Response to the Discussion of "The Effect on Financial Reporting Quality of an Exemption From the SEC Reporting Requirements for Foreign Private Issuers"

We appreciate the thorough discussion provided by Professor Yuan Ding. His comments raise legitimate issues. In this response, we offer clarifications and suggest avenues for future research. Our response follows the structure of the discussant’s paper and elaborates on each point separately.

The Effect on Financial Reporting Quality of an Exemption From the SEC Reporting Requirements for Foreign Private Issuers

We test for differences in financial reporting quality between companies that are required to file periodically with the SEC and those that are exempted from filing reports with the SEC under Rule 12g3-2(b). We examine three earnings quality measures: conservatism, abnormal accruals, and the predictability of earnings. Our results, for all three measures, show different financial reporting quality for companies that file with the SEC than for companies exempt from filing requirements. This paper provides empirical evidence of a link between filing with the SEC and financial reporting quality for foreign firms.

Social networks, mobility, and exchange systems during the Neolithic and Bronze Age of the Swiss Plateau

Excavations of Neolithic (4000 – 3500 BC) and Late Bronze Age (1200 – 800 BC) wetland sites on the northern Alpine periphery have produced astonishing and detailed information about the life and human environment of prehistoric societies. It is even possible to reconstruct settlement histories and settlement dynamics, which suggest a high degree of mobility during the Neolithic. Archaeological finds—such as pottery—show local typological developments in addition to foreign influences. Furthermore, exogenous lithic forms indicate far reaching interaction. Many hundreds of bronze artefacts are recorded from the Late Bronze Age settlements, demonstrating that some wetland sites were centres of bronzework production. Exogenous forms of bronzework are relatively rare in the wetland settlements during the Late Bronze Age. However, the products produced in the lake-settlements can be found widely across central Europe, indicating their continued involvement in interregional exchange partnerships. Potential motivations and dynamics of the relationships between sites and other regions of Europe will be detailed using case studies focussing on the settlements Seedorf Lobsigensee (BE), Concise (VD), and Sutz-Lattrigen Hauptstation innen (BE), and an initial assessment of intra-site connectivity through Network Analysis of sites within the region of Lake Neuchâtel, Lake Biel, and Lake Murten.

Automatic Stabilizer Feature of Fixed Exchange Rate Regimes in Emerging Markets

This paper shows that countries characterized by a financial accelerator mechanism may reverse the usual finding of the literature -- flexible exchange rate regimes do a worse job of insulating open economies from external shocks. I obtain this result with a calibrated small open economy model that endogenizes foreign interest rates by linking them to the banking sector's foreign currency leverage. This relationship renders exchange rate policy more important compared to the usual exogeneity assumption. I find empirical support for this prediction using the Local Projections method. Finally, 2nd order approximation to the model finds larger welfare losses under flexible regimes.

How does country risk matter for foreign direct investment?

In this paper, we aim to identify the political and financial risk components that matter most for the activities of multinational corporations. Our paper is the first paper to comprehensively examine the impact of various components of not only political risk but also financial risk on inward FDI, from both long-run and short-run perspectives. Using a sample of 93 countries (including 60 developing countries) for the period 1985-2007, we find that among the political risk components, government stability, socioeconomic conditions, investment profile, internal conflict, external conflict, corruption, religious tensions, democratic accountability, and ethnic tensions have a close association with FDI flows. In particular, socioeconomic conditions, investment profile, and external conflict appear to be the most influential components of political risk in attracting foreign investment. Among the financial risk components, only exchange rate stability yields statistically significant positive coefficients when estimated only for developing countries. In contrast, current account as a percentage of exports of goods and services, foreign debt as a percentage of GDP, net international liquidity as the number of months of import cover, and current account as a percentage of GDP yield negative coefficients in some specifications. Thus, multinationals do not seem to consider seriously the financial risk of the host country.

A new way of teaching different subjects in a foreign language in the Building Engineering Degree at the Universidad Politécnica.

