporters resulting from unfavorable adjustments to the exchange rate. The second channel involves investors' incentives to rebalance their portfolios toward safer assets, which depresses U.S. equity prices. An empirical estimation of the model with monthly data for the 1994-2008 period provides evidence that the risk of sovereign default abroad generates a strong leverage effect during economic downturns, which helps to substantially explain the level and the volatility of U.S. equity returns.

Physicochemical aspects and efficiency of albuterol nebulization: comparison of three aerosol types in an in vitro pediatric model.

BACKGROUND: Advances in nebulizer design have produced both ultrasonic nebulizers and devices based on a vibrating mesh (vibrating mesh nebulizers), which are expected to enhance the efficiency of aerosol drug therapy. The aim of this study was to compare 4 different nebulizers, of 3 different types, in an in vitro model using albuterol delivery and physical characteristics as benchmarks. METHODS: The following nebulizers were tested: Sidestream Disposable jet nebulizer, Multisonic Infra Control ultrasonic nebulizer, and the Aerogen Pro and Aerogen Solo vibrating mesh nebulizers. Aerosol duration, temperature, and drug solution osmolality were measured during nebulization. Albuterol delivery was measured by a high-performance liquid chromatography system with fluorometric detection. The droplet size distribution was analyzed with a laser granulometer. RESULTS: The ultrasonic nebulizer was the fastest device based on the duration of nebulization; the jet nebulizer was the slowest. Solution temperature decreased during nebulization when the jet nebulizer and vibrating mesh nebulizers were used, but it increased with the ultrasonic nebulizer. Osmolality was stable during nebulization with the vibrating mesh nebulizers, but increased with the jet nebulizer and ultrasonic nebulizer, indicating solvent evaporation. Albuterol delivery was 1.6 and 2.3 times higher with the ultrasonic nebulizer and vibrating mesh nebulizers devices, respectively, than with the jet nebulizer. Particle size was significantly higher with the ultrasonic nebulizer. CONCLUSIONS: The in vitro model was effective for comparing nebulizer types, demonstrating important differences between nebulizer types. The new devices, both the ultrasonic nebulizers and vibrating mesh nebulizers, delivered more aerosolized drug than traditional jet nebulizers.

Toxicity at three years with and without irradiation of the internal mammary and medial supraclavicular lymph node chain in stage I to III breast cancer (EORTC trial 22922/10925).

INTRODUCTION: The EORTC 22922/10925 trial investigated the potential survival benefit and toxicity of elective irradiation of the internal mammary and medial supraclavicular (IM-MS) nodes Accrual completed in January 2004 and first results are expected in 2012. We present the toxicity reported until year 3 after treatment. PATIENTS AND METHODS: At each visit, toxicity was reported but severity was not graded routinely. Toxicity rates and performance status (PS) changes at three years were compared by chi(2) tests and logistic regression models in all the 3,866 of 4,004 patients eligible to the trial who received the allocated treatment. RESULTS: Only lung (fibrosis; dyspnoea; pneumonitis; any lung toxicities) (4.3% vs. 1.3%; p < 0.0001) but not cardiac toxicity (0.3% vs. 0.4%; p = 0.55) significantly increased with IM-MS treatment. No significant worsening of the PS was observed (p = 0.79), suggesting that treatment-related toxicity does not impair patient's daily activities. CONCLUSIONS: IM-MS irradiation seems well tolerated and does not significantly impair WHO PS at three years. A follow-up period of at least 10 years is needed to determine whether cardiac toxicity is increased after radiotherapy.

More is not always better-comparison of three instruments measuring volume of drinking in a sample of young men and their association with consequences

