Ownership, Multiple Blockholders and Performance: A study of the Indonesian Banking Industry

The objective of this study is to provide empirical evidence on how ownership structure and owner’s identity affect performance, in the banking industry by using a panel of Indonesia banks over the period 2000–2009. Firstly, we analysed the impact of the presence of multiple blockholders on bank ownership structure and performance. Building on multiple agency and principal-principal theories, we investigated whether the presence and shares dispersion across blockholders with different identities (i.e. central and regional government; families; foreign banks and financial institutions) affected bank performance, in terms of profitability and efficiency. We found that the number of blockholders has a negative effect on banks’ performance, while blockholders’ concentration has a positive effect. Moreover, we observed that the dispersion of ownership across different types of blockholders has a negative effect on banks’ performance. We interpret such results as evidence that, when heterogeneous blockholders are present, the disadvantage from conflicts of interests between blockholders seems to outweigh the advantage of the increase in additional monitoring by additional blockholder. Secondly, we conducted a joint analysis of the static, selection, and dynamic effects of different types of ownership on banks’ performance. We found that regional banks and foreign banks have a higher profitability and efficiency as compared to domestic private banks. In the short-run, foreign acquisitions and domestic M&As reduce the level of overhead costs, while in the long-run they increase the Net Interest Margin (NIM). Further, we analysed NIM determinants, to asses the impact of ownership on bank business orientation. Our findings lend support to our prediction that the NIM determinants differs accordingly to the type of bank ownership. We also observed that banks that experienced changes in ownership, such as foreign-acquired banks, manifest different interest margin determinants with respect to domestic or foreign banks that did not experience ownership rearrangements.

Modulation of hypoxia-inducible factors as a therapeutic target for multiple myeloma

Hypoxia-inducible factor-1 alpha (HIF-1α) plays a critical role in survival and is associated with poor prognosis in solid tumors. The role of HIF-1α in multiple myeloma is not completely known. In the present study, we explored the effect of EZN2968, an locked nucleic acid antisense oligonucleotide against HIF-1α, as a molecular target in MM. A panel of MM cell lines and primary samples from MM patients were cultured in vitro in the presence of EZN2968 . Under normoxia culture condition, HIF-1α mRNA and protein expression was detectable in all MM cell lines and in CD138+ cells from newly diagnosed MM patients samples. Significant up-regulation of HIF-1α protein expression was observed after incubation with IL6 or IGF-I, confirming that HIF-1α can be further induced by biological stimuli. EZN2968 efficiently induces a selective and stable down-modulation of HIF-1α and decreased the secretion of VEGF released by MM cell. Treatment with EZN2968 gave rise to a progressive accumulation of cells in the S and subG0 phase. The analysis of p21, a cyclin-dependent kinase inhibitors controlling cell cycle check point, shows upregulation of protein levels. These results suggest that HIF-1α inhibition is sufficient for cell cycle arrest in normoxia, and for inducing an apoptotic pathways.. In the presence of bone marrow microenvironment, HIF-1α inhibition blocks MAPK kinase pathway and secretion of pro-surviaval cytokines ( IL6,VEGF,IL8) In this study we provide evidence that HIF-1α, even in the absence of hypoxia signal, is expressed in MM plasma cells and further inducible by bone marrow milieu stimuli; moreover its inhibition is sufficient to induce a permanent cell cycle arrest. Our data support the hypothesis that HIF-1α inhibition may suppress tumor growth by preventing proliferation of plasma cells through p21 activation and blocking pro-survival stimuli from bone marrow microenvironment.