Capital Accumulation in the Presence of Informal Credit Contracts: Does the Incentive Mechanism Work Better than Credit Rationing Under Asymmetric Information?

Credit markets with asymmetric information often prefer credit rationing as a profit maximizing device. This paper asks whether the presence of informal credit markets reduces the cost of credit rationing, that is, whether it can alleviate the impact of asymmetric information based on the available information. We used a dynamic general equilibrium model with heterogenous agents to assess this. Using Indian credit market data our study shows that the presence of informal credit market can reduce the cost of credit rationing by separating high risk firms from the low risk firms in the informal market. But even after this improvement, the steady state capital accumulation is still much lower as compared to incentive based market clearing rates. Through self revelation of each firm's type, based on the incentive mechanism, banks can diversify their risk by achieving a separating equilibrium in the loan market. The incentive mechanism helps banks to increase capital accumulation in the long run by charging lower rates and lending relatively higher amount to the less risky firms. Another important finding of this study is that self-revelation leads to very significant welfare improvement, as measured by consumptiuon equivalence.

Scaling the Costs of 404 Testing to Fit the Needs of Small Public Companies

In July of 2002, the Sarbanes-Oxley Act was passed by Congress, including section 404 which requires the auditors to test and opine on the company's internal controls. Since that time there has been much debate about whether the intended benefits of increased investor confidence and financial statement transparency trump the unexpectedly high compliance costs, especially for public companies with market-caps less than $75 million. Before these companies begin complying in the upcoming year, interest groups are calling for the requirements to be 'scaled' to better fit the needs of these companies. While auditors already are expected to scale their audit approach to each individual client, more must be done to significantly decrease the costs in order to reverse the trend of small companies foregoing listing on U.S. capital markets. Increased guidance from the PCAOB, SEC, and other related parties could help the small-cap companies and their auditors be aware of best practices. Also, exempting industries that already follow similar guidelines or are significantly injured by the compliance requirements could help. Lastly, the controversial proposal of rotational audits could be put in place if the affected parties cooperate to remove the undue burden on these small-cap companies. Without some form of significant action, the investors could soon lose the ability to buy small-cap companies in U.S. markets.

Transaction Costs, Production Costs, and the Passage of Time

No abstract available.

Recent distribution and accumulation of organic carbon on the continental margin west off Spitsbergen

The study compiles the controlling factors for organic matter sedimentation patterns from a suite of organogeochemical parameters in surface sediments off Spitsbergen and direct seabed observations using a Remotely Operated Vehicle (ROV). In addition we assess its storage rates as well as the potential of carbon sinks on the northwestern margin of the Barents Sea with short sediment cores from a selected fjord environment (Storfjord). While sedimentation in the fjords is mainly controlled by river/meltwater discharge and coastal erosion by sea ice/glaciers resulting in high supply of terrigenous organic matter, Atlantic water inflow, and thus enhanced marine organic matter supply, characterizes the environment on the outer shelf and slope. Local deviations from this pattern, particularly on the shelf, are due to erosion and out washing of fine-grained material by bottom currents. Spots dominated by marine productivity close to the island have been found at the outer Isfjord and west off Prins Karls Forland as well as off the Kongsfjord/Krossfjord area and probably reflect local upwelling of nutrient-rich Atlantic water-derived water masses. Accumulation rates of marine organic carbon as well as reconstructed primary productivities decreased since the middle of the last century. Negative correlation of the Isfjord temperature record with reconstructed productivities in the Storfjord could be explained by a reduced annual duration of the marginal ice zone in the area due to global warming. Extremely high accumulation rates of marine organic carbon between 5.4 and 17.2 g/m**2/yr mark the Storfjord area, and probably high-latitude fjord environments in general, as a sink for carbon dioxide.

