Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

A comparison of stock market mechanisms

This paper studies the relationship between the amount of publicinformation that stock market prices incorporate and the equilibriumbehavior of market participants. The analysis is framed in a static, NREEsetup where traders exchange vectors of assets accessing multidimensionalinformation under two alternative market structures. In the first(the unrestricted system), both informed and uninformed speculators cancondition their demands for each traded asset on all equilibrium prices;in the second (the restricted system), they are restricted to conditiontheir demand on the price of the asset they want to trade. I show thatinformed traders incentives to exploit multidimensional privateinformation depend on the number of prices they can condition upon whensubmitting their demand schedules, and on the specific price formationprocess one considers. Building on this insight, I then give conditionsunder which the restricted system is more efficient than the unrestrictedsystem.

With a bang, not a whimper: Pricking Germany's "stock market bubble" in 1927 and the slide into depression

In May 1927, the German central bank intervenedindirectly to reduce lending to equity investors.The crash that followed ended the only stockmarket boom during Germany s relative stabilization 1924-28. This paper examines thefactors that lead to the intervention as well asits consequences. We argue that genuine concernabout the exuberant level of the stock market,in addition to worries about an inflow offoreign funds, tipped the scales in favour ofintervention. The evidence strongly suggeststhat the German central bank under HjalmarSchacht was wrong to be concerned aboutstockprices-there was no bubble. Also, theReichsbank was mistaken in its belief thata fall in the market would reduce theimportance of short-term foreign borrowing,and help to ease conditions in the money market.The misguided intervention had important realeffects. Investment suffered, helping to tipGermany into depression.

Stock returns, term structure, inflation and real activity: An international perspective

This paper analyses the empirical interdependences among assetreturns, real activity and inflation from a multicountry and internationalpoint of view. We find that nominal stock returns are significantly relatedto inflation only in the US, that the US term structure of interest ratespredicts both domestic and foreign inflation rates while foreign termstructures do not have this predictive power and that innovations in inflationand exchange rates induce insignificant responses of real and financialvariables. An interpretation of the dynamics and some policy implicationsof the results are provided.

Productivity growth and the exchange rate regime: The role of financial development

This paper offers empirical evidence that a country's choice of exchange rate regime can have a signifficant impact on its medium-term rate of productivity growth. Moreover, the impact depends critically on the country's level of financial development, its degree of market regulation, and its distance from the global technology frontier. We illustrate how each of these channels may operate in a simple stylized growth model in which real exchange rate uncertainty exacerbates the negative investment e¤ects of domestic credit market constraints. The empirical analysis is based on an 83 country data set spanning the years 1960-2000. Our approach delivers results that are in striking contrast to the vast existing empirical exchange rate literature, which largely finds the effects of exchange rate volatility on real activity to be relatively small and insignificant.

Differential regulation of RasGAPs in cancer

Ever since their discovery as cellular counterparts of viral oncogenes more than 25 years ago, much progress has been made in understanding the complex networks of signal transduction pathways activated by oncogenic Ras mutations in human cancers. The activity of Ras is regulated by nucleotide exchange factors (GEFs) and GTPase activating proteins (GAPs), and much emphasis has been put into the biochemical and structural analysis of the Ras/GAP complex. The mechanisms by which GAPs catalyze Ras-GTP hydrolysis have been clarified and revealed that oncogenic Ras mutations confer resistance to GAPs and remain constitutively active. However, it is yet unclear how cells coordinate the large and divergent GAP protein family to promote Ras inactivation and ensure a certain biological response. Different domain arrangements in GAPs to create differential protein-protein and protein-lipid interactions are probably key factors determining the inactivation of the 3 Ras isoforms H-, K-, and N-Ras and their effector pathways. In recent years, in vitro as well as cell- and animal-based studies examining GAP activity, localization, interaction partners, and expression profiles have provided further insights into Ras inactivation and revealed characteristics of several GAPs to exert specific and distinct functions. This review aims to summarize knowledge on the cell biology of RasGAP proteins that potentially contributes to differential regulation of spatiotemporal Ras signaling.