OBJECTIVE: In general population survey instruments that measure volume of drinking, additional questions and shorter reference periods yield higher volumes. Comparison studies have focused on volume but not on associations between volume and consequences. METHOD: From a cohort study on substance use risk factors (Cohort Study on Substance Use Risk Factors [C-SURF]), baseline data were analyzed for 5,074 young (approximately 20-year-old) men who were drinkers in the past 12 months. Volume of drinking was measured by a generic quantity-frequency (QF) instrument, an extended QF (separately for weekends and weekdays) instrument with 12-months recall, and a retrospective past-week diary. Associations of consequences with and without attribution of alcohol as a cause, Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-IV), criteria for dependence, and DSM-5 alcohol use disorder in the past 12 months were analyzed. RESULTS: The generic QF measure resulted in lower volume compared with either the extended QF measure (more questions) or the retrospective diary (the most questions and the shortest recall period). For outcomes, however, the extended QF assessment performed the best and the diary the worst. CONCLUSIONS: Higher volume yields are not always better regarding associations with outcomes. The extended QF instrument better captures the variability of drinking. The retrospective diary performs poorly for associations because of the mismatch with the recall period for past-12-months consequences and the potential for misclassification of past-week abstainers and heavy drinkers because of an uncommon past week. Diaries are not recommended for research investigating individual associations between exposure and outcomes in young populations if consequences are measured with a sufficiently long interval to capture rare consequences. (J. Stud. Alcohol Drugs, 75, 880-888, 2014).

Acquired auditory agnosia in childhood and normal sleep electroencephalography subsequently diagnosed as Landau-Kleffner syndrome: a report of three cases.

Aim  We report three cases of Landau-Kleffner syndrome (LKS) in children (two females, one male) in whom diagnosis was delayed because the sleep electroencephalography (EEG) was initially normal. Method  Case histories including EEG, positron emission tomography findings, and long-term outcome were reviewed. Results  Auditory agnosia occurred between the age of 2 years and 3 years 6 months, after a period of normal language development. Initial awake and sleep EEG, recorded weeks to months after the onset of language regression, during a nap period in two cases and during a full night of sleep in the third case, was normal. Repeat EEG between 2 months and 2 years later showed epileptiform discharges during wakefulness and strongly activated by sleep, with a pattern of continuous spike-waves during slow-wave sleep in two patients. Patients were diagnosed with LKS and treated with various antiepileptic regimens, including corticosteroids. One patient in whom EEG became normal on hydrocortisone is making significant recovery. The other two patients did not exhibit a sustained response to treatment and remained severely impaired. Interpretation  Sleep EEG may be normal in the early phase of acquired auditory agnosia. EEG should be repeated frequently in individuals in whom a firm clinical diagnosis is made to facilitate early treatment.

Three essays in Swiss corporate governance

This dissertation is a combination of three relatively independent chapters on the subject of corporate governance. Corporate governance is presently at the epicenter of the global financial crisis. The lack of regulation and the misalignment of objectives have greatly contributed to the major crisis we are now in. Most governance research has been conducted in the United States in a context of widely held corporations and great executive power. It does not reflect the variety of situations around the world and we question the validity of this model in other contexts. The aim of this dissertation is to look at other governance models, in particular the Swiss corporate governance not only from a practical point of view, but also from a multi-theoretical approach. Traditional corporate governance literature has focused on the Anglo-American model that mainly follows the agency theory (Jensen and Meckling, 1976) in a shareholder-manager context, and overlooked other approaches. We focus on three different aspects of corporate governance using three different theories. First, we look at the ownership type of various corporations, using the agency theory in a context where issues between shareholders predominate over the typical shareholder-manager relationship. Second, we explore the adoption process of several governance mechanisms that, due to changes in legislation, has taken place in Switzerland since 2002. We use the institutional theory (DiMaggio and Powell, 1983), in a context where the environmental pressures are particularly high. Finally, we spotlight the board of directors as a key element of the governance of publicly listed corporations. Particularly, we focus on the independence of the board of directors, using a combination of the agency and resource dependence theories (Pfeffer, 1972; Pfeffer and Salancik, 1978).

Selective three-dimensional visualization of the coronary arterial lumen using arterial spin tagging.

Conventional coronary magnetic resonance angiography (MRA) techniques display the coronary blood-pool along with the surrounding structures, including the myocardium, the ventricular and atrial blood-pool, and the great vessels. This representation of the coronary lumen is not directly analogous to the information provided by x-ray coronary angiography, in which the coronary lumen displayed by iodinated contrast agent is seen. Analogous "luminographic" data may be obtained using MR arterial spin tagging (projection coronary MRA) techniques. Such an approach was implemented using a 2D selective "pencil" excitation for aortic spin tagging in concert with a 3D interleaved segmented spiral imaging sequence with free-breathing, and real-time navigator technology. This technique allows for selective 3D visualization of the coronary lumen blood-pool, while signal from the surrounding structures is suppressed.

