Corporate philanthropy, reputation risk management and shareholder value: A study of Australian corporate giving

This study examines the role of corporate philanthropy in the management of reputation risk and shareholder value of the top 100 ASX listed Australian firms for the three years 2011-2013. The results of this study demonstrate the business case for corporate philanthropy and hence encourage corporate philanthropy by showing increasing firms’ investment in corporate giving as a percentage of profit before tax, increases the likelihood of an increase in shareholder value. However, the proviso is that firms must also manage their reputation risk at the same time. There is a negative association between corporate giving and shareholder value (Tobin’s Q) which is mitigated by firms’ management of reputation. The economic significance of this result is that for every cent in the dollar the firm spends on corporate giving, Tobin’s Q will decrease by 0.413%. In contrast, if the firm increase their reputation by 1 point then Tobin’s Q will increase by 0.267%. Consequently, the interaction of corporate giving and reputation risk management is positively associated with shareholder value. These results are robust while controlling for potential endogeneity and reverse causality. This paper assists both academics and practitioners by demonstrating that the benefits of corporate philanthropy extend beyond a gesture to improve reputation or an attempt to increase financial performance, to a direct collaboration between all the factors where the benefits far outweigh the costs.

Essays on Stock Option Compensation and the Role of Incentives and Risk (summary section only)

Managerial pay-for-performance sensitivity has increased rapidly around the world. Early empirical research showed that pay-for-performance sensitivity resulting from stock ownership and stock options appeared to be quite low during the 1970s and early 1980s in the U.S. However, recent empirical research from the U.S. shows an enormous increase in pay-for-performance sensitivity. The global trend has also reached Finland, where stock options have become a major ingredient of executive compensation. The fact that stock options seem to be an appealing form of remuneration from a theoretical point of view combined with the observation that the use of this compensation form has increased significantly during the recent years, implies that research on the dynamics of stock option compensation is highly relevant for the academic community, as well as for practitioners and regulators. The research questions of the thesis are analyzed in four separate essays. The first essay examines whether stock option compensation practices of Finnish firms are consistent with predictions from principal-agent theory. The second essay explores one of the major puzzles in the compensation literature by studying determinants of stock option contract design. In theory, optimal contract design should vary according to firm characteristics. However, in the U.S., variation in contract design seems to be surprisingly low, a phenomenon generally attributed to tax and accounting considerations. In Finland, however, firms are not subject to stringent contracting restrictions, and the variation in contract design tends, in fact, to be quite substantial. The third essay studies the impact of price- and risk incentives arising from stock option compensation on firm investment. In addition, the essay explores one of the most debated questions in the literature, in particular, the relation between incentives and firm performance. Finally, several strands of literature in both economics and corporate finance hypothesize that economic uncertainty is related to corporate decision-making. Previous research has shown that risk tends to slow down firm investment. In the fourth essay, it is hypothesized that firm risk slows down growth from a more universal perspective. Consistent with this view, it is shown that risk not only tends to slow down firm investment, but also employment growth. Moreover, the essay explores whether the nature of firms’ compensation policies, in particular, whether firms make use of stock option compensation, affects the relation between risk and firm growth. In summary, the four essays contribute to the current understanding of stock options as a form of equity incentives, and how incentives and risk affect corporate decision-making. By this, the thesis promotes the knowledge related to the modern theory of the firm.

Political Risk in Credit Evaluation: Empirical Studies and Survey Results

Financing trade between economic agents located in different countries is affected by many types of risks, resulting from incomplete information about the debtor, the problems of enforcing international contracts, or the prevalence of political and financial crises. Trade is important for economic development and the availability of trade finance is essential, especially for developing countries. Relatively few studies treat the topic of political risk, particularly in the context of international lending. This thesis explores new ground to identify links between political risk and international debt defaults. The core hypothesis of the study is that the default probability of debt increases with increasing political risk in the country of the borrower. The thesis consists of three essays that support the hypothesis from different angles of the credit evaluation process. The first essay takes the point of view of an international lender assessing the credit risk of a public borrower. The second investigates creditworthiness assessment of companies. The obtained results are substantiated in the third essay that deals with an extensive political risk survey among finance professionals in developing countries. The financial instruments of core interest are export credit guaranteed debt initiated between the Export Credit Agency of Finland and buyers in 145 countries between 1975 and 2006. Default events of the foreign credit counterparts are conditioned on country-specific macroeconomic variables, corporate-specific accounting information as well as political risk indicators from various international sources. Essay 1 examines debt issued to government controlled institutions and conditions public default events on traditional macroeconomic fundamentals, in addition to selected political and institutional risk factors. Confirming previous research, the study finds country indebtedness and the GDP growth rate to be significant indicators of public default. Further, it is shown that public defaults respond to various political risk factors. However, the impact of the risk varies between countries at different stages of economic development. Essay 2 proceeds by investigating political risk factors as conveivable drivers of corporate default and uses traditional accounting variables together with new political risk indicators in the credit evaluation of private debtors. The study finds links between corporate default and leverage, as well as between corporate default and the general investment climate and measeures of conflict in the debtor country. Essay 3 concludes the thesis by offering survey evidence on the impact of political risk on debt default, as perceived and experienced by 103 finance professionals in 38 developing countries. Taken together, the results of the thesis suggest that various forms of political risk are associated with international debt defaults and continue to pose great concerns for both international creditors and borrowers in developing countries. The study provides new insights on the importance of variable selection in country risk analysis, and shows how political risk is actually perceived and experienced in the riskier, often lower income countries of the global economy.