Genetic exchange in an arbuscular mycorrhizal fungus results in increased rice growth and altered mycorrhiza-specific gene transcription.

Arbuscular mycorrhizal fungi (AMF) are obligate symbionts with most terrestrial plants. They improve plant nutrition, particularly phosphate acquisition, and thus are able to improve plant growth. In exchange, the fungi obtain photosynthetically fixed carbon. AMF are coenocytic, meaning that many nuclei coexist in a common cytoplasm. Genetic exchange recently has been demonstrated in the AMF Glomus intraradices, allowing nuclei of different Glomus intraradices strains to mix. Such genetic exchange was shown previously to have negative effects on plant growth and to alter fungal colonization. However, no attempt was made to detect whether genetic exchange in AMF can alter plant gene expression and if this effect was time dependent. Here, we show that genetic exchange in AMF also can be beneficial for rice growth, and that symbiosis-specific gene transcription is altered by genetic exchange. Moreover, our results show that genetic exchange can change the dynamics of the colonization of the fungus in the plant. Our results demonstrate that the simple manipulation of the genetics of AMF can have important consequences for their symbiotic effects on plants such as rice, which is considered the most important crop in the world. Exploiting natural AMF genetic variation by generating novel AMF genotypes through genetic exchange is a potentially useful tool in the development of AMF inocula that are more beneficial for crop growth.

Regulation of frizzled receptor activity at the plasma membrane : an interplay of the receptor, the trimeric G protein Go, and RGS protein and a scaffolding protein Kermit

