Wealth effects of mergers and acquisitions for US firms: using alternative pricing models

This empirical study employs a different methodology to examine the change in wealth associated with mergers and acquisitions (M&As) for US firms. Specifically, we employ the standard CAPM, the Fama-French three-factor model and the Carhart four-factor models within the OLS and GJR-GARCH estimation methods to test the behaviour of the cumulative abnormal returns (CARs). Whilst the standard CAPM captures the variability of stock returns with the overall market, the Fama-French factors capture the risk factors that are important to investors. Additionally, augmenting the Fama-French three-factor model with the Carhart momentum factor to generate the four-factor captures additional pricing elements that may affect stock returns. Traditionally, estimates of abnormal returns (ARs) in M&As situations rely on the standard OLS estimation method. However, the standard OLS will provide inefficient estimates of the ARs if the data contain ARCH and asymmetric effects. To minimise this problem of estimation efficiency we re-estimated the ARs using GJR-GARCH estimation method. We find that there is variation in the results both as regards the choice models and estimation methods. Besides these variations in the estimated models and the choice of estimation methods, we also tested whether the ARs are affected by the degree of liquidity of the stocks and the size of the firm. We document significant positive post-announcement cumulative ARs (CARs) for target firm shareholders under both the OLS and GJR-GARCH methods across all three methodologies. However, post-event CARs for acquiring firm shareholders were insignificant for both sets of estimation methods under the three methodologies. The GJR-GARCH method seems to generate larger CARs than those of the OLS method. Using both market capitalization and trading volume as a measure of liquidity and the size of the firm, we observed strong return continuations in the medium firms relative to small and large firms for target shareholders. We consistently observed market efficiency in small and large firm. This implies that target firms for small and large firms overreact to new information resulting in a more efficient market. For acquirer firms, our measure of liquidity captures strong return continuations for small firms under the OLS estimates for both CAPM and Fama-French three-factor models, whilst under the GJR-GARCH estimates only for Carhart model. Post-announcement bootstrapping simulated CARs confirmed our earlier results.

Predicting adult occupational environments from childhood personality traits

To test aspects of a theory of the role of personality and gender on the development of vocational interests and their subsequent effects on adult occupational choices, the authors of this study examined associations among childhood personality traits, gender, and occupational environments more than 40 years later. Participants (N = 587) were assessed on the Big Five by their teachers when the participants were between 6 and 12 years old. In middle-age (late 40s), the participants reported their occupation. Holland's (1997) RIASEC vocational types (Realistic, Investigative, Artistic, Social, Enterprising, Conventional) were used to characterize the job environments of reported occupations. Childhood Openness/Intellect and Conscientiousness, but no other Big Five traits, were associated with occupational environments. For the most strongly sex-typed work environments, associations with Openness/Intellect were moderated by gender. These findings suggest that the roots of the strongest gender-stereotyping effects in occupations may be found not only in the social factors associated with gender but also in the individual differences of children related to Openness/Intellect.

Development of an in-vitro model system to investigate the mechanism of muscle protein catabolism induced by proteolysis-inducing factor

The mechanism of muscle protein catabolism induced by proteolysis-inducing factor, produced by cachexia-inducing murine and human tumours has been studied in vitro using C2C12 myoblasts and myotubes. In both myoblasts and myotubes protein degradation was enhanced by proteolysis-inducing factor after 24 h incubation. In myoblasts this followed a bell-shaped dose-response curve with maximal effects at a proteolysis-inducing factor concentration between 2 and 4 nM, while in myotubes increased protein degradation was seen at all concentrations of proteolysis-inducing factor up to 10 nM, again with a maximum of 4 nM proteolysis-inducing factor. Protein degradation induced by proteolysis-inducing factor was completely attenuated in the presence of cycloheximide (1 μM), suggesting a requirement for new protein synthesis. In both myoblasts and myotubes protein degradation was accompanied by an increased expression of the α-type subunits of the 20S proteasome as well as functional activity of the proteasome, as determined by the 'chymotrypsin-like' enzyme activity. There was also an increased expression of the 19S regulatory complex as well as the ubiquitin-conjugating enzyme (E214k), and in myotubes a decrease in myosin expression was seen with increasing concentrations of proteolysis-inducing factor. These results show that proteolysis-inducing factor co-ordinately upregulates both ubiquitin conjugation and proteasome activity in both myoblasts and myotubes and may play an important role in the muscle wasting seen in cancer cachexia. © 2002 Cancer Research UK.

Model thrombi formed under flow reveal the role of factor XIII-mediated cross-linking in resistance to fibrinolysis