Snoring and sleep apnea in children

Snoring is a primary and major clinical symptom of upper airway obstruction during sleep. Sleep-disordered breathing ranges from primary snoring to significant partial upper airway obstruction, and obstructive sleep apnea. Adult snoring and obstructive sleep apnea have been extensively studied, whereas less is known about these disorders in children. Snoring and more severe obstructive sleep apnea have been shown to have a harmful effect on the neurobehavioral development of children, but the mechanisms of this effect remains unknown. Furthermore, the correlation of this effect to objective sleep study parameters remains poor. This study evaluated the prevalence of snoring in preschool-aged children in Finland. Host and environmental risk factors, and neurobehavioral and neurocognitive symptoms of children suffering from snoring or obstructive sleep apnea were also investigated. The feasibility of acoustic rhinometry in young children was assessed. The prevalence and risk factors of snoring (I) were evaluated by a questionnaire. The random sample included 2100 children aged 1-6 years living in Helsinki. All 3- to 6-year-old children whose parents reported their child to snore always, often, or sometimes were categorized as snorers, and invited to participate to the clinical study (II-IV). Non-snoring children whose parents were willing to participate in the clinical study were invited to serve as controls. Children underwent a clinical ear-nose-throat examination. Emotional, behavioral, and cognitive performances were evaluated by Child Behavioral Checklist (CBCL), Wechsler Preschool and Primary Scale of Intelligence (WPPSI-R) and NEPSY-A Developmental Neuropsychological Assessment (NEPSY). Nasal volume was measured by acoustic rhinometry, and nasal resistance by rhinomanometry. Lateral and posteroanterior cephalometry were performed. A standard overnight ambulatory polysomnography was performed in the home environment. Twenty-six healthy children were tested in order to assess the feasibility of acoustic rhinometry in young children (V). Snoring was common in children; 6.3% of children snored always or often, whereas 81.3% snored never or occasionally. No differences were apparent between snorers and non-snorers regarding age, or gender. Pediatric snoring was associated with recurrent upper respiratory infections, otitis media, and allergic rhinitis. Exposure to parental tobacco smoke, especially maternal smoking, was more common among snorers. Rhinitis was more common among children who exposured to tobacco smoke. Overnight polysomnography (PSG) was performed on 87 children; 74% showed no signs of significant upper airway obstruction during sleep. Three children had obstructive apnea/hypopnea index (OAHI) greater than 5/h. Age, gender, or a previous adenoidectomy or tonsillectomy did not correlate with OAHI, whereas tonsillar size did correlate with OAHI. Relative body weight and obesity correlated with none of the PSG parameters. In cephalometry, no clear differences or correlations were found in PSG parameters or between snorers and non-snorers. No correlations were observed between acoustic rhinometry, rhinomanometry, and PSG parameters. Psychiatric symptoms were more frequent in the snoring group than in the nonsnoring group. In particular, anxious and depressed symptoms were more prevalent in the snoring group. Snoring children frequently scored lower in language functions. However, PSG parameters correlated poorly with neurocognitive test results in these children. This study and previous studies indicate that snoring without episodes of obstructive apnea or SpO2 desaturations may cause impairment in behavioral and neurocognitive functions. The mechanism of action remains unknown. Exposure to parental tobacco smoke is more common among snorers than non-snorers, emphasizing the importance of a smoke-free environment. Children tolerated acoustic rhinometry measurements well.