G-protein-signaling pathways convey extracellular signals inside the cells and regulate distinct physiological responses. This type of signaling pathways consists of three major components: G-protein-coupled receptors (GPCRs), heterotrimeric G proteins (G-proteins) and downstream effectors. Upon ligand binding, GPCRs activate heterotrimeric G proteins to initiate the signaling cascade. Dysfunction of GPCR signaling correlates with numerous diseases such as diabetes, nervous and immune system deficiency, and cancer. As the signaling switcher, G-proteins (Gs, Gq/11, G12/13, and Gi/o) have been an appealing topic of research for decades. A heterotrimeric G-protein is composed of three subunits, the guanine nucleotide associated a-subunit, ß and y subunits. In general, the duration of signaling is determined by the lifetime of activated (GTP bound) Ga subunits. Identification of novel communication partners of Ga subunits appears to be an attractive way to understand the machinery of GPCR signaling. In our lab, we mainly focus on Gao, which is abundantly expressed in the nervous system. Here we present two novel interacting partners of Drosophila Gao: Dhit and Kermit, identified through yeast two-hybrid screening and genetic screening respectively. Dhit is characterized by a small size with a conserved RGS domain and an N-terminal cysteine rich motif. The RGS domain possesses the GAP (GTPase activating protein) activity towards G proteins. However, we found that Dhit exerts not only the GAP activity but also the GDI (guanine nucleotide dissociation inhibitor) activity towards Gao. The unexpected GDI activity is preserved in GAIP/RGS19 - a mammalian homologue of Dhit. Further experiments confirmed the GDI activity of Dhit and GAIP/RGS19 in Drosophila and mammalian cell models. Therefore, we propose that Dhit and its mammalian homologues modulate GPCR signaling by a double suppression of Ga subunits - suppression of their nucleotide exchange with GTP and acceleration of their hydrolysis of GTP. Kermit/GEPC was first identified as a binding partner of GAIP/RGS19 in a yeast two- hybrid screen. Instead of interacting with the Drosophila homologue of GAIP/RGS19 (Dhit), Kermit binds to Gao in vivo and in vitro. The functional consequence of Kermit/Gao interaction is the regulation of localization of Vang (one of the planar cell polarity core components) at the apical membrane. Overall, my work elaborated the action of Gao with its two interaction partners in Gao- mediated signaling pathway. Conceivably, the understanding of GPCR signaling including Gao and its regulators or effectors will ultimately shed light on future pharmaceutical research. - Les voies de signalisation médiées par les protéines G transmettent des signaux extracellulaires à l'intérieur des cellules pour réguler des réponses physiologiques distinctes. Cette voie de signalisation consiste en trois composants majeurs : les récepteurs couplés aux protéines G (GPCRs), les protéines G hétérotrimériques (G-proteins) et les effecteurs en aval. Suite à la liaison du ligand, les GPCRs activent les protéines G hétérotrimériques qui initient la cascade de signalisation. Des dysfonctions dans la signalisation médiée par les GPCRs sont corrélées avec de nombreuses maladies comme le diabète, des déficiences immunes et nerveuses, ainsi que le cancer. Puisque la voie de signalisation s'active et se désactive, les protéines G (Gs, Gq/11, G12/13 et Gi/o) ont été un sujet de recherche attrayant pendant des décennies. Une protéine G hétérotrimérique est composée de trois sous-unités, la sous-unité a associée au nucléotide guanine, ainsi que les sous-unités ß et y. En général, la durée du signal est déterminée par le temps de demi-vie des sous-unités Ga activées (Ga liées au GTP). Identifier de nouveaux partenaires de communication des sous-unités Ga se révèle être un moyen attractif de comprendre la machinerie de la signalisation par les GPCRs. Dans notre laboratoire nous nous sommes concentrés principalement sur Gao qui est exprimée de manière abondante dans le système nerveux. Nous présentons ici deux nouveaux partenaires qui interagissent avec Gao chez la drosophile: Dhit et Kermit, qui ont été identifiés respectivement par la méthode du yeast two-hybrid et par criblage génétique. Dhit est caractérisé par une petite taille, avec un domaine RGS conservé et un motif N- terminal riche en cystéines. Le domaine RGS contient une activité GAP (GTPase activating protein) pour les protéines G. Toutefois, nous avons découvert que Dhit exerce non seulement une activité GAP mais aussi une activité GDI (guanine nucleotide dissociation inhibitor) à l'égard de Gao. Cette activité GDI inattendue est préservée dans RGS19 - un homologue de Dhit chez les mammifères. Des expériences supplémentaires ont confirmé l'activité GDI de Dhit et de RGS19 chez Drosophila melanogaster et les modèles cellulaires mammifères. Par conséquent, nous proposons que Dhit et ses homologues mammifères modulent la signalisation GPCR par une double suppression des sous-unités Ga - suppression de leur nucléotide d'échange avec le GTP et une accélération dans leur hydrolyse du GTP. Kermit/GIPC a été premièrement identifié comme un partenaire de liaison de RGS19 dans le criblage par yeast two-hybrid. Au lieu d'interagir avec l'homologue chez la drosophile de RGS19 (Dhit), Kermit se lie à Gao in vivo et in vitro. La conséquence fonctionnelle de l'interaction Kermit/Gao est la régulation de la localisation de Vang, un des composants essentiel de la polarité planaire cellulaire, à la membrane apicale. Globalement, mon travail a démontré l'action de Gao avec ses deux partenaires d'interaction dans la voie de signalisation médiée par Gao. La compréhension de la signalisation par les GPCRs incluant Gao et ses régulateurs ou effecteurs aboutira à mettre en lumière de futurs axes dans la recherche pharmacologique.

