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.

Not so disadvantaged: Portuguese migrants in Switzerland have a better access to healthcare and health status than Portuguese residents

Background: Most migrant studies have compared health characteristics between migrants and nationals of the host country. We aimed at comparing health characteristics of migrants with nationals from their home country. Methods: Portuguese national health survey (2005-6; 30,173 participants aged 18-75 years) and four national health surveys conducted in Switzerland (2002, 2004, 2007 and 2011, totalling 1,170 Portuguese migrants of the same age range). Self-reported data on length of stay, cardiovascular risk factors, healthcare use and health status were collected. Results: Resident Portuguese were significantly older and more educated than migrants. Resident Portuguese had a higher mean BMI and prevalence of obesity than migrants. Resident Portuguese also reported more frequently being hypertensive and having their blood pressure screened within the last year. On the contrary, migrant Portuguese were more frequently smokers, had a medical visit in the previous year more frequently and self-rated their health higher than resident Portuguese. After adjustment for age, gender, marital status and education, migrants had a higher likelihood smoking, of having a medical visit the previous year, and of self-rating their current health as good or very good than resident Portuguese. Compared to Portuguese residents, cholesterol screening in the previous year was more common only among migrants living in Switzerland for more than 17 years. Conclusion: Portuguese migrants in Switzerland do not differ substantially from resident Portuguese regarding most cardiovascular risk factors. Migrants appear to benefit from higher healthcare accessibility and consider themselves healthier than Portuguese residents.

Portuguese migrants in Switzerland: healthcare and health status compared to portuguese residents.

BACKGROUND: Most migrant studies have compared health characteristics between migrants and nationals of the host country. We aimed at comparing health characteristics of migrants with nationals from their home country. METHODS: Portuguese national health survey (2005-6; 30,173 participants aged 18-75 years) and four national health surveys conducted in Switzerland (2002, 2004, 2007 and 2011, totalling 1,170 Portuguese migrants of the same age range). Self-reported data on length of stay, cardiovascular risk factors, healthcare use and health status were collected. RESULTS: Resident Portuguese were significantly older and more educated than migrants. Resident Portuguese had a higher mean BMI and prevalence of obesity than migrants. Resident Portuguese also reported more frequently being hypertensive and having their blood pressure screened within the last year. On the contrary, migrant Portuguese were more frequently smokers, had a medical visit in the previous year more frequently and self-rated their health higher than resident Portuguese. After adjustment for age, gender, marital status and education, migrants had a higher likelihood of smoking, of having a medical visit the previous year, and of self-rating their current health as good or very good than resident Portuguese. Compared to Portuguese residents, cholesterol screening in the previous year was more common only among migrants living in Switzerland for more than 17 years. CONCLUSION: Portuguese migrants in Switzerland do not differ substantially from resident Portuguese regarding most cardiovascular risk factors. Migrants consider themselves healthier than Portuguese residents and more often had a recent medical visit.

The positive effects of a protean career attitude for self-initiated expatriates: Cultural adjustment as a mediator

Purpose - The authors sought to explain why and how protean career attitude might influence self-initiated expatriates' (SIEs) experiences positively. A mediation model of cultural adjustment was proposed and empirically evaluated. Design/methodology/approach - Data from 132 SIEs in Germany containing measures of protean career attitude, cultural adjustment, career satisfaction, life satisfaction, and intention to stay in the host country were analysed using path analysis with a bootstrap method. Findings - Empirical results provide support for the authors' proposed model: the positive relations between protean career attitude and the three expatriation outcomes (career satisfaction, life satisfaction and intention to stay in the host country) were mediated by positive cross-cultural adjustment of SIEs. Research limitations/implications - All data were cross-sectional from a single source. The sample size was small and included a large portion of Chinese participants. The study should be replicated with samples in other destination countries, and longitudinal research is suggested. Practical implications - By fostering both a protean career attitude in skilled SIE employees and their cultural adjustment, corporations and receiving countries could be able to retain this international workforce better in times of talent shortage. Originality/value - This study contributes to the scarce research on the conceptual relatedness of protean career attitude and SIEs, as well as to acknowledging the cultural diversity of the SIE population.

