Nonlinear dynamics in discretionary accruals: An analysis of bank loan-loss provisions

Several studies have analyzed discretionary accruals to address earnings-smoothing behaviors in the banking industry. We argue that the characteristic link between accruals and earnings may be nonlinear, since both the incentives to manipulate income and the practical way to do so depend partially on the relative size of earnings. Given a sample of 15,268 US banks over the period 1996–2011, the main results in this paper suggest that, depending on the size of earnings, bank managers tend to engage in earnings-decreasing strategies when earnings are negative (“big-bath”), use earnings-increasing strategies when earnings are positive, and use provisions as a smoothing device when earnings are positive and substantial (“cookie-jar” accounting). This evidence, which cannot be explained by the earnings-smoothing hypothesis, is consistent with the compensation theory. Neglecting nonlinear patterns in the econometric modeling of these accruals may lead to misleading conclusions regarding the characteristic strategies used in earnings management.

A Multiplex Real-Time PCR with High Resolution Melting Analysis for the Characterization of Antimicrobial Resistance in Neisseria gonorrhoeae.

Resistance to antibiotics used against Neisseria gonorrhoeae infections is a major public health concern. Antimicrobial resistance (AMR) testing relies on time-consuming culture-based methods. Development of rapid molecular tests for detecting AMR determinants could provide valuable tools for surveillance, epidemiological studies and to inform individual case management. We developed a fast (<1.5 hrs) SYBR-green based real-time PCR method with high resolution melting (HRM) analysis. One triplex and three duplex reactions included two sequences for N. gonorrhoeae identification and seven determinants of resistance to extended-spectrum cephalosporins (ESCs), azithromycin, ciprofloxacin, and spectinomycin. The method was validated by testing 39 previously fully-characterized N. gonorrhoeae strains, 19 commensal Neisseria spp., and an additional panel of 193 gonococcal isolates. Results were compared with culture-based AMR determination. The assay correctly identified N. gonorrhoeae and the presence or absence of the seven AMR determinants. There was some cross-reactivity with non-gonococcal Neisseria species and the detection limit was 10(3)-10(4) gDNA copies/reaction. Overall, the platform accurately detected resistance to ciprofloxacin (sensitivity and specificity, 100%), ceftriaxone (sensitivity 100%, specificity 90%), cefixime (sensitivity 92%, specificity 94%), azithromycin and spectinomycin (both sensitivity and specificity, 100%). In conclusion, our methodology accurately detects mutations generating resistance to antibiotics used to treat gonorrhea. Low assay sensitivity prevents direct diagnostic testing of clinical specimens but this method can be used to screen collections of gonococcal isolates for AMR more quickly than with current culture-based AMR testing.

Nonlinear dynamics of a satellite with deployable solar panel arrays

The multibody dynamics of a satellite in circular orbit, modeled as a central body with two hinge-connected deployable solar panel arrays, is investigated. Typically, the solar panel arrays are deployed in orbit using preloaded torsional springs at the hinges in a near symmetrical accordion manner, to minimize the shock loads at the hinges. There are five degrees of freedom of the interconnected rigid bodies, composed of coupled attitude motions (pitch, yaw and roll) of the central body plus relative rotations of the solar panel arrays. The dynamical equations of motion of the satellite system are derived using Kane's equations. These are then used to investigate the dynamic behavior of the system during solar panel deployment via the 7-8th-order Runge-Kutta integration algorithms and results are compared with approximate analytical solutions. Chaotic attitude motions of the completely deployed satellite in circular orbit under the influence of the gravity-gradient torques are subsequently investigated analytically using Melnikov's method and confirmed via numerical integration. The Hamiltonian equations in terms of Deprit's variables are used to facilitate the analysis. (C) 2003 Published by Elsevier Ltd.

Relationships of Efficiency to Reproductive Disorders in Danish Milk Production: A Stochastic Frontier Analysis

