Does political proximity to the U.S. cause terror?

We analyze the impact of political proximity to the United States on the occurrence and severity of terror. Employing panel data for 116 countries over the period 1975–2001 we find that countries voting in line with the U.S. are victims of more and deadlier attacks.

Nexus between contracting and construction professional service businesses: empirical evidence from international market

he construction market around the world has witnessed the growing eminence of construction professional services (CPSs), such as urban planning, architecture, engineering, and consultancy, while the traditional contracting sector remains strong. Nowadays, it is not uncommon to see a design firm taking over the work of a traditional main contractor, or vice versa, of overseeing the delivery of a project. Although the two sectors of contracting and CPS share the same purpose of materializing the built environment, they are as different as they are interrelated. Much has been mentioned about the nexus between the two but little has been done to articulate it using empirical evidence. This study examined the nexus between contracting and CPS businesses by offering and testing lead-lag effects between the two sectors in the international market. A longitudinal panel data composed of 23 top international contractors and CPS firms was adopted. Surprisingly, results of the panel data analyses show that CPS business does not have a significant positive causal effect on contracting as a downstream business, and vice versa. CPS and contracting subsidiaries, although within the same company, do not necessarily form a consortium to undertake the same project; rather, they often collaborate with other CPS or contracting counterparts to undertake projects. This paper provides valuable insights into the sophisticated nexus between contracting and CPS in the international construction market. It will support business executives’ rational decision making for selecting proper contracting or CPS allies, or a proper mergers and acquisitions strategy in the international market. The paper also provides a fresh perspective through which researchers can better investigate the diversification strategies adopted by international contracting and CPS firms.

(How) Do research and administrative duties affect university professors’ teaching?

We analyze the interaction between university professors’ teaching quality and their research and administrative activities. Our sample is a high-quality individual panel data set from a medium size public Spanish university that allows us to avoid several types of biases frequently encountered in the literature. Although researchers teach roughly 20% more than non-researchers, their teaching quality is also 20% higher. Instructors with no research are 5 times more likely than the rest to be among the worst teachers. Over much of the relevant range, we find a nonlinear and positive relationship between research output and teaching quantity on teaching quality. Our conclusions may be useful for decision makers in universities and governments.

Corporate strategic responses to foreign entry: insights from prospect theory

Purpose – The purpose of this paper is to address how firms adapt their product and geographic diversification as a response to foreign rivals penetrating their domestic market by adopting a behavioral perspective to understand firm-level strategic responses to foreign entry. Design/methodology/approach – The study proposes that strategic responses to foreign entry selected by domestic incumbents have both a framing component and a related, strategic choice component, with the latter including changes in product and geographic market diversification (though other more business strategy-related responses are also possible, e.g. in product pricing and marketing). This study tests a set of hypotheses building on panel data of large US firms. Findings – The study finds, in accordance with our predictions, that domestic incumbents reduce their product and geographic diversification when facing an increase in import penetration. However, when increased market penetration by foreign firms takes the form of FDI rather than imports, the corporate response appears to be an increase in product and geographic diversification, again in line with our predictions. Originality/value – The study develops a new conceptual framework that is grounded in prospect theory, but builds on recent insights from mainstream international strategic management studies (Bowen and Wiersema, 2005; Wiersema and Bowen, 2008).

Business life cycle and capital structure: evidence from Chinese manufacturing firms

This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important for policy-makers to ensure that products and financial markets are well-balanced.

Mandatory and voluntary information disclosure and the effects on financial analysts: evidence from China

Purpose – This paper aims to make a comparison, different from existing literature solely focusing on voluntary earnings forecasts and ex post earnings surprise, between the effects of mandatory earnings surprise warnings and voluntary information disclosure issued by management teams on financial analysts in terms of the number of followings and the accuracy of earnings forecasts. Design/methodology/approach – This paper uses panel data analysis with fixed effects on data collected from Chinese public firms between 2006 and 2010. It uses an exogenous regulation enforcement to minimise the endogeneity problem. Findings – This paper finds that financial analysts are less likely to follow firms which mandatorily issue earnings surprise warnings ex ante than those voluntarily issue earnings forecasts. Moreover, ex post, they issue less accurate and more dispersed forecasts on former firms. The results support Brown et al.’s (2009) finding in the USA and suggest that the earnings surprise warnings affect information asymmetries. Practical implications – This paper justifies the mandatory earnings surprise warnings policy issued by Chinese Securities Regulatory Commission in 2006. Originality/value – Mandatory earnings surprise is a unique practical regulation for publicly listed firms in China. This paper, for the first time, provides empirical evaluation on the effectiveness of a mandatory information disclosure policy in China. Consistent with existing literature on information disclosure by public firms in other countries, this paper finds that, in China, voluntary information disclosure captures more private information than mandatory information disclosure on corporate earnings ability.