The European Union has been promoting linguistic diversity for many years as one of its main educational goals. This is an element that facilitates student mobility and student exchanges between different universities and countries and enriches the education of young undergraduates. In particular, a higher degree of competence in the English language is becoming essential for engineers, architects and researchers in general, as English has become the lingua franca that opens up horizons to internationalisation and the transfer of knowledge in today’s world. Many experts point to the Integrated Approach to Contents and Foreign Languages System as being an option that has certain benefits over the traditional method of teaching a second language that is exclusively based on specific subjects. This system advocates teaching the different subjects in the syllabus in a language other than one’s mother tongue, without prioritising knowledge of the language over the subject. This was the idea that in the 2009/10 academic year gave rise to the Second Language Integration Programme (SLI Programme) at the Escuela Arquitectura Técnica in the Universidad Politécnica Madrid (EUATM-UPM), just at the beginning of the tuition of the new Building Engineering Degree, which had been adapted to the European Higher Education Area (EHEA) model. This programme is an interdisciplinary initiative for the set of subjects taught during the semester and is coordinated through the Assistant Director Office for Educational Innovation. The SLI Programme has a dual goal; to familiarise students with the specific English terminology of the subject being taught, and at the same time improve their communication skills in English. A total of thirty lecturers are taking part in the teaching of eleven first year subjects and twelve in the second year, with around 120 students who have voluntarily enrolled in a special group in each semester. During the 2010/2011 academic year the degree of acceptance and the results of the SLI Programme have been monitored. Tools have been designed to aid interdisciplinary coordination and to analyse satisfaction, such as coordination records and surveys. The results currently available refer to the first and second year and are divided into specific aspects of the different subjects involved and into general aspects of the ongoing experience.

Foreigner? Want to study in Spain? The integration process at universities

The student exchange programs being carried out at universities for over 50 years, have led to changes in the institutions, which had to adapt to accommodate these students. Despite those changes, the integration of foreign students not coming from the aforementioned exchange programs that come to our country to study at the University has been neglected. These students face many barriers (language, cultural and origin customs mainly), so a clear and detailed information would be highly desirable in order to facilitate the necessary arrangements This study aims to show the deficiencies in the integration process and hosting programs faced by a foreign student at University. The study is performed by means of an analysis of statistical data from the Polytechnic University of Madrid and the Civil Engineering School over the last 12 school years (1999 - 2000 to 2010 - 2011), as well as surveys and interviews with some of these students. The study is enhanced with the analysis of the measures and integration methods of the various minorities, which had been implemented by the foremost public universities in Spain, as well as other public and private universities abroad. It illustrates the existing backlog at the Spanish universities with regards to supporting the integration of diversity among foreign students, providing data concerning the growth of such population and its impact at the university, and on the institutions in particular. In an increasingly globalized world, we must understand and facilitate the integration of minorities at University, supplying them, from the first day, and before the enrollment process, the essential elements that will allow their adequate adaptation to the educational process at University. It concludes by identifying the main subjects that need to be tackled to endorse such integration.

Integrated approach to foreign language in the building engineering degree at the Universidad Politécnica Madrid

The European Union has been promoting linguistic diversity for many years as one of its main educational goals. This is an element that facilitates student mobility and student exchanges between different universities and countries and enriches the education of young undergraduates. In particular,a higher degree of competence in the English language is becoming essential for engineers, architects and researchers in general, as English has become the lingua franca that opens up horizons to internationalisation and the transfer of knowledge in today’s world. Many experts point to the Integrated Approach to Contents and Foreign Languages System as being an option that has certain benefits over the traditional method of teaching a second language that is exclusively based on specific subjects. This system advocates teaching the different subjects in the syllabus in a language other than one’s mother tongue, without prioritising knowledge of the language over the subject. This was the idea that in the 2009/10 academic year gave rise to the Second Language Integration Programme (SLI Programme) at the Escuela Arquitectura Tecnica in the Universidad Politecnica Madrid (EUATM-UPM), just at the beginning of the tuition of the new Building Engineering Degree, which had been adapted to the European Higher Education Area (EHEA) model. This programme is an interdisciplinary initiative for the set of subjects taught during the semester and is coordinated through the Assistant Director Office for Educational Innovation. The SLI Programme has a dual goal; to familiarise students with the specific English terminology of the subject being taught, and at the same time improve their communication skills in English. A total of thirty lecturers are taking part in the teaching of eleven first year subjects and twelve in the second year, with around 120 students who have voluntarily enrolled in a special group in each semester. During the 2010/2011 academic year the degree of acceptance and the results of the SLI Programme are being monitored. Tools have been designed to aid interdisciplinary coordination and to analyse satisfaction, such as coordination records and surveys. The results currently available refer to the first semester of the year and are divided into specific aspects of the different subjects involved and into general aspects of the ongoing experience.

