Do external funds yield lower returns? Recent evidence from East Asian economies

One of the central explanations of the recent Asian Crisis has been the problem of moral hazard as the source of over-investment and excessive external borrowing. There is however rather limited firm-level empirical evidence to characterise inefficient use of internal and external finances. Using a large firm-level panel data-set from four badly affected Asian countries, this paper compares the rates of return to various internal and external funds among firms with low and high debt financing (relative to equity) among financially constrained and other firms. Selectivity-corrected estimates obtained from random effects panel data model do suggest evidence of significantly lower rates of return to long-term debt, even among firms relying more on debt relative to equity in our sample. There is also evidence that average effective interest rates often significantly exceeded the average returns to long-term debt in the sample countries in the pre-crisis period. © 2006 Elsevier Inc. All rights reserved.

Midterm to long-term longitudinal outcome of autologous chondrocyte implantation in the knee joint:a multilevel analysis

Background Autologous chondrocyte implantation is a cell therapeutic approach for the treatment of chondral and osteochondral defects in the knee joint. The authors previously reported on the histologic and radiologic outcome of autologous chondrocyte implantation in the short- to midterm, which yields mixed results. Purpose The objective is to report on the clinical outcome of autologous chondrocyte implantation for the knee in the midterm to long term. Study Design Cohort study; Level of evidence, 3. Methods Eighty patients who had undergone autologous chondrocyte implantation of the knee with mid- to long-term follow-up were analyzed. The mean patient age was 34.6 years (standard deviation, 9.1 years), with 63 men and 17 women. Seventy-one patients presented with a focal chondral defect, with a median defect area of 4.1 cm2 and a maximum defect area of 20 cm2. The modified Lysholm score was used as a self-reporting clinical outcome measure to determine the following: (1) What is the typical pattern over time of clinical outcome after autologous chondrocyte implantation; and (2) Which patient-related predictors for the clinical outcome pattern can be used to improve patient selection for autologous chondrocyte implantation? Results The average follow-up time was 5 years (range, 2.7–9.3). Improvement in clinical outcome was found in 65 patients (81%), while 15 patients (19%) showed a decline in outcome. The median preoperative Lysholm score of 54 increased to a median of 78 points. The most rapid improvement in Lysholm score was over the 15-month period after operation, after which the Lysholm score remained constant for up to 9 years. The authors were unable to identify any patient-specific factors (ie, age, gender, defect size, defect location, number of previous operations, preoperative Lysholm score) that could predict the change in clinical outcome in the first 15 months. Conclusion Autologous chondrocyte implantation seems to provide a durable clinical outcome in those patients demonstrating success at 15 months after operation. Comparisons between other outcome measures of autologous chondrocyte implantation should be focused on the clinical status at 15 months after surgery. The patient-reported clinical outcome at 15 months is a major predictor of the mid- to long-term success of autologous chondrocyte implantation.

Innovation in the pharmaceutical industry:a study of the effects of regulation on the U.K. pharmaceutical industry

A history of government drug regulation and the relationship between the pharmaceutical companies in the U.K. and the licensing authority is outlined. Phases of regulatory stringency are identified with the formation of the Committees on Safety of Drugs and Medicines viewed as watersheds. A study of the impact of government regulation on industrial R&D activities focuses on the effects on the rate and direction of new product innovation. A literature review examines the decline in new chemical entity innovation. Regulations are cited as a major but not singular cause of the decline. Previous research attempting to determine the causes of such a decline on an empirical basis is given and the methodological problems associated with such research are identified. The U.K. owned sector of the British pharmaceutical industry is selected for a study employing a bottom-up approach allowing disaggregation of data. A historical background to the industry is provided, with each company analysed or a case study basis. Variations between companies regarding the policies adopted for R&D are emphasised. The process of drug innovation is described in order to determine possible indicators of the rate and direction of inventive and innovative activity. All possible indicators are considered and their suitability assessed. R&D expenditure data for the period 1960-1983 is subsequently presented as an input indicator. Intermediate output indicators are treated in a similar way and patent data are identified as a readily-available and useful source. The advantages and disadvantages of using such data are considered. Using interview material, patenting policies for most of the U.K. companies are described providing a background for a patent-based study. Sources of patent data are examined with an emphasis on computerised systems. A number of searches using a variety of sources are presented. Patent family size is examined as a possible indicator of an invention's relative importance. The patenting activity of the companies over the period 1960-1983 is given and the variation between companies is noted. The relationship between patent data and other indicators used is analysed using statistical methods resulting in an apparent lack of correlation. An alternative approach taking into account variations in company policy and phases in research activity indicates a stronger relationship between patenting activity, R&D Expenditure and NCE output over the period. The relationship is not apparent at an aggregated company level. Some evidence is presented for a relationship between phases of regulatory stringency, inventive and innovative activity but the importance of other factors is emphasised.