Relationships of various reproductive disorders and milk production performance of Danish dairy farms were investigated. A stochastic frontier production function was estimated using data collected in 1998 from 514 Danish dairy farms. Measures of farm-level milk production efficiency relative to this production frontier were obtained, and relationships between milk production efficiency and the incidence risk of reproductive disorders were examined. There were moderate positive relationships between milk production efficiency and retained placenta, induction of estrus, uterine infections, ovarian cysts, and induction of birth. Inclusion of reproductive management variables showed that these moderate relationships disappeared, but directions of coefficients for almost all those variables remained the same. Dystocia showed a weak negative correlation with milk production efficiency. Farms that were mainly managed by young farmers had the highest average efficiency scores. The estimated milk losses due to inefficiency averaged 1142, 488, and 256 kg of energy-corrected milk per cow, respectively, for low-, medium-, and high-efficiency herds. It is concluded that the availability of younger cows, which enabled farmers to replace cows with reproductive disorders, contributed to high cow productivity in efficient farms. Thus, a high replacement rate more than compensates for the possible negative effect of reproductive disorders. The use of frontier production and efficiency/ inefficiency functions to analyze herd data may enable dairy advisors to identify inefficient herds and to simulate the effect of alternative management procedures on the individual herd's efficiency.

Energy consumption, economic growth and prices: A reassessment using panel VECM for developed and developing countries

This paper reinvestigates the energy consumption-GDP growth nexus in a panel error correction model using data on 20 net energy importers and exporters from 1971 to 2002. Among the energy exporters, there was bidirectional causality between economic growth and energy consumption in the developed countries in both the short and long run, while in the developing countries energy consumption stimulates growth only in the short run. The former result is also found for energy importers and the latter result exists only for the developed countries within this category. In addition, compared to the developing countries, the developed countries' elasticity response in terms of economic growth from an increase in energy consumption is larger although its income elasticity is lower and less than unitary. Lastly. the implications for energy policy calling for a more holistic approach are discussed. (c) 2006 Elsevier Ltd. All rights reserved.

Comparison of ASAS improvement criteria for ankylosing spondylitis with clinically relevant improvement according to an expert panel

Objective: To investigate whether the recently developed (statistically derived) "ASsessment in Ankylosing Spondylitis Working Group" improvement criteria (ASAS-IC) for ankylosing spondylitis (AS) reflect clinically relevant improvement according to the opinion of an expert panel. Methods: The ASAS-IC consist of four domains: physical function, spinal pain, patient global assessment, and inflammation. Scores on these four domains of 55 patients with AS, who had participated in a non-steroidal anti-inflammatory drug efficacy trial, were presented to an international expert panel (consisting of patients with AS and members of the ASAS Working Group) in a three round Delphi exercise. The number of (non-) responders according to the ASAS-IC was compared with the final-consensus of the experts. The most important domains in the opinion of the experts were identified, and also selected with discriminant analysis. A number of provisional criteria sets that best represented the consensus of the experts were defined. Using other datasets, these clinically derived criteria sets as well as the statistically derived ASAS-IC were then tested for discriminative properties and for agreement with the end of trial efficacy by patient and doctor. Results: Forty experts completed the three Delphi rounds. The experts considered twice as many patients to be responders than the ASAS-IC (42 v 21). Overall agreement between experts and ASAS-IC was 62%. Spinal pain was considered the most important domain by most experts and was also selected as such by discriminant analysis. Provisional criteria sets with an agreement of greater than or equal to 80% compared with the consensus of the experts showed high placebo response rates (27-42%), in contrast with the ASAS-IC with a predefined placebo response rate of 25%. All criteria sets and the ASAS-IC discriminated well between active and placebo treatment (chi(2) = 36-45; p < 0.001). Compared with the end of trial efficacy assessment, the provisional criteria sets showed an agreement of 71-82%, sensitivity of 67-83%, and specificity of 81-88%. The ASAS-IC showed an agreement of 70%, sensitivity of 62%, and specificity of 89%. Conclusion: The ASAS-IC are strict in defining response, are highly specific, and consequently show lower sensitivity than the clinically derived criteria sets. However, those patients who are considered as responders by applying the ASAS-IC are acknowledged as such by the expert panel as well as by. patients' and doctors' judgments, and are therefore likely to be true responders.

Analysis of Acanthamoeba polyphaga surface carbohydrate exposure by FITC-lectin binding and flourescence evaluation

