Decoding decisions in healthy subjects and auditory discrimination in comatose patients through single-trial topographic EEG analyses

Neuroimaging studies analyzing neurophysiological signals are typically based on comparing averages of peri-stimulus epochs across experimental conditions. This approach can however be problematic in the case of high-level cognitive tasks, where response variability across trials is expected to be high and in cases where subjects cannot be considered part of a group. The main goal of this thesis has been to address this issue by developing a novel approach for analyzing electroencephalography (EEG) responses at the single-trial level. This approach takes advantage of the spatial distribution of the electric field on the scalp (topography) and exploits repetitions across trials for quantifying the degree of discrimination between experimental conditions through a classification scheme. In the first part of this thesis, I developed and validated this new method (Tzovara et al., 2012a,b). Its general applicability was demonstrated with three separate datasets, two in the visual modality and one in the auditory. This development allowed then to target two new lines of research, one in basic and one in clinical neuroscience, which represent the second and third part of this thesis respectively. For the second part of this thesis (Tzovara et al., 2012c), I employed the developed method for assessing the timing of exploratory decision-making. Using single-trial topographic EEG activity during presentation of a choice's payoff, I could predict the subjects' subsequent decisions. This prediction was due to a topographic difference which appeared on average at ~516ms after the presentation of payoff and was subject-specific. These results exploit for the first time the temporal correlates of individual subjects' decisions and additionally show that the underlying neural generators start differentiating their responses already ~880ms before the button press. Finally, in the third part of this project, I focused on a clinical study with the goal of assessing the degree of intact neural functions in comatose patients. Auditory EEG responses were assessed through a classical mismatch negativity paradigm, during the very early phase of coma, which is currently under-investigated. By taking advantage of the decoding method developed in the first part of the thesis, I could quantify the degree of auditory discrimination at the single patient level (Tzovara et al., in press). Our results showed for the first time that even patients who do not survive the coma can discriminate sounds at the neural level, during the first hours after coma onset. Importantly, an improvement in auditory discrimination during the first 48hours of coma was predictive of awakening and survival, with 100% positive predictive value. - L'analyse des signaux électrophysiologiques en neuroimagerie se base typiquement sur la comparaison des réponses neurophysiologiques à différentes conditions expérimentales qui sont moyennées après plusieurs répétitions d'une tâche. Pourtant, cette approche peut être problématique dans le cas des fonctions cognitives de haut niveau, où la variabilité des réponses entre les essais peut être très élevéeou dans le cas où des sujets individuels ne peuvent pas être considérés comme partie d'un groupe. Le but principal de cette thèse est d'investiguer cette problématique en développant une nouvelle approche pour l'analyse des réponses d'électroencephalographie (EEG) au niveau de chaque essai. Cette approche se base sur la modélisation de la distribution du champ électrique sur le crâne (topographie) et profite des répétitions parmi les essais afin de quantifier, à l'aide d'un schéma de classification, le degré de discrimination entre des conditions expérimentales. Dans la première partie de cette thèse, j'ai développé et validé cette nouvelle méthode (Tzovara et al., 2012a,b). Son applicabilité générale a été démontrée avec trois ensembles de données, deux dans le domaine visuel et un dans l'auditif. Ce développement a permis de cibler deux nouvelles lignes de recherche, la première dans le domaine des neurosciences cognitives et l'autre dans le domaine des neurosciences cliniques, représentant respectivement la deuxième et troisième partie de ce projet. En particulier, pour la partie cognitive, j'ai appliqué cette méthode pour évaluer l'information temporelle de la prise des décisions (Tzovara et al., 2012c). En se basant sur l'activité topographique de l'EEG au niveau de chaque essai pendant la présentation de la récompense liée à un choix, on a pu prédire les décisions suivantes des sujets (en termes d'exploration/exploitation). Cette prédiction s'appuie sur une différence topographique qui apparaît en moyenne ~516ms après la présentation de la récompense. Ces résultats exploitent pour la première fois, les corrélés temporels des décisions au niveau de chaque sujet séparément et montrent que les générateurs neuronaux de ces décisions commencent à différentier leurs réponses déjà depuis ~880ms avant que les sujets appuient sur le bouton. Finalement, pour la dernière partie de ce projet, je me suis focalisée sur une étude Clinique afin d'évaluer le degré des fonctions neuronales intactes chez les patients comateux. Des réponses EEG auditives ont été examinées avec un paradigme classique de mismatch negativity, pendant la phase précoce du coma qui est actuellement sous-investiguée. En utilisant la méthode de décodage développée dans la première partie de la thèse, j'ai pu quantifier le degré de discrimination auditive au niveau de chaque patient (Tzovara et al., in press). Nos résultats montrent pour la première fois que même des patients comateux qui ne vont pas survivre peuvent discriminer des sons au niveau neuronal, lors de la phase aigue du coma. De plus, une amélioration dans la discrimination auditive pendant les premières 48heures du coma a été observée seulement chez des patients qui se sont réveillés par la suite (100% de valeur prédictive pour un réveil).