The 2012 update to the anticholinergic cognitive burden scale

Background: In 2008, the Anticholinergic Cognitive Burden (ACB) scale was generated through a combination of laboratory data, literature review, and expert opinion. This scale identified an increased risk in mortality and worsening cognitive function in multiple populations, including 13,000 older adults in the United Kingdom. We present an updated scale based on new information and new medications available to the market. Methods: We conducted a systematic review for publications recognizing medications with adverse cognitive effects due to anti-cholinergic properties and found no new medications since 2008.Therefore we identified medications from a review of newly ap-proved medications since 2008 and medications identified throughthe clinical experience of the authors. To be included in the updatedACB scale, medications must have met the following criteria; ACBscore of 1: evidence from in vitro data that the medication has antag-onist activity at muscarinic receptors; ACB score of 2: evidence fromliterature, prescriber’s information, or expert opinion of clinical anti-cholinergic effect; ACB score of 3: evidence from literature, pre-scriber’s information, or expert opinion of the medication causingdelirium. Results: The reviewer panel included two geriatric pharmacists,one geriatric psychiatrist, one geriatrician, and one hospitalist.Twenty-three medications were eligible for review and possible inclu-sion in the updated ACB scale. Of these, seven medications were ex-cluded due to a lack of evidence for anticholinergic activity. Of the re-maining 16 medications, ten had laboratory evidence ofanticholinergic activity and added to the ACB list with a score of one.One medication was added with a score of two. Five medicationswere included in the ACB scale with a score of three.Conclusions: The revised ACB scale provides an update of med-ications with anticholinergic effects that may increase the risk of cog-nitive impairment. Future updates will be routinely conducted tomaintain an applicable library of medications for use in clinical andresearch environments.

Phosphatidylserine-containing liposomes:modulators of rhinovirus induced inflammatory responses

Background: Human rhinoviral infections are major contributors to the healthcare burden associated with acute exacerbations of asthma. We, and others have recently demonstrated that rhinovirus (RV)-induced inflammatory responses are mediated by multiple signalling mechanisms, such as IL-1/MyD88 (1) and TLR3/RIGI (2). We have also previously published work showing that TLR signalling is effectively inhibited by phosphatidylserine-containing liposomes (SAPS), through the disruption of membrane microdomains (3). Evidence has also suggested that membrane microdomains may influence infections with RV. In this study, we explored the ability of SAPS to modulate responses to the natural viral pathogens, RV-1B and RV-16. Method: The immortalized bronchial epithelial cell line, BEAS-2B or primary bronchial epithelial cells were infected with RV-1B or RV-16 at a TCID50/ml of 19107 for 1 h. Immediately following infection, various concentrations of SAPS were added and changes in cytokine release were measured at 24 h. SAPS remained present throughout. Type I and III interferon (IFN) expression and rates of viral replication were measured by quantitative PCR. Virus quantification was also performed using a viral CPE assay, and IFN signalling was measured by western blot. Liposome stability was characterised and intracellular trafficking of fluorescently labelled SAPS in BEAS-2B cells was investigated using confocal microscopy. For in vivo studies, female wt Balb/c mice were pre-treated with SAPS for 2 h prior to infection with RV as previously described and changes in BAL cell number, BAL cytokine production and viral replication were quantified (4). Results: Characterisation of SAPS liposomes by mass spectrometry showed no obvious signs of oxidation over the time period tested, and liposome size remained constant. Preliminary confocal studies revealed that SAPS was rapidly internalised within the cell and was found to associate with intracellular compartments such as the early endosome and golgi. Viral infected BEAS-2B cells co-incubated with SAPS, showed notably impaired responses to RV as assessed by release of CXCL8 and CCL5. SAPS also reduced RV-induced IFNb production and STAT-1 phosphorylation, without significantly influencing viral replication rates. Modest increases in viral particle production were only observed at 48 and 72 h time points. Suppression of viral-induced cytokine production was also observed in primary bronchial epithelial cells and pilot in vivo studies showed that SAPS results in reduced KC production at 24 h post viral infection, and this was associated with reduced neutrophil numbers within the BAL fluid. Conclusion: Our data demonstrates a potential means of modulating inflammatory responses induced by human rhinovirus.