'Se dire similaire et différent': la (re)présentation de soi et la négociation discursive des références identitaires des ressortissants ex-yougoslaves musulmans au Luxembourg

Cette thèse, qui se base sur des entretiens qualitatifs, porte sur la négociation des références identitaires de musulmans immigrés et réfugiés en provenance de Γ ex-Yougoslavie au Luxembourg et s'intéresse à la pertinence changeante de la religion dans la conception de soi. Selon une approche constructiviste et interactionniste, l'identité est conçue comme un projet constamment négocié, reconstruit dans des processus d'interaction sociale et en fonction des contextes sociaux. Nos données suggèrent l'émergence de constructions identitaires complexes et attestent de la pluridimensionalité et de l'intersectionnalité des références identitaires utilisées dans la conception de soi et témoignent de la non-réduction des individus à des catégories fixes. Différentes catégories sont rendues significatives et de multiples frontières sont établies afin de se différencier de figures d'altérité changeantes, sélectivement choisies pour construire une certaine image de soi. Les discours identitaires témoignent de l'aspiration à une identité positive, dans une situation caractérisée par la perte du statut social et des stigmatisations multiples, en tant que ex-Yougoslaves, demandeurs d'asile et musulmans. Nos interlocuteurs établissent un répertoire identitaire composé de marqueurs transposés, inventés et revalorisés, leur permettant de reconstruire une identité positive pour soi et leurs audiences. Ce travail décrit les manières dont les individus établissent leur répertoire identitaire à l'aide de marqueurs transposés, inventés et revalorisés, leur permettant de reconstruire une identité positive pour soi et leurs audiences et montre comment les processus de différenciation de 'l'autre' dans le pays d'origine et d'accueil sont reliés. - The question addressed in this project with a qualitative design, is how muslim migrants and refugees from the former Socialist Federal Republic of Yugoslavia in Luxemburg negotiate salient identity references in a new social political environment and discusses the changing significance of religion and the way it is integrated in the identity patchwork. According to a constructivist and interactionist approach, conceiving identity as a constantly negotiated project, reconstructed in interaction and with regard to social context, identities are relevant only in relation to particular other groups and in certain situations of interaction. Our data suggest the emergence of complex identity patterns using multiple references for self- description and attest of the intersectionnality of identity references and show that individuals can't be reduced to fixed categories. Different categories are made salient and multiple symbolic boundaries are established in order to differentiate from different "others", selected in order to construct a certain self-concept. The discourses of our participants attest of an aspiration towards a positive identity in a situation characterized by the loss of social status and multiple stigmata. This thesis describes the ways how individuals establish their identity repertoire with invented, transposed and negotiated identity references, that allow them to construct a favourable identity for themselves and their public and shows how différenciation processes in home and host country are related.

Travailleuses du sexe: un accès aux soins limité ? [Sex workers: limited access to healthcare ?].

Les travailleuses du sexe constituent un groupe hétérogène qui cumule les facteurs de vulnérabilité, comme l'instabilité géographique, la migration forcée, les addictions et la précarité du permis de séjour. Leur accès aux soins dépend notamment des lois régissant le "marché du sexe" et de la politique migratoire du pays d'accueil. Dans cet article, nous passons en revue diverses stratégies sanitaires européennes destinées à ce groupe vulnérable et présentons les résultats préliminaires d'une étude pilote réalisée auprès de 50 travailleuses du sexe pratiquant dans les rues de Lausanne. Les résultats sont préoccupants : 56% n'ont pas d'assurance maladie, 96% sont migrantes et 66% sans permis de séjour. Ces résultats préliminaires devraient sensibiliser les décideurs politiques à améliorer l'accès aux soins des travailleuses du sexe. [Abstract] Sex workers constitute a heterogeneous group possessing a combination of vulnerability factors such as geographical instability, forced migration, substance addiction and lack of legal residence permit. Access to healthcare for sex workers depends on the laws governing the sex market and on migration policies in force in the host country. In this article, we review different European health strategies established for sex workers, and present preliminary results of a pilot study conducted among 50 sex workers working on the streets in Lausanne. The results are worrying: 56% have no health insurance, 96% are migrants and 66% hold no legal residence permit. These data should motivate public health departments towards improving access to healthcare for this vulnerable population.

Expanding to institutionally different countries. Reasons, Firm International Experience, and Entry Mode Choice

We examine entry mode choice and its consequences when a multinational enterprise (MNE) expands into an institutionally different country. We argue that discussions of entry mode should distinguish between informal (e.g., culture) and formal (e.g., laws) institutions, and should take into account not just the home country of the MNE and its distance to the focal host country, but the MNE's overall footprint and experience across the world in general, especially in countries with an institutional structure that is similar to that of the focal host country. Specifically, we argue that firms with experience in countries with different informal institutions will be more likely to enter via acquisitions than firms without such experience, that such experience will not matter as much in the case of formal institutions, and that such firms will exit more quickly when they enter via equity alliances than through full acquisitions. We also distinguish between balanced and unbalanced alliances and argue that balanced alliances will be more enduring, but only when the host country is culturally (not legally) different from the other countries where the MNE has experience. Our arguments suggest that entry mode should be conditioned on a firm's experience in other markets, and that intercountry differences in formal versus informal institutions have distinct influences on entry mode.

HIV infection disrupts the sympatric host-pathogen relationship in human tuberculosis.