Background: Activated factor XIII (FXIIIa), a transglutaminase, introduces fibrin-fibrin and fibrin-inhibitor cross-links, resulting in more mechanically stable clots. The impact of cross-linking on resistance to fibrinolysis has proved challenging to evaluate quantitatively. Methods: We used a whole blood model thrombus system to characterize the role of cross-linking in resistance to fibrinolytic degradation. Model thrombi, which mimic arterial thrombi formed in vivo, were prepared with incorporated fluorescently labeled fibrinogen, in order to allow quantification of fibrinolysis as released fluorescence units per minute. Results: A site-specific inhibitor of transglutaminases, added to blood from normal donors, yielded model thrombi that lysed more easily, either spontaneously or by plasminogen activators. This was observed both in the cell/platelet-rich head and fibrin-rich tail. Model thrombi from an FXIII-deficient patient lysed more quickly than normal thrombi; replacement therapy with FXIII concentrate normalized lysis. In vitro addition of purified FXIII to the patient's preprophylaxis blood, but not to normal control blood, resulted in more stable thrombi, indicating no further efficacy of supraphysiologic FXIII. However, addition of tissue transglutaminase, which is synthesized by endothelial cells, generated thrombi that were more resistant to fibrinolysis; this may stabilize mural thrombi in vivo. Conclusions: Model thrombi formed under flow, even those prepared as plasma 'thrombi', reveal the effect of FXIII on fibrinolysis. Although very low levels of FXIII are known to produce mechanical clot stability, and to achieve ?-dimerization, they appear to be suboptimal in conferring full resistance to fibrinolysis.

A dynamic model of the hypoxia-inducible factor 1α (HIF-1α) network

Activation of the hypoxia-inducible factor (HIF) pathway is a critical step in the transcriptional response to hypoxia. Although many of the key proteins involved have been characterised, the dynamics of their interactions in generating this response remain unclear. In the present study, we have generated a comprehensive mathematical model of the HIF-1a pathway based on core validated components and dynamic experimental data, and confirm the previously described connections within the predicted network topology. Our model confirms previous work demonstrating that the steps leading to optimal HIF-1a transcriptional activity require sequential inhibition of both prolyl- and asparaginyl-hydroxylases. We predict from our model (and confirm experimentally) that there is residual activity of the asparaginyl-hydroxylase FIH (factor inhibiting HIF) at low oxygen tension. Furthermore, silencing FIH under conditions where prolyl-hydroxylases are inhibited results in increased HIF-1a transcriptional activity, but paradoxically decreases HIF-1a stability. Using a core module of the HIF network and mathematical proof supported by experimental data, we propose that asparaginyl hydroxylation confers a degree of resistance upon HIF-1a to proteosomal degradation. Thus, through in vitro experimental data and in silico predictions, we provide a comprehensive model of the dynamic regulation of HIF-1a transcriptional activity by hydroxylases and use its predictive and adaptive properties to explain counter-intuitive biological observations.

A four-factor user interaction model for content-based image retrieval

In order to bridge the “Semantic gap”, a number of relevance feedback (RF) mechanisms have been applied to content-based image retrieval (CBIR). However current RF techniques in most existing CBIR systems still lack satisfactory user interaction although some work has been done to improve the interaction as well as the search accuracy. In this paper, we propose a four-factor user interaction model and investigate its effects on CBIR by an empirical evaluation. Whilst the model was developed for our research purposes, we believe the model could be adapted to any content-based search system.

The sciatic nerve of the toad Xenopus laevis as a physiological model of the human cochlear nerve

The response of single fibres of the human cochlear nerve to electrical stimulation by a cochlear implant has previously been inferred from the response of the cochlear nerve in other mammals. These experiments are hindered by stimulus artefact and the range of stimulus currents used is therefore much less than the perceptual dynamic range (from threshold to discomfort) of human subjects. We have investigated use of the sciatic nerve of the toad Xenopus laevis as a convenient physiological model of the human cochlear nerve. Use of this completely dissected nerve reduces the problems of stimulus artefact whilst maintaining the advantages of a physiological preparation. The validity of the model was assessed by measuring the refractory periods, excitation time-constant, and relative spread of single fibres using microelectrode recording. We have also investigated the response of nerve fibres to sinusoidal stimulation. Based on these measurements, we propose that the sciatic nerve may be a suitable model of the human cochlear nerve if the timescales of stimuli are decreased by a factor of about five to compensate for the slower dynamics of the sciatic nerve and if noise is added to the stimuli to compensate for the lower internal noise of sciatic nerve fibres.

Brain-derived neurotrophic factor as an indicator of chemical neurotoxicity:an animal-free CNS cell culture model

Recent changes to the legislation on chemicals and cosmetics testing call for a change in the paradigm regarding the current 'whole animal' approach for identifying chemical hazards, including the assessment of potential neurotoxins. Accordingly, since 2004, we have worked on the development of the integrated co-culture of post-mitotic, human-derived neurons and astrocytes (NT2.N/A), for use as an in vitro functional central nervous system (CNS) model. We have used it successfully to investigate indicators of neurotoxicity. For this purpose, we used NT2.N/A cells to examine the effects of acute exposure to a range of test chemicals on the cellular release of brain-derived neurotrophic factor (BDNF). It was demonstrated that the release of this protective neurotrophin into the culture medium (above that of control levels) occurred consistently in response to sub-cytotoxic levels of known neurotoxic, but not non-neurotoxic, chemicals. These increases in BDNF release were quantifiable, statistically significant, and occurred at concentrations below those at which cell death was measureable, which potentially indicates specific neurotoxicity, as opposed to general cytotoxicity. The fact that the BDNF immunoassay is non-invasive, and that NT2.N/A cells retain their functionality for a period of months, may make this system useful for repeated-dose toxicity testing, which is of particular relevance to cosmetics testing without the use of laboratory animals. In addition, the production of NT2.N/A cells without the use of animal products, such as fetal bovine serum, is being explored, to produce a fully-humanised cellular model.