Adjustment to Target Capital, Finance, and Growth

Does financial development result in capital being reallocated more rapidly to industries where it is most productive? We argue that if this was the case, financially developed countries should see faster growth in industries with investment opportunities due to global demand and productivity shifts. Testing this cross-industry cross-country growth implication requires proxies for (latent) global industry investment opportunities. We show that tests relying only on data from specific (benchmark) countries may yield spurious evidence for or against the hypothesis. We therefore develop an alternative approach that combines benchmark-country proxies with a proxy that does not reflect opportunities specific to a country or level of financial development. Our empirical results yield clear support for the capital reallocation hypothesis.

Late Early Triassic climate change: Insights from carbonate carbon isotopes, sedimentary evolution and ammonoid paleobiogeography

The late Early Triassic sedimentary-facies evolution and carbonate carbon-isotope marine record (delta(13)C(carb)) of ammonoid-rich, outer platform settings show striking similarities between the South ChinaBlock (SCB) and the widely distant Northern Indian Margin (NIM). The studied sections are located within the Triassic Tethys Himalayan belt (Losar section, Himachal Pradesh, India) and the Nanpanjiang Basin in the South China Block (Jinya section, Guangxi Province), respectively. Carbon isotopes from the studied sections confirm the previously observed carbon cycle perturbations at a time of major paleoceanographic changes in the wake of the end-Permian biotic crisis. This study documents the coincidence between a sharp increase in the carbon isotope composition and the worldwide ammonoid evolutionary turnover (extinction followed by a radiation) occurring around the Smithian-Spathian boundary. Based on recent modeling studies on ammonoid paleobiogeography and taxonomic diversity, we demonstrate that the late Early Triassic (Smithian and Spathian) was a time of a major climate change. More precisely, the end Smithian climate can be characterized by a warm and equable climate underlined by a flat, pole-to-equator, sea surface temperature (SST) gradient, while the steep Spathian SST gradient suggests latitudinally differentiated climatic conditions. Moreover, sedimentary evidence suggests a transition from a humid and hot climate during the Smithian to a dryer climate from the Spathian onwards. By analogy with comparable carbon isotope perturbations in the Late Devonian, Jurassic and Cretaceous we propose that high atmospheric CO(2) levels could have been responsible for the observed carbon cycle disturbance at the Smithian-Spathian boundary. We suggest that the end Smithian ammonoid extinction has been essentially caused by a warm and equable climate related to an increased CO(2) flux possibly originating from a short eruptive event of the Siberian igneous province. This increase in atmospheric CO(2) concentrations could have additionally reduced the marine calcium carbonate oversaturation and weakened the calcification potential of marine organisms, including ammonoids, in late Smithian oceans. (c) 2006 Elsevier B.V. All rights reserved.

Predicted effect of climate change on the invasibility and distribution of the Western corn root-worm

1 Insect pests, biological invasions and climate change are considered to representmajor threats to biodiversity, ecosystem functioning, agriculture and forestry.Deriving hypothesis of contemporary and/or future potential distributions of insectpests and invasive species is becoming an important tool for predicting the spatialstructure of potential threats.2 The western corn rootworm (WCR) Diabrotica virgifera virgifera LeConte is apest of maize in North America that has invaded Europe in recent years, resultingin economic costs in terms of maize yields in both continents. The present studyaimed to estimate the dynamics of potential areas of invasion by the WCR under aclimate change scenario in the Northern Hemisphere. The areas at risk under thisscenario were assessed by comparing, using complementary approaches, the spatialprojections of current and future areas of climatic favourability of the WCR. Spatialhypothesis were generated with respect to the presence records in the native rangeof the WCR and physiological thresholds from previous empirical studies.3 We used a previously developed protocol specifically designed to estimatethe climatic favourability of the WCR. We selected the most biologicallyrelevant climatic predictors and then used multidimensional envelope (MDE) andMahalanobis distances (MD) approaches to derive potential distributions for currentand future climatic conditions.4 The results obtained showed a northward advancement of the upper physiologicallimit as a result of climate change, which might increase the strength of outbreaksat higher latitudes. In addition, both MDE and MD outputs predict the stability ofclimatic favourability for the WCR in the core of the already invaded area in Europe,which suggests that this zone would continue to experience damage from this pestin Europe.

