Limited managerial attention and corporate aging

As firms have more assets in place, more of management’s limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory predicts that Tobin’s q falls with age. Further, competition in the product market is expected to slow down the decrease in Tobin’s q because it forces firms to look for alternative sources of rents. Similarly, greater competition in the labor market reduces the decrease in Tobin’s q with age because old firms are in a better position to hire employees that can help with innovation. In contrast, competition in the market for corporate control should accelerate the decline because it forces management to focus more on managing assets in place whose performance is more directly observable than on developing growth options where results may not be observable for some time. We find strong support for these predictions in tests using exogenous variation in competition.

Limited managerial attention and corporate aging

As firms have more assets in place, more of management’s limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory predicts that Tobin’s q falls with age. Further, competition in the product market is expected to slow down the decrease in Tobin’s q because it forces firms to look for alternative sources of rents. Similarly, greater competition in the labor market reduces the decrease in Tobin’s q with age because old firms are in a better position to hire employees that can help with innovation. In contrast, competition in the market for corporate control should accelerate the decline because it forces management to focus more on managing assets in place whose performance is more directly observable than on developing growth options where results may not be observable for some time. We find strong support for these predictions in tests using exogenous variation in competition

Three Essays on Age and Firm Performance

Old captains at the helm: Chairman age and firm performance Urs Waelchli and Jonas Zeller December, 2012 This paper examines whether the chairmen of the board (COBs) impose their life-cycles on the firms over which they preside. Using a large sample of unlisted firms we find a robust negative relation between COB age and firm performance. COBs age much like ‘ordinary’ people. Their cognitive abilities deteriorate and they experience significant shifts in motivation. Deteriorating cognitive abilities are the main driver of the performance effect that we observe. The results imply that succession planning problems in unlisted firms are real. Mandatory retirement age clauses cannot solve these problems. Corporate Aging around the World Jonas Zeller January, 2014 This paper examines whether firms internationally age as US firms do (Loderer, Stulz, and Wälchli, 2013). Using a large panel, I find that Tobin’s Q monotonically falls with firm Age across all nineteen countries in the sample. The decrease varies across countries but is generally extremely robust and economically significant. ROA, sales growth, and market share decrease over a firm’s lifetime in most countries as well. Furthermore, older firms reduce their capital expenditures and R&D outlays. Instead, they distribute more cash to their shareholders. Overall, the results suggest that corporate aging is not confined to the US but is a genuine phenomenon that affects listed firms worldwide. This evidence supports the hypothesis that corporate aging is driven by managers who optimally focus on managing their assets in place and neglect the development of growth opportunities. I finally ask whether the managers’ choice and with it the magnitude of the decline in Tobin’s Q is a function of country-level institutional settings. I find that most notably firms age faster in countries where employees are relatively well protected by labor regulation. Is employment protection the fountain of corporate youth? Claudio Loderer, Urs Wälchli, Jonas Zeller* September 2014 Acharya, Baghai, and Subramanian (2012, 2013) find that employment protection legislation (EPL) encourages innovation. We argue that this effect should be particularly strong in mature firms. We would therefore also expect EPL to boost growth opportunities. Using the natural Experiment created by the staggered passage of changes in EPL across seventeen countries, we find evidence that employment protection legislation does indeed stimulate Innovation efforts, especially in mature firms. The effect is stronger in countries in which patents are owned by the firm and in the context of regular contracts. Consistent with that, EPL encourages risk taking. Overall, however, there is Little evidence that the effect of EPL on innovation effort translates into higher firm value, not even in mature firms. EPL does motivate employees in those firms to put in a greater effort, as evidenced by stronger sales growth. Yet it also increases costs, reduces profitability, and depresses Tobin’s Q ratios in all firms, especially the mature ones, possibly because of the rigidities that characterize these firms [Loderer, Stulz, and Waelchli (2014)].

Detection and identification of 700 drugs by multi-target screening with a 3200 Q TRAP LC-MS/MS system and library searching

The multi-target screening method described in this work allows the simultaneous detection and identification of 700 drugs and metabolites in biological fluids using a hybrid triple-quadrupole linear ion trap mass spectrometer in a single analytical run. After standardization of the method, the retention times of 700 compounds were determined and transitions for each compound were selected by a "scheduled" survey MRM scan, followed by an information-dependent acquisition using the sensitive enhanced product ion scan of a Q TRAP hybrid instrument. The identification of the compounds in the samples analyzed was accomplished by searching the tandem mass spectrometry (MS/MS) spectra against the library we developed, which contains electrospray ionization-MS/MS spectra of over 1,250 compounds. The multi-target screening method together with the library was included in a software program for routine screening and quantitation to achieve automated acquisition and library searching. With the help of this software application, the time for evaluation and interpretation of the results could be drastically reduced. This new multi-target screening method has been successfully applied for the analysis of postmortem and traffic offense samples as well as proficiency testing, and complements screening with immunoassays, gas chromatography-mass spectrometry, and liquid chromatography-diode-array detection. Other possible applications are analysis in clinical toxicology (for intoxication cases), in psychiatry (antidepressants and other psychoactive drugs), and in forensic toxicology (drugs and driving, workplace drug testing, oral fluid analysis, drug-facilitated sexual assault).

Age and gender-dependent alternative splicing of P/Q-type calcium channel EF-hand

Ca(v)2.1 Ca(2+) channels (P/Q-type), which participate in various key roles in the CNS by mediating calcium influx, are extensively spliced. One of its alternatively-spliced exons is 37, which forms part of the EF hand. The expression of exon 37a (EFa form), but not exon 37b (EFb form), confers the channel an activity-dependent enhancement of channel opening known as Ca(2+)-dependent facilitation (CDF). In this study, we analyzed the trend of EF hand splice variant distributions in mouse, rat and human brain tissues. We observed a developmental switch in rodents, as well as an age and gender bias in human brain tissues, suggestive of a possible role of these EF hand splice variants in neurophysiological specialization. A parallel study performed on rodent brains showed that the data drawn from human and rodent tissues may not necessarily correlate in the process of aging.