Aims: Characterization of the representative protozoan Acanthamoeba polyphaga surface carbohydrate exposure by a novel combination of flow cytometry and ligand-receptor analysis. Methods and Results: Trophozoite and cyst morphological forms were exposed to a panel of FITC-lectins. Population fluorescence associated with FITC-lectin binding to acanthamoebal surface moieties was ascertained by flow cytometry. Increasing concentrations of representative FITC-lectins, saturation binding and determination of K d and relative Bmax values were employed to characterize carbohydrate residue exposure. FITC-lectins specific for N-acetylglucosamine, N-acetylgalactosamine and mannose/glucose were readily bound by trophozoite and cyst surfaces. Minor incremental increases in FITC-lectin concentration resulted in significant differences in surface fluorescence intensity and supported the calculation of ligand-binding determinants, Kd and relative B max, which gave a trophozoite and cyst rank order of lectin affinity and surface receptor presence. Conclusions: Trophozoites and cysts expose similar surface carbohydrate residues, foremost amongst which is N-acetylglucosamine, in varying orientation and availability. Significance and Impact of the Study: The outlined versatile combination of flow cytometry and ligand-receptor analysis allowed the characterization of surface carbohydrate exposure by protozoan morphological forms and in turn will support a valid comparison of carbohydrate exposure by other single-cell protozoa and eucaryotic microbes analysed in the same manner.

Technology sourcing versus technology exploitation:An analysis of US foreign direct investment flows

The traditional paradigm of foreign direct investment (FDI) suggests that FDI is undertaken principally to exploit some firm-specific advantage in a foreign country which provides a locational advantage to the investor. However, recent theoretical work suggests a model of FDI in which the motivation is not to exploit existing technological advantages in a foreign country, but to access such technology and transfer it from the host economy to the investing multinational corporation via spillover effects. This paper tests the technology sourcing versus technology exploiting hypotheses for a panel of sectoral FDI flows between the United States and major OECD nations over a 15 year period. The research makes use of Patel and Vega's (Research Policy, 28, 145-55, 1999) taxonomy of sectors which are likely a priori to exhibit technology sourcing and exploiting behaviour respectively. While there is evidence that FDI flows into the United States are attracted to R and D intensive sectors, very little support is found for the technology sourcing hypothesis either for inward or outward FDI flows. The results suggest that, in aggregate, firm-specific 'ownership' effects remain powerful determinants of FDI flows.

Economists' perceptions versus managers' decisions:an experiment in transaction cost analysis

Are the perceptions of professional economists on transaction costs consistent with make-or-buy decisions made within firms? The answer may have important implications for transaction cost research. Data on firms' outsourcing during the new product development process are taken from a largescale survey of UK, German and Irish manufacturing plants, and we test the consistency of these outsourcing decisions with the predictions derived from the transaction cost perceptions of a panel of economists. Little consistency is evident between actual outsourcing patterns and the predictions of the (Williamsonian) transactions cost model derived from the panel of economists. There is, however, evidence of a systematic pattern to the differences, suggesting that a competence or resource-based approach may be relevant to understanding firm outsourcing, and that firms are adopting a strategic approach to managing their external relationships. © Cambridge Political Economy Society 2005; all rights reserved.

Macro determinants of FDI inflows to Japan:an analysis of source country characteristics

This paper examines the source country determinants of FDI into Japan. The paper highlights certain methodological and theoretical weaknesses in the previous literature and offers some explanations for hitherto ambiguous results. Specifically, the paper highlights the importance of panel data analysis, and the identification of fixed effects in the analysis rather than simply pooling the data. Indeed, we argue that many of the results reported elsewhere are a feature of this mis-specification. To this end, pooled, fixed effects and random effects estimates are compared. The results suggest that FDI into Japan is inversely related to trade flows, such that trade and FDI are substitutes. Moreover, the results also suggest that FDI increases with home country political and economic stability. The paper also shows that previously reported results, regarding the importance of exchange rates, relative borrowing costs and labour costs in explaining FDI flows, are sensitive to the econometric specification and estimation approach. The paper also discusses the importance of these results within a policy context. In recent years Japan has sought to attract FDI, though many firms still complain of barriers to inward investment penetration in Japan. The results show that cultural and geographic distance are only of marginal importance in explaining FDI, and that the results are consistent with the market-seeking explanation of FDI. As such, the attitude to risk in the source country is strongly related to the size of FDI flows to Japan. © 2007 The Authors Journal compilation © 2007 Blackwell Publishing Ltd.

The innovation decision:an economic analysis

Studies of the determinants and effects of innovation commonly make an assumption about the way in which firms make the decision to innovate, but rarely test this assumption. Using a panel of Irish manufacturing firms we test the performance of two alternative models of the innovation decision, and find that a two-stage model (the firm decides whether to innovate, then whether to perform product only, process only or both) outperforms a one-stage, simultaneous model. We also find that external knowledge sourcing affects the innovation decision and the type of innovation undertaken in a way not previously recognised in the literature. © 2007 Elsevier Ltd. All rights reserved.