Essays in higher moment asset pricing and liquidity risk

This thesis focuses on theoretical asset pricing models and their empirical applications. I aim to investigate the following noteworthy problems: i) if the relationship between asset prices and investors' propensities to gamble and to fear disaster is time varying, ii) if the conflicting evidence for the firm and market level skewness can be explained by downside risk, Hi) if costly learning drives liquidity risk. Moreover, empirical tests support the above assumptions and provide novel findings in asset pricing, investment decisions, and firms' funding liquidity. The first chapter considers a partial equilibrium model where investors have heterogeneous propensities to gamble and fear disaster. Skewness preference represents the desire to gamble, while kurtosis aversion represents fear of extreme returns. Using US data from 1988 to 2012, my model demonstrates that in bad times, risk aversion is higher, more people fear disaster, and fewer people gamble, in contrast to good times. This leads to a new empirical finding: gambling preference has a greater impact on asset prices during market downturns than during booms. The second chapter consists of two essays. The first essay introduces a foramula based on conditional CAPM for decomposing the market skewness. We find that the major market upward and downward movements can be well preadicted by the asymmetric comovement of betas, which is characterized by an indicator called "Systematic Downside Risk" (SDR). We find that SDR can efafectively forecast future stock market movements and we obtain out-of-sample R-squares (compared with a strategy using historical mean) of more than 2.27% with monthly data. The second essay reconciles a well-known empirical fact: aggregating positively skewed firm returns leads to negatively skewed market return. We reconcile this fact through firms' greater response to negative maraket news than positive market news. We also propose several market return predictors, such as downside idiosyncratic skewness. The third chapter studies the funding liquidity risk based on a general equialibrium model which features two agents: one entrepreneur and one external investor. Only the investor needs to acquire information to estimate the unobservable fundamentals driving the economic outputs. The novelty is that information acquisition is more costly in bad times than in good times, i.e. counter-cyclical information cost, as supported by previous empirical evidence. Later we show that liquidity risks are principally driven by costly learning. Résumé Cette thèse présente des modèles théoriques dévaluation des actifs et leurs applications empiriques. Mon objectif est d'étudier les problèmes suivants: la relation entre l'évaluation des actifs et les tendances des investisseurs à parier et à crainadre le désastre varie selon le temps ; les indications contraires pour l'entreprise et l'asymétrie des niveaux de marché peuvent être expliquées par les risques de perte en cas de baisse; l'apprentissage coûteux augmente le risque de liquidité. En outre, des tests empiriques confirment les suppositions ci-dessus et fournissent de nouvelles découvertes en ce qui concerne l'évaluation des actifs, les décisions relatives aux investissements et la liquidité de financement des entreprises. Le premier chapitre examine un modèle d'équilibre où les investisseurs ont des tendances hétérogènes à parier et à craindre le désastre. La préférence asymétrique représente le désir de parier, alors que le kurtosis d'aversion représente la crainte du désastre. En utilisant les données des Etats-Unis de 1988 à 2012, mon modèle démontre que dans les mauvaises périodes, l'aversion du risque est plus grande, plus de gens craignent le désastre et moins de gens parient, conatrairement aux bonnes périodes. Ceci mène à une nouvelle découverte empirique: la préférence relative au pari a un plus grand impact sur les évaluations des actifs durant les ralentissements de marché que durant les booms économiques. Exploitant uniquement cette relation générera un revenu excédentaire annuel de 7,74% qui n'est pas expliqué par les modèles factoriels populaires. Le second chapitre comprend deux essais. Le premier essai introduit une foramule base sur le CAPM conditionnel pour décomposer l'asymétrie du marché. Nous avons découvert que les mouvements de hausses et de baisses majeures du marché peuvent être prédits par les mouvements communs des bêtas. Un inadicateur appelé Systematic Downside Risk, SDR (risque de ralentissement systématique) est créé pour caractériser cette asymétrie dans les mouvements communs des bêtas. Nous avons découvert que le risque de ralentissement systématique peut prévoir les prochains mouvements des marchés boursiers de manière efficace, et nous obtenons des carrés R hors échantillon (comparés avec une stratégie utilisant des moyens historiques) de plus de 2,272% avec des données mensuelles. Un investisseur qui évalue le marché en utilisant le risque de ralentissement systématique aurait obtenu une forte hausse du ratio de 0,206. Le second essai fait cadrer un fait empirique bien connu dans l'asymétrie des niveaux de march et d'entreprise, le total des revenus des entreprises positiveament asymétriques conduit à un revenu de marché négativement asymétrique. Nous décomposons l'asymétrie des revenus du marché au niveau de l'entreprise et faisons cadrer ce fait par une plus grande réaction des entreprises aux nouvelles négatives du marché qu'aux nouvelles positives du marché. Cette décomposition révélé plusieurs variables de revenus de marché efficaces tels que l'asymétrie caractéristique pondérée par la volatilité ainsi que l'asymétrie caractéristique de ralentissement. Le troisième chapitre fournit une nouvelle base théorique pour les problèmes de liquidité qui varient selon le temps au sein d'un environnement de marché incomplet. Nous proposons un modèle d'équilibre général avec deux agents: un entrepreneur et un investisseur externe. Seul l'investisseur a besoin de connaitre le véritable état de l'entreprise, par conséquent, les informations de paiement coutent de l'argent. La nouveauté est que l'acquisition de l'information coute plus cher durant les mauvaises périodes que durant les bonnes périodes, comme cela a été confirmé par de précédentes expériences. Lorsque la récession comamence, l'apprentissage coûteux fait augmenter les primes de liquidité causant un problème d'évaporation de liquidité, comme cela a été aussi confirmé par de précédentes expériences.