Does human capital endowment of foreign direct investment recipient countries really matter? evidence from cross-country firm level data

The stylized literature on foreign direct investment (FDI) suggests that developing countries should invest in the human capital of their labor force in order to attract FDI. However, if educational quality in developing country is uncertain such that formal education is a noisy signal of human capital, it might be rational for multinational enterprises to focus more on job-specific training than on formal education of the labor force. Using cross-country data from the textiles and garments industry, we demonstrate that training indeed has a greater impact on firm efficiency in developing countries than formal education of the workforce. © 2013 John Wiley & Sons Ltd.

Big 4 audit fee premiums for national and office-level industry leadership in the United Kingdom

The pricing of Big 4 industry leadership Is examined for a sample of U.K. publicly-listed companies, and adds to the evidence from the Australian and U.S. audit markets that city-specific industry leadership commands a fee premium. There is a significant fee premium for city-specific industry leaders relative to other Big 4 auditors, but no evidence that either the top-ranked or second-ranked firm nationally commands a fee premium relative to other Big 4 auditors, after controlling for city-level industry leadership. We also test for Big 4 fee premiums relative to non-Big 4 auditors and the U.K. data suggest a three-level hierarchy based on audit fee differentials: (1) Big 4 city-specific industry leaders have the largest fees; (2) other Big 4 auditors (noncity leaders) and second-tier national firms have comparable fees that are lower than Big 4 city leaders but larger than third-tier firms; and (3) third-tier accounting firms have the lowest fees.

How does ownership structure affect capital structure and firm value?:Recent evidence from East Asia

The present paper examines the effects of ownership structures on capital structure and firm valuation. It argues that the effects of separation of control from cash flow rights on capital structure and firm value also depend on the separation of control from management as well as on legal rules and enforcement defining investors' protection. We obtain firm-level panel data (three stage least squares, 3SLS) estimates from four of the East Asian countries worst affected by the last crisis. There is evidence that the general wisdom that higher control than cash flow rights may lower firm value may be reversed among owner-managed family firms in the sample countries. © 2007 The Authors Journal compilation © 2007 The European Bank for Reconstruction and Development.

Regional foreign direct investment and wage spillovers:plant level evidence from the UK electronics industry

This paper examines the extent to which foreign investment in the UK generates wage spillovers in the domestic sector of the economy using a simultaneous dynamic panel data model and focusing on the electronics sector, possibly the most ‘globalized’ sector of UK manufacturing. It finds evidence that the higher wages paid by foreign firms cause wages in the domestic sector to be bid up. This phenomenon is, however, largely confined to the region where foreign direct investment takes place.