Regulation of the AKAP-LBC signaling complex : molecular characterization and functional implications

RÉSUMÉ Les protéines d'ancrage de la protéine kinase A (AKAPs) constituent une grande famille de protéines qui ciblent la protéine kinase A (PKA) à proximité de ses substrats physiologiques pour assurer leur régulation. Une nouvelle protéine de cette famille, appelée AKAP-Lbc, a été récemment caractérisée et fonctionne comme un facteur d'échange de nucléotides guanine (GEF) pour la petite GTPase Rho. AKAP-Lbc est régulée par différents signaux qui activent et désactivent son activité Rho-GEF. Son activation est assurée par la sous-unité alpha de la protéine G hétérotrimérique G12, tandis que son inhibition dépend de son interaction avec la PKA et 14-3-3. AKAP-Lbc est principalement exprimée dans le coeur et pourrait réguler des processus importants tels que l'hypertrophie et la différenciation des cardiomyocytes. Ainsi, il est crucial d'élucider les mécanismes moléculaires impliqués dans la régulation de son activité Rho-GEF. Le but général de ce travail de thèse est la caractérisation de deux nouveaux mécanismes impliqués dans la régulation de l'activité de AKAP-Lbc. Le premier mécanisme consiste en la régulation de l'activité de AKAP-Lbc par son homo-oligomérisation. Mes travaux montrent que l'homo-oligomérisation maintient AKAP-Lbc inactive, dans une conformation permettant à la PKA ancrée et à 14-3-3 d'exercer leur effet inhibiteur sur l'activité de AKAP-Lbc. Le second mécanisme concerne la régulation de l'activité de AKAP-Lbc via une nouvelle interaction entre AKAP-Lbc et la protéine LC3. LC3 joue un rôle crucial dans l'autophagie, un processus cellulaire qui adresse les protéines cytoplasmiques au lysosome pour leur dégradation. Ce mécanisme est particulièrement important pour le survie des cardiomyocytes durant les périodes d'absence de nutriments. Mes travaux mettent en évidence que LC3 inhibe l'activité Rho-GEF de AKAP-Lbc, ce qui suggère que, au-delà son rôle bien établi dans l'autophagie, LC3 participerait à la régulation de la signalisation de Rho. Prises ensembles, ces études contribuent à comprendre comment le complexe de signalisation formé par AKAP-Lbc régule la signalisation de Rho dans les cellules. Au-delà de leur intérêt au niveau biochimique, ces travaux pourraient aussi contribuer à élucider les réseaux de signalisation qui régulent des phénomènes physiologiques dans le coeur. ABSTRACT A-kinase anchoring proteins (AKAPs) are a group of functionally related proteins, which target the cAMP dependent protein kinase A (PKA) in close proximity to its physiological substrates for ensuring their regulation. A novel PKA anchoring protein, termed AKAP-Lbc, has been recently characterized, which also functions as a guanine nucleotide exchange factor (GEF) for the small GTPase Rho. AKAP-Lbc is regulated in a bi-directional manner by signals which activate or deactivate its Rho-GEF activity. Activation is mediated by the alpha subunit of the heterotrimeric G protein G12, whereas inhibition occurs following its interaction with PKA and 14-3-3. AKAP-Lbc is predominantly expressed in the heart and might regulate important processes such as hypertrophy and differentiation of cardiomyocytes. Therefore ít is crucial to elucidate the molecular mechanisms involved in the regulation of the Rho-GEF activity of AKAP-Lbc. The general aim of the present thesis work is the characterization of two novel molecular mechanisms involved in the regulation of the Rho-GEF activity of AKAP-Lbc. The first mechanism consists of the. regulation of AKAP-Lbc activity through its homooligomerization. I report here that homo-oligomerization maintains AKAP-Lbc inactive, under a conformation suitable for ensuring the inhibitory effect of anchored PKA and 14-33 on AKAP-Lbc activity. The second mechanism concerns the regulation of AKAP-Lbc activity through a novel interaction between AKAP-Lbc and ubiquitin-like protein LC3. LC3 is a key mediator of autophagy, which is a cellular process that targets cytosolic proteins to the lysosome for degradation. This process is particularly important for cardiomyocyte survival during conditions of nutrient starvation. Here, I show that LC3 is a negative regulator of the Rho-GEF activity of AKAP-Lbc, which suggests that, beyond its well established role in autophagy, LC3 can participate in the regulation of Rho signaling in cells. Overall, these findings contribute to understand how the AKAP-Lbc signaling complex can regulate the Rho signaling in cells. Beyond its interest at the biochemical level, this work might also contribute to elucidate the signaling network that regulate physiological events in the heart.