Iowa Finance Authority Agency Performance Plan, 2007

Agency Performance Plan

Iowa Department of Revenue & Finance, Agency Performance Plan, 2007

Annual Report, Agency Performance Plan

Audit report on the Iowa Water Pollution Control Works Financing Program (Clean Water Program) and the Iowa Drinking Water Facilities Financing Program (Drinking Water Program), joint programs of the Iowa Finance Authority and the Iowa Department of Natural Resources, for the year ended June 30, 2006

Audit report on the Iowa Water Pollution Control Works Financing Program (Clean Water Program) and the Iowa Drinking Water Facilities Financing Program (Drinking Water Program), joint programs of the Iowa Finance Authority and the Iowa Department of Natural Resources, for the year ended June 30, 2006

Loss of interactions with ants under cold climate in a regional myrmecophilous butterfly fauna

Aim Specialized mutualistic clades may revert and thus increase their autonomy and generalist characteristics. However, our understanding of the drivers that trigger reductions in mutualistic traits and of the consequences for the tolerance of these species to various environmental conditions remains limited. This study investigates the relationship between the environmental niche and the degree of myrmecophily (i.e. the ability to interact with ants) among members of the Lycaenidae. Location The western Swiss Alps. Methods We measured the tolerance of Lycaenidae species to low temperatures by comparing observations from a random stratified field sampling with climatic maps. We then compared the species-specific degree of myrmecophily with the species range limits at colder temperatures while controlling for phylogenetic dependence. We further evaluated whether the community-averaged degree of myrmecophily increases with temperature, as would be expected in the case of environmental filters acting on myrmecophilous species. Results Twenty-nine Lycaenidae species were found during sampling. Ancestral state reconstruction indicated that the 24 species of Polyommatinae displayed both strong myrmecophily and secondary loss of mutualism; these species were used in the subsequent statistical analyses. Species with a higher degree of ant interaction were, on average, more likely to inhabit warmer sites. Species inhabiting the coldest environments displayed little or no interaction with ants. Main conclusions Colder climates at high elevations filter out species with a high degree of myrmecophily and may have been the direct evolutionary force that promoted the loss of mutualism. A larger taxon sampling across the Holarctic may help to distinguish between the ecological and evolutionary effects of climate.

Three essays in dynamic corporate finance

Summary Throughout my thesis, I elaborate on how real and financing frictions affect corporate decision making under uncertainty, and I explore how firms time their investment and financing decisions given such frictions. While the macroeconomics literature has focused on the impact of real frictions on investment decisions assuming all equity financed firms, the financial economics literature has mainly focused on the study of financing frictions. My thesis therefore assesses the join interaction of real and financing frictions in firms' dynamic investment and financing decisions. My work provides a rationale for the documented poor empirical performance of neoclassical investment models based on the joint effect of real and financing frictions on investment. A major observation relies in how the infrequency of corporate decisions may affect standard empirical tests. My thesis suggests that the book to market sorts commonly used in the empirical asset pricing literature have economic content, as they control for the lumpiness in firms' optimal investment policies. My work also elaborates on the effects of asymmetric information and strategic interaction on firms' investment and financing decisions. I study how firms time their decision to raise public equity when outside investors lack information about their future investment prospects. I derive areal-options model that predicts either cold or hot markets for new stock issues conditional on adverse selection, and I provide a rational approach to study jointly the market timing of corporate decisions and announcement effects in stock returns. My doctoral dissertation therefore contributes to our understanding of how under real and financing frictions may bias standard empirical tests, elaborates on how adverse selection may induce hot and cold markets in new issues' markets, and suggests how the underlying economic behaviour of firms may induce alternative patterns in stock prices.

Malliavin calculus in finance

This article is an introduction to Malliavin Calculus for practitioners.We treat one specific application to the calculation of greeks in Finance.We consider also the kernel density method to compute greeks and anextension of the Vega index called the local vega index.