Natural genetic exchange between Haemophilus and Neisseria: Intergeneric transfer of chromosomal genes between major human pathogens

Members of the bacterial families Haemophilus and Neisseria, important human pathogens that commonly colonize the nasopharynx, are naturally competent for DNA uptake from their environment. In each genus this process is discriminant in favor of its own and against foreign DNA through sequence specificity of DNA receptors. The Haemophilus DNA uptake apparatus binds a 29-bp oligonucleotide domain containing a highly conserved 9-bp core sequence, whereas the neisserial apparatus binds a 10-bp motif. Each motif (“uptake sequence”, US) is highly over-represented in the chromosome of the corresponding genus, particularly concentrated with core sequences in inverted pairs forming gene terminators. Two Haemophilus core USs were unexpectedly found forming the terminator of sodC in Neisseria meningitidis (meningococcus), and sequence analysis strongly suggests that this virulence gene, located next to IS1106, arose through horizontal transfer from Haemophilus. By using USs as search strings in a computer-based analysis of genome sequence, it was established that while USs of the “wrong” genus do not occur commonly in Neisseria or Haemophilus, where they do they are highly likely to flag domains of chromosomal DNA that have been transferred from Haemophilus. Three independent domains of Haemophilus-like DNA were found in the meningococcal chromosome, associated respectively with the virulence gene sodC, the bio gene cluster, and an unidentified orf. This report identifies intergenerically transferred DNA and its source in bacteria, and further identifies transformation with heterologous chromosomal DNA as a way of establishing potentially important chromosomal mosaicism in these pathogenic bacteria.

An Escherichia coli strain with all chromosomal rRNA operons inactivated: Complete exchange of rRNA genes between bacteria

Current global phylogenies are built predominantly on rRNA sequences. However, an experimental system for studying the evolution of rRNA is not readily available, mainly because the rRNA genes are highly repeated in most experimental organisms. We have constructed an Escherichia coli strain in which all seven chromosomal rRNA operons are inactivated by deletions spanning the 16S and 23S coding regions. A single E. coli rRNA operon carried by a multicopy plasmid supplies 16S and 23S rRNA to the cell. By using this strain we have succeeded in creating microorganisms that contain only a foreign rRNA operon derived from either Salmonella typhimurium or Proteus vulgaris, microorganisms that have diverged from E. coli about 120–350 million years ago. We also were able to replace the E. coli rRNA operon with an E. coli/yeast hybrid one in which the GTPase center of E. coli 23S rRNA had been substituted by the corresponding domain from Saccharomyces cerevisiae. These results suggest that, contrary to common belief, coevolution of rRNA with many other components in the translational machinery may not completely preclude the horizontal transfer of rRNA genes.

Student mathematical notebook of Ebenezer Hill, 1785

This mathematical notebook of Ebenezer Hill was kept in 1795 while he was a student at Harvard College. The volume contains rules, definitions, problems, drawings, and tables on arithmetic, geometry, trigonometry, surveying, calculating distances, and dialing. Some of the exercises are illustrated by hand-drawn diagrams, including some of buildings and trees.