Polarized cell growth in Arabidopsis requires endosomal recycling mediated by GBF1-related ARF exchange factors.

Polarized tip growth is a fundamental cellular process in many eukaryotic organisms, mediating growth of neuronal axons and dendrites or fungal hyphae. In plants, pollen and root hairs are cellular model systems for analysing tip growth. Cell growth depends on membrane traffic. The regulation of this membrane traffic is largely unknown for tip-growing cells, in contrast to cells exhibiting intercalary growth. Here we show that in Arabidopsis, GBF1-related exchange factors for the ARF GTPases (ARF GEFs) GNOM and GNL2 play essential roles in polar tip growth of root hairs and pollen, respectively. When expressed from the same promoter, GNL2 (in contrast to the early-secretory ARF GEF GNL1) is able to replace GNOM in polar recycling of the auxin efflux regulator PIN1 from endosomes to the basal plasma membrane in non-tip growing cells. Thus, polar recycling facilitates polar tip growth, and GNL2 seems to have evolved to meet the specific requirement of fast-growing pollen in higher plants.

Mobility Among Social Education Students at the University of Girona: Taking Stock of a Decade of Fieldwork Practice Abroad

The following article is divided into five sections, each one with a specific objective. The first section briefly presents the student mobility experiences obtained basically through the fieldwork practice course in social education studies at the University of Girona. The second section delves more deeply to explore the value of the exchange and the student mobility experience over one semester of intensive fieldwork practice. The third section presents data about the students who have participated in this experience inall ten of the graduating classes. The fourth part offers an assessment of the experience and reports which aspects are considered essential to a good student mobility experience. Finally, various actions to be taken to improve these educational experiences within the social education studies at the University of Girona are specified

Mitotic regulation by Polo-like kinase 1 and the Chromosomal Passenger Complex

During mitosis, the duplicated genome must be accurately divided between two daughter cells. Polo-like kinase 1 (Plk1) and Aurora B kinase, together with its binding partners Incenp, Survivin and Borealin (chromosomal passenger complex, CPC), have key roles in coordinating mitotic events. The accuracy of cell division is safeguarded by a signaling cascade termed the mitotic spindle checkpoint (SC), which ensures that chromosomes are not physically separated before correct bipolar attachments have been formed between kinetochores and spindle microtubules (MT). An inhibitory “wait anaphase” signal, which delays chromosome separation (anaphase onset), is created at individual kinetochores and broadcasted throughout the cell in response to lack of kinetochore-microtubule (kMT) attachment or proper interkinetochore tension. It is believed that the fast turnover of SC molecules at kinetochores contributes to the cell’s ability to produce this signal and enables rapid responses to changing cellular conditions. Kinetochores that lack MT attachment and tension express a certain phosphoepitope called the 3F3/2 phosphoepitope, which has been linked to SC signaling. In the experimental part, we investigated the regulation of the 3F3/2 phosphoepitope, analyzed whether CPC molecules turn over at centromeres, and dissected the mitotic roles of the CPC using a microinjection technique that allowed precise temporal control over its function. We found that the kinetochore 3F3/2 phosphoepitope is created by Plk1, and that CPC proteins exhibit constant exchange at centromeres. Moreover, we found that CPC function is necessary in the regulation of chromatid movements and spindle morphology in anaphase. In summary, we identified new functions of key mitotic regulators Plk1 and CPC, and provided insighs into the coordination of mitotic events.