The appraisal and management of multi-storey dwelling blocks using large concrete panel systems

This exploratory study is concerned with the integrated appraisal of multi-storey dwelling blocks which incorporate large concrete panel systems (LPS). The first step was to look at U.K. multi-storey dwelling stock in general, and under the management of Birmingham City Council in particular. The information has been taken from the databases of three departments in the City of Birmingham, and rearranged in a new database using a suite of PC software called `PROXIMA' for clarity and analysis. One hundred of their stock were built large concrete panel system. Thirteen LPS blocks were chosen for the purpose of this study as case-studies depending mainly on the height and age factors of the block. A new integrated appraisal technique has been created for the LPS dwelling blocks, which takes into account the most physical and social factors affecting the condition and acceptability of these blocks. This appraisal technique is built up in a hierarchical form moving from the general approach to particular elements (a tree model). It comprises two main approaches; physical and social. In the physical approach, the building is viewed as a series of manageable elements and sub-elements to cover every single physical or environmental factor of the block, in which the condition of the block is analysed. A quality score system has been developed which depends mainly on the qualitative and quantitative conditions of each category in the appraisal tree model, and leads to physical ranking order of the study blocks. In the social appraisal approach, the residents' satisfaction and attitude toward their multi-storey dwelling block was analysed in relation to: a. biographical and housing related characteristics; and b. social, physical and environmental factors associated with this sort of dwelling, block and estate in general.The random sample consisted of 268 residents living in the 13 case study blocks. Data collected was analysed using frequency counts, percentages, means, standard deviations, Kendall's tue, r-correlation coefficients, t-test, analysis of variance (ANOVA) and multiple regression analysis. The analysis showed a marginally positive satisfaction and attitude towards living in the block. The five most significant factors associated with the residents' satisfaction and attitude in descending order were: the estate, in general; the service categories in the block, including heating system and lift services; vandalism; the neighbours; and the security system of the block. An important attribute of this method, is that it is relatively inexpensive to implement, especially when compared to alternatives adopted by some local authorities and the BRE. It is designed to save time, money and effort, to aid decision making, and to provide ranked priority to the multi-storey dwelling stock, in addition to many other advantages. A series of solution options to the problems of the block was sought for selection and testing before implementation. The traditional solutions have usually resulted in either demolition or costly physical maintenance and social improvement of the blocks. However, a new solution has now emerged, which is particularly suited to structurally sound units. The solution of `re-cycling' might incorporate the reuse of an entire block or part of it, by removing panels, slabs and so forth from the upper floors in order to reconstruct them as low-rise accommodations.

Investing in conflict zones:a firm-level analysis

The purpose of this paper is to examine, using panel data econometric techniques, the determinants of a firm’s strategy to invest in a conflict location. To the best of our knowledge this has not been done before. We use a large database of firm-level data that includes 2858 multinational firms that have a subsidiary in a developing country (during 1999-2006). Out of these firms 290 are classified as having a subsidiary in a conflict location. The choice of a conflict location is based on data from the Inter Country Risk Guide (ICRG). We start with the population of multinationals who have chosen to invest in low income countries with weak institutions. Our analysis then proceeds to explain the decision of those firms to invest in conflict locations. We have four hypotheses: (1) Firms with concentrated ownership are more likely to invest in a conflict region; (2) Firms from countries with weaker institutions are more likely to invest in conflict regions; (3) Firms and Countries with less concern over corporate social responsibility are more likely to invest in conflict countries; and (4) that there is large sector level differences in the propensity to invest in a conflict region. The results suggest that all of these hypotheses can be confirmed.

Costs and efficiency of higher education institutions in England:a DEA analysis

As student numbers in higher education in the UK have expanded during recent years, it has become increasingly important to understand its cost structure. This study applies Data Envelopment Analysis (DEA) to higher education institutions in England to assess their cost structure, efficiency and productivity. The paper complements an earlier study that used parametric methods to analyse the same panel data. Interestingly, DEA provides estimates of subject-specific unit costs that are in the same ballpark as those provided by the parametric methods. The paper then extends the previous analysis and finds that further student number increases of the order of 20–27% are feasible through exploiting operating and scale efficiency gains and also adjusting student mix. Finally the paper uses a Malmquist index approach to assess productivity change in the UK higher education. The results reveal that for a majority of institutions productivity has actually decreased during the study period.