Sediment properties, contents and accumulation rates of Hg in cores of Upper Quaternary sediments from the Deryugin Basin, Okhotsk Sea

The Hg distribution and some mineralogical-geochemical features of bottom sediments up to a depth of 10 m in the Deryugin Basin showed that the high and anomalous Hg contents in the Holocene deposits are confined to a spreading riftogenic structure and separate fluid vents within it. The accumulations of Hg in the the sediments were caused by its fluxes from gas and low-temperature hydrothermal vents under favorable oceanological conditions in the Holocene. The two mainly responsible for the high and anomalous Hg contents are infiltration (fluxes of hydrothermal or gas fluids from the sedimentary cover) and plume (Hg precipitation from water plumes with certain hydrochemical conditions forming above endogenous sources). The infiltration anomalies of Hg were revealed in the following environments: (1) near gas vents on the northeastern Sakhalin slope, where high Hg contents are associated only with Se and were caused by the accumulation of gases ascending from beneath the gas hydrate layer; (2) in the area of inferred occasionally operating low-temperature hydrothermal seeps in the central part of the Deryugin Basin, in which massive barite chimneys, hydrothermal Fe-Mn crusts, and anomalous contents of Mn, Ba, Zn, and Ni in sediments develop.

Chemistry and accumulation rates of Jurassic to early Cretaceous sediments from the central equatorial Pacific

Sedimentation in the central Pacific during the Jurassic and Early Cretaceous was dominated by abundant biogenic silica. A synthesis of the stratigraphy, lithology, petrology, and geochemistry of the radiolarites in Sites 801 and 800 documents the sedimentation processes and trends in the equatorial central Pacific from the Middle Jurassic through the Early Cretaceous. Paleolatitude and paleodepth reconstructions enable comparisons with previous DSDP sites and identification of the general patterns of sedimentation over a wide region of the Pacific. Clayey radiolarites dominated sedimentation on Pacific oceanic crust within tropical paleolatitudes from at least the latest Bathonian through Tithonian. Radiolarian productivity rose to a peak within 5° of the paleoequator, where accumulation rates of biogenic silica exceeded 1000 g/cm**2/m.y. Wavy-bedded radiolarian cherts developed in the upper Tithonian at Site 801 coinciding with the proximity of this site to the paleoequator. Ribbon-bedding of some radiolarian cherts exposed on Pacific margins may have formed from silicification of radiolarite deposited near the equatorial high-productivity zone where radiolarian/clay ratios were high. Silicification processes in sediments extensively mixed by bioturbation or enriched in clay or carbonate generally resulted in discontinuous bands or nodules of porcellanite or chert, e.g., a "knobby" radiolarite. Ribbon-bedded cherts require primary alternations of radiolarian-rich and clay-rich layers as an initial structural template, coupled with abundant biogenic silica in both layers. During diagenesis, migration of silica from clay-rich layers leaves radiolarian "ghosts" or voids, and the precipitation in adjacent radiolarite layers results in silicification of the inter-radiolarian matrix and infilling of radiolarian tests. Alternations of claystone and clay-rich radiolarian grainstone were deposited during the Callovian at Site 801 and during the Berriasian-Valanginian at Site 800, but did not silicify to form bedded chert. Carbonate was not preserved on the Pacific oceanic floor or spreading ridges during the Jurassic, perhaps due to an elevated level of dissolved carbon dioxide. During the Berriasian through Hauterivian, the carbonate compensation depth (CCD) descended to approximately 3500 m, permitting the accumulation of siliceous limestones at near-ridge sites. Carbonate accumulation rates exceeded 1500 g/cm**2/m.y. at sites above the CCD, yet there is no evidence of an equatorial carbonate bulge during the Early Cretaceous. In the Barremian and Aptian, the CCD rose, coincident with the onset of mid-plate volcanic activity. Abundance of Fe and Mn and the associated formation of authigenic Fe-smectite clays was a function of proximity to the spreading ridges, with secondary enrichments occurring during episodes of spreading-center reorganizations. Callovian radiolarite at Site 801 is anomalously depleted in Mn, which resulted either from inhibited precipitation of Mn-oxides by lower pH of interstitial waters induced by high dissolved oceanic CO2 levels or from diagenetic mobilization of Mn. Influx of terrigenous (eolian) clay apparently changed with paleolatitude and geological age. Cyclic variations in productivity of radiolarians and of nannofossils and in the influx of terrigenous clay are attributed to Milankovitch climatic cycles of precession (20,000 yr) and eccentricity (100,000 yr). Diagenetic redistribution of biogenic silica and carbonate enhanced the expression of this cyclic sedimentation. Jurassic and Lower Cretaceous sediments were deposited under oxygenated bottom-water conditions at all depths, accompanied by bioturbation and pervasive oxidation of organic carbon and metals. Despite the more "equable" climate conditions of the Mesozoic, the super-ocean of the Pacific experienced adequate deep-water circulation to prevent stagnation. Efficient nutrient recycling may have been a factor in the abundance of radiolarians in this ocean basin.