Microstructural, dielectric, pyroelectric and ferroelectric studies on partially grain-oriented SrBi2Ta2O9 ceramics

Partially grain-oriented (48%) ceramics of strontium bismuth tantalate (SrBi2Ta2O9) have been fabricated via conventional sintering. The grain-orientation factor of the ceramics was determined, as a function of both the sintering temperature and duration of sintering using X-ray powder diffraction (XRD) techniques. Variations in microstructural features (from acircular to plate like morphology) as a function of sintering temperature of the pellets were monitored by Scanning Electron Microscopy (SEM). The dielectric constant and loss measurements as functions of both frequency and temperature have been carried out along the directions parallel and perpendicular to the pressing axis. The anisotropy (epsilon(rn)/epsilon(rp)) associated was found to be 2.21. The effective dielectric constant of the samples with varying porosity was predicted using different dielectric mixture formulae. The grain boundary and grain interior contributions to the dielectric properties were rationalized using the impedance spectroscopy. The pyroelectric coefficient for strontium bismuth tantalate ceramic was determined along the parallel and perpendicular directions to the pressing axis and found to be -23 muC/m(2)K and -71 muC/m(2)K, respectively at 300 K. The ferroelectric properties of these partially grain-oriented ceramics are superior in the direction perpendicular to the pressing axis to that in the parallel direction.

Recent Advances in Low CTE and High Density System-on-a-Package (SOP) Substrate with Thin Film Component Integration

The Packaging Research Center has been developing next generation system-on-a-package (SOP) technology with digital, RF, optical, and sensor functions integrated in a single package/module. The goal of this effort is to develop a platform substrate technology providing very high wiring density and embedded thin film passive and active components using PWB compatible materials and processes. The latest SOP baseline process test vehicle has been fabricated on novel Si-matched CTE, high modulus C-SiC composite core substrates using 10mum thick BCB dielectric films with loss tangent of 0.0008 and dielectric constant of 2.65. A semi-additive plating process has been developed for multilayer microvia build-up using BCB without the use of any vacuum deposition or polishing/CMP processes. PWB and package substrate compatible processes such as plasma surface treatment/desmear and electroless/electrolytic pulse reverse plating was used. The smallest line width and space demonstrated in this paper is 6mum with microvia diameters in the 15-30mum range. This build-up process has also been developed on medium CTE organic laminates including MCL-E-679F from Hitachi Chemical and PTFE laminates with Cu-Invar-Cu core. Embedded decoupling capacitors with capacitance density of >500nF/cm2 have been integrated into the build-up layers using sol-gel synthesized BaTiO3 thin films (200-300nm film thickness) deposited on copper foils and integrated using vacuum lamination and subtractive etch processes. Thin metal alloy resistor films have been integrated into the SOP substrate using two methods: (a) NiCrAlSi thin films (25ohms per square) deposited on copper foils (Gould Electronics) laminated on the build-up layers and two step etch process for resistor definition, and (b) electroless plated Ni-W-P thin films (70 ohms to few Kohms per square) on the BCB dielectric by plasma surface treatment and activation. The electrical design and build-up layer structure along- - with key materials and processes used in the fabrication of the SOP4 test vehicle were presented in this paper. Initial results from the high density wiring and embedded thin film components were also presented. The focus of this paper is on integration of materials, processes and structures in a single package substrate for system-on-a-package (SOP) implementation

Low loss and frequency (1 kHz–1 MHz) independent dielectric characteristics of 3BaO–3TiO2–B2O3 glasses

X-ray powder diffraction along with differential thermal analysis carried out on the as-quenched samples in the 3BaO–3TiO2–B2O3 system confirmed their amorphous and glassy nature, respectively. The dielectric constants in the 1 kHz–1 MHz frequency range were measured as a function of temperature (323–748 K). The dielectric constant and loss were found to be frequency independent in the 323–473 K temperature range. The temperature coefficient of dielectric constant was estimated using Havinga’s formula and found to be 16 ppm K−1. The electrical relaxation was rationalized using the electric modulus formalism. The dielectric constant and loss were 17±0.5 and 0.005±0.001, respectively at 323 K in the 1 kHz–1 MHz frequency range which may be of considerable interest to capacitor industry.