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.

Topics in public finance: social security and taxation

Summary The field of public finance focuses on the spending and taxing activities of governments and their influence on the allocation of resources and distribution of income. This work covers in three parts different topics related to public finance which are currently widely discussed in media and politics. The first two parts deal with issues on social security, which is in general one of the biggest spending shares of governments. The third part looks at the main income source of governments by analyzing the perceived value of tax competition. Part one deals with the current problem of increased early retirement by focusing on Switzerland as a special case. Early retirement is predominantly considered to be the result of incentives set by social security and the tax system. But the Swiss example demonstrates that the incidence of early retirement has dramatically increased even in the absence of institutional changes. We argue that the wealth effect also plays an important role in the retirement decision for middle and high income earners. An actuarially fair, but mandatory funded system with a relatively high replacement rate may thus contribute to a low labor market participation rate of elderly workers. We provide evidence using a unique dataset on individual retirement decisions in Swiss pension funds, allowing us to perfectly control for pension scheme details. Our findings suggest that affordability is a key determinant in the retirement decisions. The higher the accumulated pension capital, the earlier men, and to a smaller extent women, tend to leave the workforce. The fact that early retirement has become much more prevalent in the last 15 years is a further indicator of the importance of a wealth effect, as the maturing of the Swiss mandatory funded pension system over that period has led to an increase in the effective replacement rates for middle and high income earners. Part two covers the theoretical side of social security. Theories analyzing optimal social security benefits provide important qualitative results, by mainly using one general type of an economy. Economies are however very diverse concerning numerous aspects, one of the most important being the wealth level. This can lead to significant quantitative benefit differences that imply differences in replacement rates and levels of labor supply. We focus on several aspects related to this fact. In a within cohort social security model, we introduce disability insurance with an imperfect screening mechanism. We then vary the wealth level of the model economy and analyze how the optimal social security benefit structure or equivalently, the optimal replacement rates, changes depending on the wealth level of the economy, and if the introduction of disability insurance into a social security system is preferable for all economies. Second, the screening mechanism of disability insurance and the threshold level at which people are defined as disabled can differ. For economies with different wealth levels, we determine for different thresholds the screening level that maximizes social welfare. Finally, part three turns to the income of governments, by adding an element to the controversy on tax competition versus tax harmonization.2 Inter-jurisdictional tax competition can generate at least two potential benefits or costs: On a public level, tax competition may result in a lower or higher efficiency in the production of public services. But there is also a more private benefit in the form of an option for individuals to move to a community with a lower tax rate in the future. To explore the value citizens attach to tax competition we analyze a unique popular vote for a complete tax harmonization between communities in the third largest Swiss canton, Vaud. Although a majority of voters would have seemingly benefited from replacing the current tax rate by a revenue-neutral average tax rate, the proposal was rejected by a large margin. Our estimates suggest that the estimated combined perceived benefit from tax competition is in the range of 10%.

Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

Three essays in dynamic corporate finance

Summary Throughout my thesis, I elaborate on how real and financing frictions affect corporate decision making under uncertainty, and I explore how firms time their investment and financing decisions given such frictions. While the macroeconomics literature has focused on the impact of real frictions on investment decisions assuming all equity financed firms, the financial economics literature has mainly focused on the study of financing frictions. My thesis therefore assesses the join interaction of real and financing frictions in firms' dynamic investment and financing decisions. My work provides a rationale for the documented poor empirical performance of neoclassical investment models based on the joint effect of real and financing frictions on investment. A major observation relies in how the infrequency of corporate decisions may affect standard empirical tests. My thesis suggests that the book to market sorts commonly used in the empirical asset pricing literature have economic content, as they control for the lumpiness in firms' optimal investment policies. My work also elaborates on the effects of asymmetric information and strategic interaction on firms' investment and financing decisions. I study how firms time their decision to raise public equity when outside investors lack information about their future investment prospects. I derive areal-options model that predicts either cold or hot markets for new stock issues conditional on adverse selection, and I provide a rational approach to study jointly the market timing of corporate decisions and announcement effects in stock returns. My doctoral dissertation therefore contributes to our understanding of how under real and financing frictions may bias standard empirical tests, elaborates on how adverse selection may induce hot and cold markets in new issues' markets, and suggests how the underlying economic behaviour of firms may induce alternative patterns in stock prices.

Determinants of Corporate Disclosure : A Multicountry, Multilevel Model

Abstract The complexity of the current business world is making corporate disclosure more and more important for information users. These users, including investors, financial analysts, and government authorities rely on the disclosed information to make their investment decisions, analyze and recommend shares, and to draft regulation policies. Moreover, the globalization of capital markets has raised difficulties for information users in understanding the differences incorporate disclosure across countries and across firms. Using a sample of 797 firms from 34 countries, this thesis advances the literature on disclosure by illustrating comprehensively the disclosure determinants originating at firm systems and national systems based on the multilevel latent variable approach. Under this approach, the overall variation associated with the firm-specific variables is decomposed into two parts, the within-country and the between-country part. Accordingly, the model estimates the latent association between corporate disclosure and information demand at two levels, the within-country and the between-country level. The results indicate that the variables originating from corporate systems are hierarchically correlated with those from the country environment. The information demand factor indicated by the number of exchanges listed and the number of analyst recommendations can significantly explain the variation of corporate disclosure for both "within" and "between" countries. The exogenous influences of firm fundamentals-firm size and performance-are exerted indirectly through the information demand factor. Specifically, if the between-country variation in firm variables is taken into account, only the variables of legal systems and economic growth keep significance in explaining the disclosure differences across countries. These findings strongly support the hypothesis that disclosure is a response to both corporate systems and national systems, but the influence of the latter on disclosure reflected significantly through that of the former. In addition, the results based on ADR (American Depositary Receipt) firms suggest that the globalization of capital markets is harmonizing the disclosure behavior of cross-boundary listed firms, but it cannot entirely eliminate the national features in disclosure and other firm-specific characteristics.

Generation of cell polarity in plants links endocytosis, auxin distribution and cell fate decisions.