Manganese contents and accumulation rates in reduced bottom sediments of the Sea of Okhotsk

Manganese contents in reduced sediments and accumulation rates were investigated. Their values in sediments of most of cores are background (0.03-0.07 %).Anomalous concentrations (up to 2.5 %) and accumulation rates (up to 60 mg/cm**2/ka) occur near the known region of hydrothermal barite mineralization in the Derugin Basin. High accumulation rates of Mn (>10 mg/cm**2/ka) also occur in Holocene sediments to south-east from the Derugin Basin. It can be assumed that high Mn contents and accumulation rates occur there due to transportation of Mn-rich water from the Derugin Basin in the near-bottom layer under the lower border of the Sea of Okhotsk Intermediate Water. Intensive Mn accumulation is also typical for the South Okhotsk Basin near the Bussol Strait. Mn accumulation rates of glacial sediments of the second oxygen isotope stage are less significant, which is presumed to be caused by paleoceanological reasons.

Physical properties, mineral and chemical compositions, and accumulation rates of Holocene and Upper Pleistocene bottom sediments from the Sea of Okhotsk

Mineral and chemical compositions and physical properties of diatomaceous clayey-siliceous sediments from the Sea of Okhotsk are studied. Accumulation rates of silica are determined. Their compositional model based on silica content is similar to that of Late Jurassic and Olenekian-Middle Anisian cherts from the Sikhote Alin region. Thickness of Holocene siliceous unit and accumulation rates of siliceous deposits depended on bioproductivity in the upper water layer and seafloor topography. Accumulation rates of amorphous SiO2 (0.05-5.7 g/cm**2/ka) and free SiO2 (0.5-11.6 g/cm**2/ka) are minimal on seamounts and maximal in depressions near foothills. These values match accumulation rates of free SiO2 in Triassic and Late Jurassic basins of the Sikhote Alin region (0.33-3 g/cm**2/ka). Comparison of composition and accumulation rates of silica shows that Triassic and Late Jurassic siliceous sequences of Sikhote Alin could accumulate in a marginal marine basin near a continent.

Radioisotopes and He accumulation in deep sea sediments of the Ontong Java Plateau

The accumulation of extraterrestrial 3He, a tracer for interplanetary dust particles (IDPs), in sediments from the Ontong Java Plateau (OJP; western equatorial Pacific Ocean) has been shown previously to exhibit a regular cyclicity during the late Pleistocene, with a period of ~100 ka. Those results have been interpreted to reflect periodic variability in the global accretion of IDPs that, in turn, has been linked to changes in the inclination of Earth's orbit with respect to the invariable plane of the solar system. Here we show that the accumulation in OJP sediments of authigenic 230Th, produced by radioactive decay of 234U in seawater, exhibits a 100-ka cyclicity similar in phase and amplitude to that evident in the 3He record. We interpret the similar patterns of 230Th and 3He accumulation to reflect a common origin within the ocean-climate system. Comparing spatial and temporal patterns of sediment accumulation against regional patterns of biological productivity and against the well-established pattern of CaCO3 dissolution in the deep Pacific Ocean leads to the further conclusion that a common 100-ka cycle in accumulation of biogenic, authigenic and extraterrestrial constituents in OJP sediments reflects the influence of climate-related changes in sediment focusing, rather than changes in the rate of production or supply of sedimentary constituents.

A probabilistic model estimating oil spill clean-up costs - a case study for the Gulf of Finland

Existing models estimating oil spill costs at sea are based on data from the past, and they usually lack a systematic approach. This make them passive, and limits their ability to forecast the effect of the changes in the oil combating fleet or location of a spill on the oil spill costs. In this paper we make an attempt towards the development of a probabilistic and systematic model estimating the costs of clean-up operations for the Gulf of Finland. For this purpose we utilize expert knowledge along with the available data and information from literature. Then, the obtained information is combined into a framework with the use of a Bayesian Belief Networks. Due to lack of data, we validate the model by comparing its results with existing models, with which we found good agreement. We anticipate that the presented model can contribute to the cost-effective oil-combating fleet optimization for the Gulf of Finland. It can also facilitate the accident consequences estimation in the framework of formal safety assessment (FSA).