Regulation of early steps of GPVI signal transduction by phosphatases: a systems biology approach

We present a data-driven mathematical model of a key initiating step in platelet activation, a central process in the prevention of bleeding following Injury. In vascular disease, this process is activated inappropriately and causes thrombosis, heart attacks and stroke. The collagen receptor GPVI is the primary trigger for platelet activation at sites of injury. Understanding the complex molecular mechanisms initiated by this receptor is important for development of more effective antithrombotic medicines. In this work we developed a series of nonlinear ordinary differential equation models that are direct representations of biological hypotheses surrounding the initial steps in GPVI-stimulated signal transduction. At each stage model simulations were compared to our own quantitative, high-temporal experimental data that guides further experimental design, data collection and model refinement. Much is known about the linear forward reactions within platelet signalling pathways but knowledge of the roles of putative reverse reactions are poorly understood. An initial model, that includes a simple constitutively active phosphatase, was unable to explain experimental data. Model revisions, incorporating a complex pathway of interactions (and specifically the phosphatase TULA-2), provided a good description of the experimental data both based on observations of phosphorylation in samples from one donor and in those of a wider population. Our model was used to investigate the levels of proteins involved in regulating the pathway and the effect of low GPVI levels that have been associated with disease. Results indicate a clear separation in healthy and GPVI deficient states in respect of the signalling cascade dynamics associated with Syk tyrosine phosphorylation and activation. Our approach reveals the central importance of this negative feedback pathway that results in the temporal regulation of a specific class of protein tyrosine phosphatases in controlling the rate, and therefore extent, of GPVI-stimulated platelet activation.

Sibling influence on the human capital of the left-behind

While a growing literature has analyzed the effects of parental migration on the educational outcomes of children left behind, this study is the first to highlight the importance of sibling interactions in such a context. Using panel data from the RUMiC Survey, we find that sibling influence on school performance is stronger among left- behind children. Hence, parental migration seems to trigger changes in familial roles and sibling effects among children. However, it is primarily older sisters who exhibit a positive influence on their younger siblings. We corroborate our results by performing a series of tests to mitigate endogeneity issues. The results from the analysis suggest that sibling effects in migrant households might be a mechanism shaping children’s outcomes and success and that adjustments within the family left behind have the potential to generate benefits – or reduce hardships – in response to parental migration.

The impact of the elderly on inflation rates in developed countries

What explains the cross-national variation in inflation rates in developed countries? Previous literature has emphasised the role of ideas and institutions, and to a lesser extent interest groups, while leaving the role of electoral politics comparatively unexplored. This paper seeks to redress this neglect by focusing on one case where electoral politics matters for inflation: the share of the population above 65 years old in a country. I argue that countries with a larger share of elderly have lower inflation because older people are both more inflation averse and politically powerful, forcing governments to pursue lower inflation. I test my argument in three steps. First, logistic regression analysis of survey data confirms older people are more inflation averse. Second, panel data regression analysis of party manifesto data reveals that European countries with more old people have more economically orthodox political parties. Third, time series cross-section regression analyses demonstrate that the share of the elderly is negatively correlated with inflation in both a sample of 21 advanced OECD economies and a larger sample of 175 countries. Ageing may therefore push governments to adopt a low inflation regime.

The impact of deregulation and re-regulation on bank efficiency: evidence from Asia

Following the 1997 crisis, banking sector reforms in Asia have been characterised by the emphasis on prudential regulation, associated with increased financial liberalisation. Using a panel data set of commercial banks from eight major Asian economies over the period 2001-2010, this study explores how the coexistence of liberalisation and prudential regulation affects banks’ cost characteristics. Given the presence of heterogeneity of technologies across countries, we use a stochastic frontier approach followed by the estimation of a deterministic meta-frontier to provide ‘true’ estimates of bank cost efficiency measures. Our results show that the liberalization of bank interest rates and the increase in foreign banks' presence have had a positive and significant impact on technological progress and cost efficiency. On the other hand, we find that prudential regulation might adversely affect bank cost performance. When designing an optimal regulatory framework, policy makers should combine policies which aim to foster financial stability without hindering financial intermediation.