Non omnia possumus omnes: [student theme], 1795 December 28

A somewhat playful manuscript poem describing a weary student, Tom Delve, who throws off his "tiresome books" to "exchange my hopes of fame for ease" because the world of art, unlike science, is too broad to ever master.

Natural resources on the Russian continental shelf: Foreign investors sought... on Russian terms. OSW Commentary No. 76, 2012-05-09

In recent weeks, Rosneft, a Russian state-owned oil company, has signed co-operation agreements with three Western corporations: America’s ExxonMobil, Italy’s Eni, and Norway’s Statoil. In exchange for access to Russian oil fields on the continental shelf as minority shareholders, these Western investors will finance and carry out exploration there. They will also offer to Rosnieft technology transfer, staff exchange and the purchase of shares in their assets outside Russia (for example in the North Sea or in South America). Rosneft’s deals with Western energy companies prove that the Russian government is resuming the policy of a controlled opening-up of the Russian energy sectors to foreign investors which it initiated in 2006. So far, investors have been given access to the Russian electric energy sector and some onshore gas fields. The agreements which have been signed so far also allow them to work on the Russian continental shelf. This process is being closely supervised by the Russian government, which has enabled the Kremlin to maintain full control of this sector. The primary goal of this policy is to attract modern technologies and capital to Russia and to gain access to foreign assets since this will help Russian corporations to reinforce their positions in international markets. The signing of the above agreements does not guarantee that production will commence. These are a high-risk projects. It remains uncertain whether crude can be extracted from those fields and whether its development will be cost-effective. According to estimates, the Russian Arctic shelf holds approximately 113 billion tonnes of hydrocarbons. The development of these fields, including building any necessary infrastructure, may consume over US$500 billion within 30 years. Furthermore, the legal regulations currently in force in Russia do not guarantee that foreign investors will have a share in the output from these fields. Without foreign support, Russian companies are unlikely to cope with such technologically complicated and extremely expensive investments. In the most optimistic scenario, the oil production in the Russian Arctic may commence in fifteen to twenty years at the earliest.

A Contribution to The Study of Global Competition for Talent: the determinants of student mobility and its consequences for the internationalization of the labor market. Bruges European Economic Policy (BEEP) Briefing 27/2013

In a globalized economy the skills of the workforce are a key determinant of the competitiveness of a country. One of the goals of Higher Education is precisely to develop the students’ skills in order to allow them to match the increasing demand for highly qualified workers while it is simultaneously the best period of life to acquire multicultural skills. For this reason, the European Union has fostered student mobility through several programs: the Erasmus program and the Bologna process are the best known among them. Although student mobility is a growing phenomenon, publications and research on the subject remain relatively scarce. This paper aims to contribute to that literature through an empirical analysis which exploits a questionnaire submitted to university alumni and focuses on two research questions: what drives studies abroad and what drives expatriation of graduates. Our empirical analysis first shows that exposure to international experiences before entering tertiary education and family background are the main factors influencing student mobility. A second conclusion is that studying abroad increases the international mobility on the labor market. Both confirm previous studies. Moreover, by making a distinction between participating in the Erasmus program and in other exchange programs or internships abroad, we found that the Erasmus program and the other programs or internships have an equivalent influence on the international mobility on the labor market: they increase by 9 to 12.5 percentage points a student’s chance to be mobile on the international labor market. This result shows the legitimacy of the Erasmus program, but it also reveals the important impact of other forms of experience abroad. It provides support for policy makers to encourage mobility programs, in order to foster integration of the European labor market.

Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices

In this paper, we estimate ERPT into imported input prices and export prices using disaggregated quarterly trade data for Switzerland over 2004–2011. We find evidence for high pass-through rates into imported input prices. This demonstrates the effectiveness of natural hedging. On the export side, ERPT exhibits substantial sectoral heterogeneity and changes in imported input costs are not transmitted to foreign consumers in most cases. This suggests the use of cheaper imported inputs to offset adverse effects of currency appreciation on export profit margins.