Radionuclides and accumulation rates of sediments from the equatorial Atlantic

Variations in carbonate flux and dissolution, which occurred in the equatorial Atlantic during the last 24,000 years, have been estimated by a new approach that allows the point-by-point determination of paleofluxes to the seafloor. An unprecedented time resolution can thus be obtained which allows sequencing of the relatively rapid events occurring during deglaciation. The method is based on observations that the flux of unsupported 230Th into deep-sea sediments is nearly independent of the total mass flux and is close to the production rate. Thus excess 230Th activity in sediments can be used as a reference against which fluxes of other sedimentary components can be estimated. The study was conducted at two sites (Ceará Rise; western equatorial Atlantic, and Sierra Leone Rise; eastern equatorial Atlantic) in cores raised from three different depths at each site. From measurements of 230Th and CaCO3, changes in carbonate flux with time and depth were obtained. A rapid increase in carbonate production, starting at the onset of deglaciation, was found in both areas. This event may have important implications for the postglacial increase in atmospheric CO2 by increasing the global carbonate carbon to organic carbon rain ratio and decreasing the alkalinity of surface waters (and possibly the North Atlantic Deep Water). Increased carbonate dissolution occurred in the two regions during deglaciation, followed by a minimum during mid-Holocene and renewed intensification of dissolution in late Holocene. During the last 16,000 years, carbonate dissolution was consistently more pronounced in the western than in the eastern basin, reflecting the influence of Antarctic Bottom Water in the west. This trend was reversed during stage 2, possibly due to the accumulation of metabolic CO2 below the level of the Romanche Fracture Zone in the eastern basin.

Accumulation of glucose and protein hydrolysate by natural populations of microorganisms in the Black Sea and Atlantic Ocean

Accumulation rate of dissolved organic matter (DOM) by natural populations varies over a wide range. In the surface layer of the Black Sea accumulation rate of glucose is 0.6-4.82 mg C/m**3 per day, and in the Atlantic Ocean 1.15-12.38 mg C/m**3 per day. This rate is 2-17 times higher when hydrolysate is added to the medium. Accumulation rate of glucose and hydrolysate in the aphotic layer of the Black Sea and the Atlantic Ocean is 1.5-6 times lower than at the surface. The organotrophic coefficient also varied within wide range. Relative amount of DOM used by microorganisms for growth in total production is much less (0.6-39.9%) in areas of intensive photosynthesis than in waters poor in DOM (83.7-99.2%).

Accumulation and composition of terrigenous material on Ceara rise over the past 55 Ma

Ceara Rise, located east the Amazon River mouth, is covered with a thick blanket of pelagic carbonate and hemipelagic terrigenous sediment. The terrigenous component has been extracted from 57 bulk sediment samples at Ocean Drilling Program (ODP) Sites 925 and 929 on Ceara Rise to obtain a Cenozoic record of riverine discharge from northern South America. From the early Eocene to early Miocene (55-20 Ma), terrigenous accumulation was dominated by moderate amounts of generally large-grained, gray to green sediment especially depleted in elements that are enriched in post-Archaean shale (e.g. Cs, Th, Yb). However, pulsed inputs of relatively small-grained, gray to green terrigenous sediment less depleted in the above elements occurred in the late Eocene and Oligocene. The accumulation of terrigenous sediment decreased significantly until 16.5 Ma. In the middle Miocene (16.5-13 Ma), terrigenous accumulation was dominated by small amounts of small-grained, tan sediment notably depleted in Na and heavy rare earth elements. The accumulation rate of terrigenous sediment increased markedly from the latest Miocene (10 Ma) to the present day, a change characterized by deposition of gray-green sediment enriched in elements that are enriched in post-Archaean shale. Observed changes in terrigenous sediment at Ceara Rise record tectonism and erosion in northern South America. The Brazil and Guyana shields supplied sediment to the eastern South American margin until the middle Miocene (20-16.5 Ma) when a period of thrusting, shortening and uplift changed the source region, probably first to highly weathered and proximal Phanerozoic sediments. By the late Miocene (9 Ma), there was a transcontinental connection between the Andes and eastern South America. Weathering products derived from the Andes have increasingly dominated terrigenous deposition at Ceara Rise since the Late Miocene and especially since the late Pliocene.