Patterns of phenotypic variation reveal substantial differentiation in sexual dimorphism of three Psammodromus (Squamata, Lacertidae) species

The Spanish sand racer (Psammodromus hispanicus) has been recently split into three distinct species: P. hispanicus, P. edwardsianus, and P. occidentalis. Some morphological differences have been reported but there is as yet no description allowing unambiguous identification of the three species. Here, we describe differentiation in body measurements, scalation traits, and colour traits as well as in the degree of sexual dimorphism. Our results show that P. edwardsianus can be easily distinguished by the presence of a supralabial scale below the subocular scale, which is absent in the other two species. Psammodromus hispanicus and P. occidentalis can be distinguished by the number of femoral pores, throat scales and ocelli, and the relative width of the anal scale. The degree of sexual size dimorphism and sexual colour dimorphism substantially differs among species, suggesting that different scenarios of sexual and natural selection may exist for each species. Moreover, sexually selected traits (nuptial colouration, ocelli, and femoral pores) significantly differ among species, suggesting that visual and chemical communication may also differ among species. Such differences could prevent reproduction and gene flow at secondary contact zones, potentially reinforcing isolation and speciation within this group of lizards.

Genome size rather than content might affect call properties in toads of three ploidy levels (Anura: Bufonidae: Bufo viridis subgroup).

In vertebrates, genome size has been shown to correlate with nuclear and cell sizes, and influences phenotypic features, such as brain complexity. In three different anuran families, advertisement calls of polyploids exhibit longer notes and intervals than diploids, and difference in cellular dimensions have been hypothesized to cause these modifications. We investigated this phenomenon in green toads (Bufo viridis subgroup) of three ploidy levels, in a different call type (release calls) that may evolve independently from advertisement calls, examining 1205 calls, from ten species, subspecies, and hybrid forms. Significant differences between pulse rates of six diploid and four polyploid (3n, 4n) green toad forms across a range of temperatures from 7 to 27 °C were found. Laboratory data supported differences in pulse rates of triploids vs. tetraploids, but failed to reach significance when including field recordings. This study supports the idea that genome size, irrespective of call type, phylogenetic context, and geographical background, might affect call properties in anurans and suggests a common principle governing this relationship. The nuclear-cell size ratio, affected by genome size, seems the most plausible explanation. However, we cannot rule out hypotheses under which call-influencing genes from an unexamined diploid ancestral species might also affect call properties in the hybrid-origin polyploids.

The "help" question doesn't help when screening for major depression: external validation of the three-question screening test for primary care patients managed for physical complaints.

BACKGROUND: Major depression, although frequent in primary care, is commonly hidden behind multiple physical complaints that are often the first and only reason for patient consultation. Major depression can be screened by two validated questions that are easier to use in primary care than the full DSM-IV criteria. A third question, called the "help" question, improves the specificity without apparently decreasing the sensitivity of this screening procedure. We validated the abbreviated screening procedure for major depression with and without the "help" question in primary care patients managed for a physical complaint. METHODS: This diagnostic accuracy study used data from a cohort study called SODA (for SOmatisation Depression Anxiety ) conducted by 24 general practitioners (GPs) in western Switzerland that included patients over 18 years of age with at least one physical complaint at index consultation. Major depression was identified with the full Patient Health Questionnaire. GPs were asked to screen patients for major depression with the three screening questions one year after inclusion. RESULTS: Out of 937 patients with at least one physical complaint, 751 were eligible one year after index consultation. Major depression was diagnosed in 69/724 (9.5%) patients. The sensitivity and specificity of the two-question method alone were 91.3% (95% confidence interval 81.4-96.4%) and 65.0% (95% confidence interval 61.2-68.6%), respectively. Adding the "help" question decreased the sensitivity (59.4% ; 95% confidence interval 47.0-70.9%) but improved the specificity (88.2% ; 95% confidence interval 85.4-90.5%) of the three-question method. CONCLUSIONS: The use of two screening questions for major depression was associated with high sensitivity and low specificity in primary care patients presenting a physical complaint. Adding the "help" question improved the specificity but clearly decreased the sensitivity; when using the "help" question; four out of ten patients with depression will be missed, compared to only one out of ten with the two-question method. Therefore, the "help" question is not useful as a screening question, but may help discussing management strategies.