Evidence that interaction between conserved residues in transmembrane helices 2, 3, and 7 are crucial for human VPAC1 receptor activation

The VPAC(1) receptor belongs to family B of G protein-coupled receptors (GPCR-B) and is activated upon binding of the vasoactive intestinal peptide (VIP). Despite the recent determination of the structure of the N terminus of several members of this receptor family, little is known about the structure of the transmembrane (TM) region and about the molecular mechanisms leading to activation. In the present study, we designed a new structural model of the TM domain and combined it with experimental mutagenesis experiments to investigate the interaction network that governs ligand binding and receptor activation. Our results suggest that this network involves the cluster of residues Arg(188) in TM2, Gln(380) in TM7, and Asn(229) in TM3. This cluster is expected to be altered upon VIP binding, because Arg(188) has been shown previously to interact with Asp(3) of VIP. Several point mutations at positions 188, 229, and 380 were experimentally characterized and were shown to severely affect VIP binding and/or VIP-mediated cAMP production. Double mutants built from reciprocal residue exchanges exhibit strong cooperative or anticooperative effects, thereby indicating the spatial proximity of residues Arg(188), Gln(380), and Asn(229). Because these residues are highly conserved in the GPCR-B family, they can moreover be expected to have a general role in mediating function.

Evidence of a transition from perceptual to category induction in 3- to 9-year-old children

We examined whether inductive reasoning development is better characterized by accounts assuming an early category bias versus an early perceptual bias. We trained 264 children aged 3 to 9 years to categorize novel insects using a rule that directly pitted category membership against appearance. This was followed by an induction task with perceptual distractors at different levels of featural similarity. An additional 52 children were given the same training followed by an induction task with alternative stimuli. Categorization performance was consistently high, however we found a gradual transition from a perceptual bias in our youngest children to a category bias around age 6-7. In addition, children of all ages were equally distracted by higher levels of featural similarity. The transition is unlikely to be due to an increased ability to inhibit perceptual distractors. Instead, we argue that the transition is driven by a fundamental change in children’s understanding of category membership.

Can production subsidies explain China's export performance? Evidence from firm-level data

This paper analyses the relationship between production subsidies and firms’ export performance using a very comprehensive and recent firm-level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity at the intensive margin, although this effect is conditional on firm characteristics. In particular, the positive relationship between subsidies and the intensive margin of exports is strongest among profit-making firms, firms in capital-intensive industries, and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives, and privately owned firms) proves to be relatively less important.

Firm size, source of finance, and growth:evidence from China

Using a comprehensive firm-level data set from China spanning the period 1998–2005, this study investigates the relationship between firm size, financing sources, and total factor productivity growth. Controlling for the endogeneity of financing sources, we find that firm size plays an important role in the way financial structure affects the growth process. Domestic bank loans are more effective for bigger firms, while self-raised finance is more beneficial to smaller firms’ growth. We also uncover evidence that ownership mediates the relationship between firm size, finance, and growth.

Does human capital endowment of FDI recipient countries really matter? Evidence from cross-country firm level data

The stylized literature on foreign direct investment suggests that developing countries should invest in the human capital of their labour force in order to attract foreign direct investment. However, if educational quality in developing country is uncertain such that formal education is a noisy signal of human capital, it might be rational for multinational enterprises to focus more on job-specific training than on formal education of the labour force. Using cross-country data from the textiles and garments industry, we demonstrate that training indeed has greater impact on firm efficiency in developing countries than formal education of the work force.

Is the post-reform growth of the Indian manufacturing sector efficiency driven? Empirical evidence from plant level data

It is generally believed that the structural reforms that were introduced in India following the macro-economic crisis of 1991 ushered in competition and forced companies to become more efficient. However, whether the post-1991 growth is an outcome of more efficient use of resources or greater use of factor inputs remains an open empirical question. In this paper, we use plant-level data from 1989–1990 and 2000–2001 to address this question. Our results indicate that while there was an increase in the productivity of factor inputs during the 1990s, most of the growth in value added is explained by growth in the use of factor inputs. We also find that median technical efficiency declined in all but one of the industries between 1989–1990 and 2000–2001, and that change in technical efficiency explains a very small proportion of the change in gross value added.