Tests of International Asset Pricing Models in Scandinavian Stock Markets

This thesis examines whether global, local and exchange risks are priced in Scandinavian countries’ equity markets by using conditional international asset pricing models. The employed international asset pricing models are the world capital asset pricing model, the international asset pricing model augmented with the currency risk, and the partially segmented model augmented with the currency risk. Moreover, this research traces estimated equity risk premiums for the Scandinavian countries. The empirical part of the study is performed using generalized method of moments approach. Monthly observations from February 1994 to June 2007 are used. Investors’ conditional expectations are modeled using several instrumental variables. In order to keep system parsimonious the prices of risk are assumed to be constant whereas expected returns and conditional covariances vary over time. The empirical findings of this thesis suggest that the prices of global and local market risk are priced in the Scandinavian countries. This indicates that the Scandinavian countries are mildly segmented from the global markets. Furthermore, the results show that the exchange risk is priced in the Danish and Swedish stock markets when the partially segmented model is augmented with the currency risk factor.

Essays on pricing of risk and international linkage of Russian stock market

Last two decades have seen a rapid change in the global economic and financial situation; the economic conditions in many small and large underdeveloped countries started to improve and they became recognized as emerging markets. This led to growth in the amounts of global investments in these countries, partly spurred by expectations of higher returns, favorable risk-return opportunities, and better diversification alternatives to global investors. This process, however, has not been without problems and it has emphasized the need for more information on these markets. In particular, the liberalization of financial markets around the world, globalization of trade and companies, recent formation of economic and regional blocks, and the rapid development of underdeveloped countries during the last two decades have brought a major challenge to the financial world and researchers alike. This doctoral dissertation studies one of the largest emerging markets, namely Russia. The motivation why the Russian equity market is worth investigating includes, among other factors, its sheer size, rapid and robust economic growth since the turn of the millennium, future prospect for international investors, and a number of important major financial reforms implemented since the early 1990s. Another interesting feature of the Russian economy, which gives motivation to study Russian market, is Russia’s 1998 financial crisis, considered as one of the worst crisis in recent times, affecting both developed and developing economies. Therefore, special attention has been paid to Russia’s 1998 financial crisis throughout this dissertation. This thesis covers the period from the birth of the modern Russian financial markets to the present day, Special attention is given to the international linkage and the 1998 financial crisis. This study first identifies the risks associated with Russian market and then deals with their pricing issues. Finally some insights about portfolio construction within Russian market are presented. The first research paper of this dissertation considers the linkage of the Russian equity market to the world equity market by examining the international transmission of the Russia’s 1998 financial crisis utilizing the GARCH-BEKK model proposed by Engle and Kroner. Empirical results shows evidence of direct linkage between the Russian equity market and the world market both in regards of returns and volatility. However, the weakness of the linkage suggests that the Russian equity market was only partially integrated into the world market, even though the contagion can be clearly seen during the time of the crisis period. The second and the third paper, co-authored with Mika Vaihekoski, investigate whether global, local and currency risks are priced in the Russian stock market from a US investors’ point of view. Furthermore, the dynamics of these sources of risk are studied, i.e., whether the prices of the global and local risk factors are constant or time-varying over time. We utilize the multivariate GARCH-M framework of De Santis and Gérard (1998). Similar to them we find price of global market risk to be time-varying. Currency risk also found to be priced and highly time varying in the Russian market. Moreover, our results suggest that the Russian market is partially segmented and local risk is also priced in the market. The model also implies that the biggest impact on the US market risk premium is coming from the world risk component whereas the Russian risk premium is on average caused mostly by the local and currency components. The purpose of the fourth paper is to look at the relationship between the stock and the bond market of Russia. The objective is to examine whether the correlations between two classes of assets are time varying by using multivariate conditional volatility models. The Constant Conditional Correlation model by Bollerslev (1990), the Dynamic Conditional Correlation model by Engle (2002), and an asymmetric version of the Dynamic Conditional Correlation model by Cappiello et al. (2006) are used in the analysis. The empirical results do not support the assumption of constant conditional correlation and there was clear evidence of time varying correlations between the Russian stocks and bond market and both asset markets exhibit positive asymmetries. The implications of the results in this dissertation are useful for both companies and international investors who are interested in investing in Russia. Our results give useful insights to those involved in minimising or managing financial risk exposures, such as, portfolio managers, international investors, risk analysts and financial researchers. When portfolio managers aim to optimize the risk-return relationship, the results indicate that at least in the case of Russia, one should account for the local market as well as currency risk when calculating the key inputs for the optimization. In addition, the pricing of exchange rate risk implies that exchange rate exposure is partly non-diversifiable and investors are compensated for bearing the risk. Likewise, international transmission of stock market volatility can profoundly influence corporate capital budgeting decisions, investors’ investment decisions, and other business cycle variables. Finally, the weak integration of the Russian market and low correlations between Russian stock and bond market offers good opportunities to the international investors to diversify their portfolios.