Dynamically polarized membrane proteins define different cell boundaries and have an important role in intercellular communication-a vital feature of multicellular development. Efflux carriers for the signalling molecule auxin from the PIN family are landmarks of cell polarity in plants and have a crucial involvement in auxin distribution-dependent development including embryo patterning, organogenesis and tropisms. Polar PIN localization determines the direction of intercellular auxin flow, yet the mechanisms generating PIN polarity remain unclear. Here we identify an endocytosis-dependent mechanism of PIN polarity generation and analyse its developmental implications. Real-time PIN tracking showed that after synthesis, PINs are initially delivered to the plasma membrane in a non-polar manner and their polarity is established by subsequent endocytic recycling. Interference with PIN endocytosis either by auxin or by manipulation of the Arabidopsis Rab5 GTPase pathway prevents PIN polarization. Failure of PIN polarization transiently alters asymmetric auxin distribution during embryogenesis and increases the local auxin response in apical embryo regions. This results in ectopic expression of auxin pathway-associated root-forming master regulators in embryonic leaves and promotes homeotic transformation of leaves to roots. Our results indicate a two-step mechanism for the generation of PIN polar localization and the essential role of endocytosis in this process. It also highlights the link between endocytosis-dependent polarity of individual cells and auxin distribution-dependent cell fate establishment for multicellular patterning.

Subjective health assessments and active labor market participation of older men: evidence from a semiparametric binary choice model with nonadditive correlated individual-specific effects

We use panel data from the U. S. Health and Retirement Study, 1992-2002, to estimate the effect of self-assessed health limitations on the active labor market participation of older men. Self-assessments of health are likely to be endogenous to labor supply due to justification bias and individual-specific heterogeneity in subjective evaluations. We address both concerns. We propose a semiparametric binary choice procedure that incorporates nonadditive correlated individual-specific effects. Our estimation strategy identifies and estimates the average partial effects of health and functioning on labor market participation. The results indicate that poor health plays a major role in labor market exit decisions.

Individual patient data systematic review and meta-analysis of optic nerve sheath diameter ultrasonography for detecting raised intracranial pressure: protocol of the ONSD research group.

BACKGROUND: The purpose of the optic nerve sheath diameter (ONSD) research group project is to establish an individual patient-level database from high quality studies of ONSD ultrasonography for the detection of raised intracranial pressure (ICP), and to perform a systematic review and an individual patient data meta-analysis (IPDMA), which will provide a cutoff value to help physicians making decisions and encourage further research. Previous meta-analyses were able to assess the diagnostic accuracy of ONSD ultrasonography in detecting raised ICP but failed to determine a precise cutoff value. Thus, the ONSD research group was founded to synthesize data from several recent studies on the subject and to provide evidence on the diagnostic accuracy of ONSD ultrasonography in detecting raised ICP. METHODS: This IPDMA will be conducted in different phases. First, we will systematically search for eligible studies. To be eligible, studies must have compared ONSD ultrasonography to invasive intracranial devices, the current reference standard for diagnosing raised ICP. Subsequently, we will assess the quality of studies included based on the QUADAS-2 tool, and then collect and validate individual patient data. The objectives of the primary analyses will be to assess the diagnostic accuracy of ONSD ultrasonography and to determine a precise cutoff value for detecting raised ICP. Secondly, we will construct a logistic regression model to assess whether patient and study characteristics influence diagnostic accuracy. DISCUSSION: We believe that this IPD MA will provide the most reliable basis for the assessment of diagnostic accuracy of ONSD ultrasonography for detecting raised ICP and to provide a cutoff value. We also hope that the creation of the ONSD research group will encourage further study. TRIAL REGISTRATION: PROSPERO registration number: CRD42012003072.

Health and (Other) Asset Holdings

Despite clear evidence of correlations between financial and medical statuses and decisions, most models treat financial and health-related choices separately. This article bridges this gap by proposing a tractable dynamic framework for the joint determination of optimal consumption, portfolio holdings, health investment, and health insurance. We solve for the optimal rules in closed form and capitalize on this tractability to gain a better understanding of the conditions under which separation between financial and health-related decisions is sensible, and of the pathways through which wealth and health determine allocations, welfare and other variables of interest such as expected longevity or the value of health. Furthermore we show that the model is consistent with the observed patterns of individual allocations and provide realistic estimates of the parameters that confirm the relevance of all the main characteristics of the model.

Treaty shopping in international investment law

Is "treaty shopping" in international investment law "legitimate nationality planning" or "treaty abuse"? This is the question investment arbitral tribunals have been increasingly faced with over past years. This PhD thesis will examine in a systematic and comprehensive manner investment arbitral decisions that have attempted to draw this line. It will show that while some legal approaches taken by arbitral tribunals have started to consolidate, others remain unsettled, contributing to the picture of an overall inconsistent jurisprudence. The thesis will also make proposals de lege ferenda on how States could reform their international investment agreements in order to make them less susceptible to the practice of treaty shopping.