Dimethyl sulfoxide induced structural transformations and non-monotonic concentration dependence of conformational fluctuation around active site of lysozyme

Experimental studies have observed significant changes in both structure and function of lysozyme (and other proteins) on addition of a small amount of dimethyl sulfoxide (DMSO) in aqueous solution. Our atomistic molecular dynamic simulations of lysozyme in water-DMSO reveal the following sequence of changes on increasing DMSO concentration. (i) At the initial stage (around 5% DMSO concentration) protein's conformational flexibility gets markedly suppressed. From study of radial distribution functions, we attribute this to the preferential solvation of exposed protein hydrophobic residues by the methyl groups of DMSO. (ii) In the next stage (10-15% DMSO concentration range), lysozome partially unfolds accompanied by an increase both in fluctuation and in exposed protein surface area. (iii) Between 15-20% concentration ranges, both conformational fluctuation and solvent accessible protein surface area suddenly decrease again indicating the formation of an intermediate collapse state. These results are in good agreement with near-UV circular dichroism (CD) and fluorescence studies. We explain this apparently surprising behavior in terms of a structural transformation which involves clustering among the methyl groups of DMSO. (iv) Beyond 20% concentration of DMSO, the protein starts its final sojourn towards the unfolding state with further increase in conformational fluctuation and loss in native contacts. Most importantly, analysis of contact map and fluctuation near the active site reveal that both partial unfolding and conformational fluctuations are centered mostly on the hydrophobic core of active site of lysozyme. Our results could offer a general explanation and universal picture of the anomalous behavior of protein structure-function observed in the presence of cosolvents (DMSO, ethanol, tertiary butyl alcohol, dioxane) at their low concentrations. (C) 2012 American Institute of Physics. [http://dx.doi.org/10.1063/1.3694268]

Loss and gain signals in broadband stimulated-Raman spectra: Theoretical analysis

Stimulated optical signals obtained by subjecting the system to a narrow band and a broadband pulse show both gain and loss Raman features at the red and blue side of the narrow beam, respectively. Recently observed temperature-dependent asymmetry in these features Mallick et al., J. Raman Spectrosc. 42, 1883 (2011); Dang et al., Phys. Rev. Lett. 107, 043001 (2011)] has been attributed to the Stokes and anti-Stokes components of the third-order susceptibility, chi((3)). By treating the setup as a steady state of an open system coupled to four quantum radiation field modes, we show that Stokes and anti-Stokes processes contribute to both the loss and gain resonances. chi((3)) predicts loss and gain signals with equal intensity for electronically off-resonant excitation. Some asymmetry may exist for resonant excitation. However, this is unrelated to the Stokes vs anti-Stokes processes. Any observed temperature-dependent asymmetry must thus originate from effects lying outside the chi((3)) regime.

Extension of TSVM to multi-class and hierarchical text classification problems With general losses

Transductive SVM (TSVM) is a well known semi-supervised large margin learning method for binary text classification. In this paper we extend this method to multi-class and hierarchical classification problems. We point out that the determination of labels of unlabeled examples with fixed classifier weights is a linear programming problem. We devise an efficient technique for solving it. The method is applicable to general loss functions. We demonstrate the value of the new method using large margin loss on a number of multi-class and hierarchical classification datasets. For maxent loss we show empirically that our method is better than expectation regularization/constraint and posterior regularization methods, and competitive with the version of entropy regularization method which uses label constraints.

Anisotropic, gradient and metal-like mechanical behaviors of teeth and their implications on tooth functions

The anisotropy and gradient of the elastic modulus and the hardness of teeth were investigated by means of instrumented indentation method. Such properties are attributed to the unique microstructures of teeth based on scanning electron microscopic analysis. By comparing the relationship between the ratio of hardness to the reduced elastic modulus and the ratio of elastic unloading work to the total work of teeth in course of indentation to those of other materials, we found that the material behaviors of teeth display metal-like characteristics rather than ceramics as considered traditionally. These material behaviors and relevant functions are discussed briefly.

Energy Functions And Basic Equations For Ferroelectrics

Energy functions (or characteristic functions) and basic equations for ferroelectrics in use today are given by those for ordinary dielectrics in the physical and mechanical communications. Based on these basic equations and energy functions, the finite element computation of the nonlinear behavior of the ferroelectrics has been carried out by several research groups. However, it is difficult to process the finite element computation further after domain switching, and the computation results are remarkably deviating from the experimental results. For the crack problem, the iterative solution of the finite element calculation could not converge and the solutions for fields near the crack tip oscillate. In order to finish the calculation smoothly, the finite element formulation should be modified to neglect the equivalent nodal load produced by spontaneous polarization gradient. Meanwhile, certain energy functions for ferroelectrics in use today are not compatible with the constitutive equations of ferroelectrics and need to be modified. This paper proposes a set of new formulae of the energy functions for ferroelectrics. With regard to the new formulae of the energy functions, the new basic equations for ferroelectrics are derived and can reasonably explain the question in the current finite element analysis for ferroelectrics.