2007 Annual Report of the Iowa Railway Finance Authority

The Iowa Railway Finance Authority (IRFA) was created in 1980 by the 68th General Assembly to provide for the financing of rail facilities, and to enhance and continue the operation of essential rail facilities. IRFA was authorized to offer financial assistance for the acquisition, rehabilitation, construction, refinancing, extension, replacement, maintenance, repair or leasing of any rail facility. The 2005 legislative session amended Iowa Code 327H.20 by assigning all repayments of IRFA and other Iowa DOT rail assistance loans to the Rail Revolving Loan and Grant Fund. In 2006, a state appropriation of $235,000 was added to the program. In 2007, $2 million was appropriated to support rail development and job growth.

Audit report on the Iowa Water Pollution Control Works Financing Program and the Iowa Drinking Water Facilities Financing Program, joint programs of the Iowa Finance Authority and the Iowa Department of Natural Resources for the year ended June 30, 2007

Audit report on the Iowa Water Pollution Control Works Financing Program and the Iowa Drinking Water Facilities Financing Program, joint programs of the Iowa Finance Authority and the Iowa Department of Natural Resources for the year ended June 30, 2007

Corporate finance and the monetary transmission mechanism

This paper analyzes the transmission mechanisms of monetarypolicy in a general equilibrium model of securities marketsand banking with asymmetric information. Banks' optimal asset/liability policy is such that in equilibrium capital adequacy constraints are always binding. Asymmetric information about banks' net worth adds a cost to outside equity capital, which limits the extent to which banks can relax their capital constraint. In this context monetarypolicy does not affect bank lending through changes in bank liquidity. Rather, it has the effect of changing theaggregate composition of financing by firms. The model also produces multiple equilibria, one of which displays all the features of a "credit crunch". Thus, monetary policy can also have large effects when it induces a shift from one equilibrium to the other.

Finance versus costs for teaching hospitals in Spain

In this paper we analyse the observed systematic differences incosts for teaching hospitals (THhenceforth) in Spain. Concernhas been voiced regarding the existence of a bias in thefinancing of TH s has been raised once prospective budgets arein the arena for hospital finance, and claims for adjusting totake into account the legitimate extra costs of teaching onhospital expenditure are well grounded. We focus on theestimation of the impact of teaching status on average cost. Weused a version of a multiproduct hospital cost function takinginto account some relevant factors from which to derive theobserved differences. We assume that the relationship betweenthe explanatory and the dependent variables follows a flexibleform for each of the explanatory variables. We also model theunderlying covariance structure of the data. We assumed twoqualitatively different sources of variation: random effects andserial correlation. Random variation refers to both general levelvariation (through the random intercept) and the variationspecifically related to teaching status. We postulate that theimpact of the random effects is predominant over the impact ofthe serial correlation effects. The model is estimated byrestricted maximum likelihood. Our results show that costs are 9%higher (15% in the case of median costs) in teaching than innon-teaching hospitals. That is, teaching status legitimatelyexplains no more than half of the observed difference in actualcosts. The impact on costs of the teaching factor depends on thenumber of residents, with an increase of 51.11% per resident forhospitals with fewer than 204 residents (third quartile of thenumber of residents) and 41.84% for hospitals with more than 204residents. In addition, the estimated dispersion is higher amongteaching hospitals. As a result, due to the considerable observedheterogeneity, results should be interpreted with caution. From apolicy making point of view, we conclude that since a higherrelative burden for medical training is under public hospitalcommand, an explicit adjustment to the extra costs that theteaching factor imposes on hospital finance is needed, beforehospital competition for inpatient services takes place.

Expertise and finance: Mergers motivated by technological change

This paper argues that a large technological innovation may lead to a merger wave by inducing entrepreneurs to seek funds from technologically knowledgeable firms -experts. When a large technological innovation occurs, the ability of non-experts (banks) to discriminate between good and bad quality projects is reduced. Experts can continue to charge a low rate of interest for financing because their expertise enables them to identify good quality projects and to avoid unprofitable investments. On the other hand, non-experts now charge a higher rate of interest in order to screen bad projects. More entrepreneurs, therefore, disclose their projects to experts to raise funds from them. Such experts are, however, able to copy the projects and disclosure to them invites the possibility of competition. Thus the entrepreneur and the expert may merge so as to achieve product market collusion. As well as rationalizing mergers, the model can also explain various forms of venture financing by experts such as corporate investors and business angels.