The phylogeographic population structure of Mycobacterium tuberculosis suggests local adaptation to sympatric human populations. We hypothesized that HIV infection, which induces immunodeficiency, will alter the sympatric relationship between M. tuberculosis and its human host. To test this hypothesis, we performed a nine-year nation-wide molecular-epidemiological study of HIV-infected and HIV-negative patients with tuberculosis (TB) between 2000 and 2008 in Switzerland. We analyzed 518 TB patients of whom 112 (21.6%) were HIV-infected and 233 (45.0%) were born in Europe. We found that among European-born TB patients, recent transmission was more likely to occur in sympatric compared to allopatric host-pathogen combinations (adjusted odds ratio [OR] 7.5, 95% confidence interval [95% CI] 1.21-infinity, p = 0.03). HIV infection was significantly associated with TB caused by an allopatric (as opposed to sympatric) M. tuberculosis lineage (OR 7.0, 95% CI 2.5-19.1, p<0.0001). This association remained when adjusting for frequent travelling, contact with foreigners, age, sex, and country of birth (adjusted OR 5.6, 95% CI 1.5-20.8, p = 0.01). Moreover, it became stronger with greater immunosuppression as defined by CD4 T-cell depletion and was not the result of increased social mixing in HIV-infected patients. Our observation was replicated in a second independent panel of 440 M. tuberculosis strains collected during a population-based study in the Canton of Bern between 1991 and 2011. In summary, these findings support a model for TB in which the stable relationship between the human host and its locally adapted M. tuberculosis is disrupted by HIV infection.

Host factors and genetic susceptibility to infections due to intracellular bacteria and fastidious organisms.

While genetic polymorphisms play a paramount role in tuberculosis (TB), less is known about their contribution to the severity of diseases caused by other intracellular bacteria and fastidious microorganisms. We searched electronic databases for observational studies reporting on host factors and genetic predisposition to infections caused by intracellular fastidious bacteria published up to 30 May 2014. The contribution of genetic polymorphisms was documented for TB. This includes genetic defects in the mononuclear phagocyte/T helper cell type 1 (Th1) pathway contributing to disseminated TB disease in children and genome-wide linkage analysis (GWAS) in reactivated pulmonary TB in adults. Similarly, experimental studies supported the role of host genetic factors in the clinical presentation of illnesses resulting from other fastidious intracellular bacteria. These include IL-6 -174G/C or low mannose-binding (MBL) polymorphisms, which are incriminated in chronic pulmonary conditions triggered by C. pneumoniae, type 2-like cytokine secretion polymorphisms, which are correlated with various clinical patterns of M. pneumoniae infections, and genetic variation in the NOD2 gene, which is an indicator of tubal pathology resulting from Chamydia trachomatis infections. Monocyte/macrophage migration and T lymphocyte recruitment defects are corroborated to ineffective granuloma formation observed among patients with chronic Q fever. Similar genetic polymorphisms have also been suggested for infections caused by T. whipplei although not confirmed yet. In conclusion, this review supports the paramount role of genetic factors in clinical presentations and severity of infections caused by intracellular fastidious bacteria. Genetic predisposition should be further explored through such as exome sequencing.

Elevated blood pressure prevalence in children did not follow the increase in overweight: results from a school-based study in a rapidly developing country, 1998-2006

Background: Blood pressure (BP) is strongly associated with body weight and there is concern that the pediatric overweight epidemic could lead to an increase in children's mean BP. Objectives: We analyzed BP trends from 1998 to 2006 among children of the Seychelles, a rapidly developing middle-income country in Africa. Methods: Serial school-based surveys of weight, height and BP were conducted yearly between 1998-2006 among all students of the country in four school grades (kindergarten, 4th, 7th and 10th years of compulsory school). We used the CDC criteria to define "overweight" (BMI _95th sex-, and age-specific percentile) and the NHBPEP criteria for "elevated BP" (BP _95th sex-, age-, and height specific percentile). Methods for height, weight, and BP measurements were identical over the study period. The trends in mean BMI and mean systolic/diastolic BP were assessed with linear regression. Results: 27,703 children aged 4-18 years (participation rate: 79%) contributed 43,927 observations on weight, height, and BP. The prevalence of overweight increased from 5.1% in 1998-2000 to 8.1% in 2004-2006 among boys, and from 6.1% to 9.1% among girls, respectively. The prevalence of elevated BP was 8.4% in 1998-2000 and 6.9% in 2004-2006 among boys; 9.8% and 7.8% among girls, respectively. Over the 9-years study period, age-adjusted body mass index (BMI) increased by 0.078 kg/m2/year in boys and by 0.083 kg/m2/year in girls (both sexes, P_0.001). Age- and height-adjusted systolic BP decreased by -0.37 mmHg/year in boys and by -0.34 mmHg/year in girls (both sexes, P_0.001). Diastolic BP did not change in boys (-0.02 mmHg/year, P: 0.40) and slightly increased in girls (0.07 mmHg/year, P: 0.003). These trend estimates were altered modestly upon further adjustment for BMI or if analyses were based on median rather than mean values. Conclusion: Although body weight increased markedly between 1998 and 2006 in this population, systolic BP decreased and diastolic BP changed only marginally. This suggests that population increases in body weight are not necessarily associated with corresponding rises in BP in children.