Interdependence of Emerging Eastern European stock markets

One of the main developments in the global economy during the past decades has been the growth of emerging economies. Projections for their long-term growth, changes in the investment climate, corporate transparency and demography point to an increasing role for these emerging economies in the global economy. Today, emerging economies are usually considered as financial markets offering opportunities for high returns, good risk diversification and improved return-to-risk ratios. However, researchers have noted that these advantages may be in decline because of the increasing market integration. Nevertheless, it is likely that certain financial markets and specific sectors will remain partially segmented and somewhat insulated from the global economy for the year to come. This doctoral dissertation investigates several stock markets in Emerging Eastern Europe (EEE), including the ones in Russia, Poland, Hungary, the Czech Republic, Bulgaria and Slovenia. The objective is to analyze the returns and financial risks in these emerging markets from international investor’s point of view. This study also examines the segmentation/integration of these financial markets and the possibilities to diversify and hedge financial risk. The dissertation is divided into two parts. The first includes a review of the theoretical background for the articles and a review of the literature on EEE stock markets. It includes an overview of the methodology and research design applied in the analysis and a summary of articles from the second part of this dissertation and their main findings. The second part consists of four research publications. This work contributes to studies on emerging stock markets in four ways. First, it adds to the body of research on the pricing of risk, providing new empirical evidence about partial stock market segmentation in EEE. The results suggest that the aggregate emerging market risk is a relevant driver for stock market returns and that this market risk can be used to price financial instruments and forecast their performance. Second, it contributes to the empirical research on the integration of stock markets, asset prices and exchange rates by identifying the relationships between these markets through volatility and asset pricing. The results show that certain sectors of stock markets in EEE are not as integrated as others. For example, the Polish consumer goods sector, the Hungarian telecommunications sector, and the Czech financial sector are somewhat isolated from their counterparts elsewhere in Europe. Nevertheless, an analysis of the impact of EU accession in 2004 on stock markets suggests that most of the EEE markets are becoming increasingly integrated with the global markets. Third, this thesis complements the scientific literature in the field of shock and volatility spillovers by examining the mechanism of spillover distribution among the EU and EEE countries. The results illustrate that spillovers in emerging markets are mostly from a foreign exchange to the stock markets. Moreover, the results show that the effects of external shocks on stock markets have increased after the enlargement of the EU in 2004. Finally, this study is unique because it analyzes the effects of foreign macroeconomic news on geographically closely related countries. The results suggest that the effects of macroeconomic announcements on volatility are significant and have effect that varies across markets and their sectors. Moreover, the results show that the foreign macroeconomic news releases, somewhat surprisingly, have a greater effect on the EEE markets than the local macroeconomic news. This dissertation has a number of implications for the industry and for practitioners. It analyses financial risk associated with investing in Emerging Eastern Europe. Investors may use this information to construct and optimize investment portfolios. Moreover, this dissertation provides insights for investors and portfolio managers considering asset allocation to protect value or obtain higher returns. The results have also implications for asset pricing and portfolio selection in light of macroeconomic news releases.