Functional brain network efficiency predicts intelligence

The neuronal causes of individual differences in mental abilities such as intelligence are complex and profoundly important. Understanding these abilities has the potential to facilitate their enhancement. The purpose of this study was to identify the functional brain network characteristics and their relation to psychometric intelligence. In particular, we examined whether the functional network exhibits efficient small-world network attributes (high clustering and short path length) and whether these small-world network parameters are associated with intellectual performance. High-density resting state electroencephalography (EEG) was recorded in 74 healthy subjects to analyze graph-theoretical functional network characteristics at an intracortical level. Ravens advanced progressive matrices were used to assess intelligence. We found that the clustering coefficient and path length of the functional network are strongly related to intelligence. Thus, the more intelligent the subjects are the more the functional brain network resembles a small-world network. We further identified the parietal cortex as a main hub of this resting state network as indicated by increased degree centrality that is associated with higher intelligence. Taken together, this is the first study that substantiates the neural efficiency hypothesis as well as the Parieto-Frontal Integration Theory (P-FIT) of intelligence in the context of functional brain network characteristics. These theories are currently the most established intelligence theories in neuroscience. Our findings revealed robust evidence of an efficiently organized resting state functional brain network for highly productive cognitions.

Postacquisition performance of acquiring firms

We investigate whether negative postacquisition stock-price performance of acquiring firms is a genuine phenomenon or a statistical artifact. Using a comprehensive sample of domestic acquisitions in the 1966-1986 period, we show that acquiring firms underperform a control portfolio only during the three years but not five years following the acquisition. There is evidence of negative performance in the second and third postacquisition years, but that performance occurs mainly in the 1960s and 1970s, and disappears in the 1980s. Thus, especially in the later years, the postacquisition years do not provide convincing evidence of wasteful corporate acquisitions, or strong evidence that contradicts market efficiency.

What Does the Market Learn from Stock Offering Revisions?

We examine the disclosure of size revisions of seasoned stock offerings to see what information revisions impart to investros. Revisions could deliver firm-originated infoirmation, which discloses something managers know about the firm. Alternatively, they could disseminate market-originated information, which is information market participants have but which is not conveyed until trading takes place. Our results reject the notion that revisions reveal firm-originated news. Instead, the results are consistent with the market-originated news hypothesis and suggest a mechanism that investros and underwriters use to learn about the demand for an offering.

Corporate aging and investment decisions

Paper I: Corporate aging and internal resource allocation Abstract Various observers argue that established firms are at a disadvantage in pursuing new growth opportunities. In this paper, we provide systematic evidence that established firms allocate fewer resources to high-growth lines of business. However, we find no evidence of inefficient resource allocation in established firms. Redirecting resources from high-growth to low-growth lines of business does not result in lower profitability. Also, resource allocation towards new growth opportunities does not increase when managers of established firms are exposed to takeover and product market threats. Rather, it seems that conservative resource allocation strategies are driven by pressures to meet investors’ expectations. Our empirical evidence, thus, favors the hypothesis that established firms wisely choose to allocate fewer resources to new growth opportunities as external pressures force them to focus on efficiency rather than novelty (Holmström 1989). Paper II: Corporate aging and asset sales Abstract This paper asks whether divestitures are motivated by strategic considerations about the scope of the firm’s activities. Limited managerial capacity implies that exploiting core competences becomes comparatively more attractive than exploring new growth opportunities as firms mature. Divestitures help stablished firms free management time and increase the focus on core competences. The testable implication of this attention hypothesis is that established firms are the main sellers of assets, that their divestiture activity increases when managerial capacity is scarcer, that they sell non-core activities, and that they return the divestiture proceeds to the providers of capital instead of reinvesting them in the firm. We find strong empirical support for these predictions. Paper III: Corporate aging and lobbying expenditures Abstract Creative destruction forces constantly challenge established firms, especially in competitive markets. This paper asks whether corporate lobbying is a competitive weapon of established firms to counteract the decline in rents over time. We find a statistically and economically significant positive relation between firm age and lobbying expenditures. Moreover, the documented age-effect is weaker when firms have unique products or operate in concentrated product markets. To address endogeneity, we use industry distress as an exogenous nonlegislative shock to future rents and show that established firms are relatively more likely to lobby when in distress. Finally, we provide empirical evidence that corporate lobbying efforts by established firms forestall the creative destruction process. In sum, our findings suggest that corporate lobbying is a competitive weapon of established firms to retain profitability in competitive environments.

The effect of brain size evolution on feeding propensity, digestive efficiency, and juvenile growth

One key hypothesis in the study of brain size evolution is the expensive tissue hypothesis; the idea that increased investment into the brain should be compensated by decreased investment into other costly organs, for instance the gut. Although the hypothesis is supported by both comparative and experimental evidence, little is known about the potential changes in energetic requirements or digestive traits following such evolutionary shifts in brain and gut size. Organisms may meet the greater metabolic requirements of larger brains despite smaller guts via increased food intake or better digestion. But increased investment in the brain may also hamper somatic growth. To test these hypotheses we here used guppy (Poecilia reticulata) brain size selection lines with a pronounced negative association between brain and gut size and investigated feeding propensity, digestive efficiency (DE), and juvenile growth rate. We did not find any difference in feeding propensity or DE between large- and small-brained individuals. Instead, we found that large-brained females had slower growth during the first 10 weeks after birth. Our study provides experimental support that investment into larger brains at the expense of gut tissue carries costs that are not necessarily compensated by a more efficient digestive system.

Tooth loss, chewing efficiency and cognitive impairment in geriatric patients.

BACKGROUND Patients with dementia have poorer oral health and fewer teeth than their peers without cognitive impairment. OBJECTIVE The hypothesis of this study is that the number of natural teeth and the chewing efficiency are associated with cognitive functioning. METHODS This cross-sectional study included 29 patients diagnosed with dementia aged 75 years or older and 22 controls who were either cognitively normal (n = 19) or with mild cognitive impairment (n = 3). Neuropsychological, nutritional and dental assessments were performed. The chewing efficiency was evaluated with a two-colour mixing test. RESULTS Demented patients and controls presented with a mean of 4.9 and 6.5 teeth, respectively (n.s.). The number of natural teeth was not associated with dementia (p = 0.553). Same results were found for age (p = 0.746) and sex (p = 0.901). The chewing efficiency by visual inspection proved worse in participants with dementia than in the controls (p < 0.011) and explained 9.3% of the variance in the diagnosis of dementia. Neither dental state nor chewing efficiency was related to the nutritional state. CONCLUSION Chewing efficiency seems stronger associated with cognitive impairment than the number of teeth. Hence, in a more holistic approach for the geriatric assessment, the dental examination may be complemented by a chewing efficiency test.