Dictyostelium discoideum as an expression host for the circumsporozoite protein of Plasmodium falciparum.

We have used the cellular slime mold, Dictyostelium discoideum (Dd), to express the Plasmodium falciparum circumsporozoite protein (CS), a potential component of a subunit vaccine against malaria. This was accomplished via an expression vector based on the discoidin I-encoding gene promoter, in which we linked a sequence coding for a Dd leader peptide to the almost complete CS coding region (pEDII-CS). CS production at both the mRNA and protein levels is induced by starving cells in a simple phosphate buffer. Variation in pH or cell density does not seem to influence CS synthesis. CS-producing cells can be grown either on their normal substrate, bacteria, or on a semi-synthetic media, without affecting CS accumulation level. The CS produced in Dd seems similar to the natural parasite protein as judged by its size and epitope recognition by a panel of monoclonal antibodies. We constructed a second expression vector in which the CS is under the control of a Dd ras promoter. CS accumulation can then be induced by external addition of cAMP. Such a tightly regulated promoter may allow expression of proteins potentially toxic to the cell. Thus, Dd could be a useful eukaryotic system to produce recombinant proteins, in particular from human or animal parasites like P. falciparum.

Contextual determinants of alcohol consumption changes and preventive alcohol policies: a 12-country European study in progress.

Beginning with France in the 1950s, alcohol consumption has decreased in Southern European countries with few or no preventive alcohol policy measures being implemented, while alcohol consumption has been increasing in Northern European countries where historically more restrictive alcohol control policies were in place, even though more recently they were loosened. At the same time, Central and Eastern Europe have shown an intermediate behavior. We propose that country-specific changes in alcohol consumption between 1960 and 2008 are explained by a combination of a number of factors: (1) preventive alcohol policies and (2) social, cultural, economic, and demographic determinants. This article describes the methodology of a research study designed to understand the complex interactions that have occurred throughout Europe over the past five decades. These include changes in alcohol consumption, drinking patterns and alcohol-related harm, and the actual determinants of such changes.

Host-microorganism interactions in lung diseases.

Until recently, the airways were thought to be sterile unless infected; however, a shift towards molecular methods for the quantification and sequencing of bacterial DNA has revealed that the airways harbour a unique steady-state microbiota. This paradigm shift is changing the way that respiratory research is approached, with a clear need now to consider the effects of host-microorganism interactions in both healthy and diseased lungs. We propose that akin to recent discoveries in intestinal research, dysbiosis of the airway microbiota could underlie susceptibility to, and progression and chronicity of lung disease. In this Opinion article, we summarize current knowledge of the airway microbiota and outline how host-microorganism interactions in the lungs and other tissues might influence respiratory health and disease.

Shallow-level migmatization of gabbros in a metamorphic contact aureole, Fuerteventura Basal Complex, Canary Islands

Migmatization of gabbroic rocks at 2-3 kbar has occurred in the metamorphic contact aureole of a mafic pluton in the Fuerteventura Basal Complex (Canary Island;). Migmatites are characterized by a dense network: of closely spaced millimetre-wide leucocratic veins with perfectly preserved igneous textures. They are all relatively enriched in Al, Na I: Sr Ba, Nb, Y and the rare earth elements compared with the unaffected country rock beyond the aureole. Migmatization under such low-pressure conditions war possible because of the unusual tectonic and magmatic contact in which ii occurred. Multiple basic intrusions associated with extrusive volcanic activity created high heat flow in a small area. Alkaline and metasomatized rocks present in the country rock of the intruding pluton were leached by high-temperature fluids during contact metamorphism. These enriched fluids then favoured partial melting of the host gabbroic rocks, and contaminated both the leucosomes and melanosomes. A transpressive tectonic setting at the time of intrusion created shearing along the contact between the intrusion and its host rock. This shearing enhanced circulation of the fluids and allowed segregation of the nea-formed melts from their restite by opening tension veins into which the melts migrated. Depending on the relative timing of melt segregation and recrystallization leucosomes range in composition from a 40-60% mixture of clinopyroxene (+/- amphibole) and plagioclase to almost pure feldspathic veins. Comparable occurrences of gabbros migmatized at low pressure are expected only at a snail scale in localized areas of high heat flow in the presence of fluids, such as in. mid-ocean ridges or ocean-islands.