Single cell proteomics microchip to profile immune function, with applications in stem cell biology, translational disease mechanism study and clinical therapeutics monitoring

In response to infection or tissue dysfunction, immune cells develop into highly heterogeneous repertoires with diverse functions. Capturing the full spectrum of these functions requires analysis of large numbers of effector molecules from single cells. However, currently only 3-5 functional proteins can be measured from single cells. We developed a single cell functional proteomics approach that integrates a microchip platform with multiplex cell purification. This approach can quantitate 20 proteins from >5,000 phenotypically pure single cells simultaneously. With a 1-million fold miniaturization, the system can detect down to ~100 molecules and requires only ~104 cells. Single cell functional proteomic analysis finds broad applications in basic, translational and clinical studies. In the three studies conducted, it yielded critical insights for understanding clinical cancer immunotherapy, inflammatory bowel disease (IBD) mechanism and hematopoietic stem cell (HSC) biology.

To study phenotypically defined cell populations, single cell barcode microchips were coupled with upstream multiplex cell purification based on up to 11 parameters. Statistical algorithms were developed to process and model the high dimensional readouts. This analysis evaluates rare cells and is versatile for various cells and proteins. (1) We conducted an immune monitoring study of a phase 2 cancer cellular immunotherapy clinical trial that used T-cell receptor (TCR) transgenic T cells as major therapeutics to treat metastatic melanoma. We evaluated the functional proteome of 4 antigen-specific, phenotypically defined T cell populations from peripheral blood of 3 patients across 8 time points. (2) Natural killer (NK) cells can play a protective role in chronic inflammation and their surface receptor – killer immunoglobulin-like receptor (KIR) – has been identified as a risk factor of IBD. We compared the functional behavior of NK cells that had differential KIR expressions. These NK cells were retrieved from the blood of 12 patients with different genetic backgrounds. (3) HSCs are the progenitors of immune cells and are thought to have no immediate functional capacity against pathogen. However, recent studies identified expression of Toll-like receptors (TLRs) on HSCs. We studied the functional capacity of HSCs upon TLR activation. The comparison of HSCs from wild-type mice against those from genetics knock-out mouse models elucidates the responding signaling pathway.

In all three cases, we observed profound functional heterogeneity within phenotypically defined cells. Polyfunctional cells that conduct multiple functions also produce those proteins in large amounts. They dominate the immune response. In the cancer immunotherapy, the strong cytotoxic and antitumor functions from transgenic TCR T cells contributed to a ~30% tumor reduction immediately after the therapy. However, this infused immune response disappeared within 2-3 weeks. Later on, some patients gained a second antitumor response, consisted of the emergence of endogenous antitumor cytotoxic T cells and their production of multiple antitumor functions. These patients showed more effective long-term tumor control. In the IBD mechanism study, we noticed that, compared with others, NK cells expressing KIR2DL3 receptor secreted a large array of effector proteins, such as TNF-α, CCLs and CXCLs. The functions from these cells regulated disease-contributing cells and protected host tissues. Their existence correlated with IBD disease susceptibility. In the HSC study, the HSCs exhibited functional capacity by producing TNF-α, IL-6 and GM-CSF. TLR stimulation activated the NF-κB signaling in HSCs. Single cell functional proteome contains rich information that is independent from the genome and transcriptome. In all three cases, functional proteomic evaluation uncovered critical biological insights that would not be resolved otherwise. The integrated single cell functional proteomic analysis constructed a detail kinetic picture of the immune response that took place during the clinical cancer immunotherapy. It revealed concrete functional evidence that connected genetics to IBD disease susceptibility. Further, it provided predictors that correlated with clinical responses and pathogenic outcomes.

Coastal community hazard mitigation and community rating system of NFIP

Storm force flooding continues to be a major concern in the hurricane season and causes considerable loss to the coastal communities. National Flood Insurance Program (NFIP) provides recovery resources for the flood disaster and dissuades uneconomic uses from locating in flood hazard area. In order to motivate flood insurance purchase and promote increased flood hazard mitigation, the Community Rating System (CRS) that is a part of NFIP, credits 18 community floodplain management activities. However, CRS has been marked by a lack of active participation since its inception limiting its potential effectiveness. As of January 2008, 1080 communities, representing only 5% of all the NFIP communities have enrolled in CRS. Little empirical evidence exists to shed light on what factors influence the establishment of local hazard mitigation projects. To fill this gap, we propose to analyze flood hazard mitigation projects in 37 North Carolina coastal counties between 2002 and 2008. Specifically, we will examine the influence of physical, risk, and socioeconomic factors on coastal community hazard mitigation decisions as reflected in the CRS score. Ultimately, our project will forge a better understanding of community decision making, as related to natural hazards. (PDF contains 4 pages)