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.

Methylenetetrahydrofolate reductase gene polymorphisms and risk of acute lymphoblastic leukemia in children

Methylenetetrahydrofolate reductase (MTHFR) is a critical enzyme in folate metabolism and is involved in DNA synthesis, DNA repair and DNA methylation. Genetic polymorphisms of this enzyme have been shown to impact several diseases, including cancer. Leukemias are malignancies arising from rapidly proliferating hematopoietic cells having great requirement of DNA synthesis. This case-control study was undertaken to analyze the association of the MTHFR gene polymorphisms 677 C"T and 1298 A"C and the risk of acute lymphoblastic leukemia in children. Materials and Methods: Eighty-six patients aged below 15 years with a confirmed diagnosis of acute lymphoblastic leukemia (ALL) and 99 matched controls were taken for this study. Analysis of the polymorphisms was done using the polymerase chain reaction -restriction fragment length polymorphism (PCR-RFLP) method. Results: Frequency of MTHFR 677 CC and CT were 85.9% and 14.1% in the controls, and 84.9% and 15.1% in the cases. The 'T' allele frequency was 7% and 7.5% in cases and controls respectively. The frequency of MTHFR 1298 AA, AC, and CC were 28.3%, 55.6% and 16.1% for controls and 23.3%, 59.3% and 17.4% for cases respectively. The 'C' allele frequency for 1298 A→C was 43.9% and 47% respectively for controls and cases. The odds ratio (OR) for C677T was 1.08 (95% CI 0.48- 2.45, p = 0.851) and OR for A1298C was 1.29(95% CI 0.65-2.29, p = 0.46) and OR for 1298 CC was 1.31 (95% CI 0.53-3.26, p =0.56). The OR for the combined heterozygous status (677 CT and 1298 AC) was 1.94 (95% CI 0.58 -6.52, p = 0.286). Conclusion: The prevalence of 'T' allele for 677 MTHFR polymorphism was low in the population studied. There was no association between MTHFR 677 C→T and 1298 A→C gene polymorphisms and risk of ALL, which may be due to the small sample size.

Essays on the Linkages Between Financial Markets, and Risk Asymmetries (summary section only)

During the last few decades there have been far going financial market deregulation, technical development, advances in information technology, and standardization of legislation between countries. As a result, one can expect that financial markets have grown more interlinked. The proper understanding of the cross-market linkages has implications for investment and risk management, diversification, asset pricing, and regulation. The purpose of this research is to assess the degree of price, return, and volatility linkages between both geographic markets and asset categories within one country, Finland. Another purpose is to analyze risk asymmetries, i.e., the tendency of equity risk to be higher after negative events than after positive events of equal magnitude. The analysis is conducted both with respect to total risk (volatility), and systematic risk (beta). The thesis consists of an introductory part and four essays. The first essay studies to which extent international stock prices comove. The degree of comovements is low, indicating benefits from international diversification. The second essay examines the degree to which the Finnish market is linked to the “world market”. The total risk is divided into two parts, one relating to world factors, and one relating to domestic factors. The impact of world factors has increased over time. After 1993, when foreign investors were allowed to freely invest in Finnish assets, the risk level has been higher than previously. This was also the case during the economic recession in the beginning of the 1990’s. The third essay focuses on the stock, bond, and money markets in Finland. According to a trading model, the degree of volatility linkages should be strong. However, the results contradict this. The linkages are surprisingly weak, even negative. The stock market is the most independent, while the money market is affected by events on the two other markets. The fourth essay concentrates on volatility and beta asymmetries. Contrary to many international studies there are only few cases of risk asymmetries. When they occur, they tend to be driven by the market-wide component rather than the portfolio specific element.

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.

Maximum Loss Calculation using Scenario Analysis, Heavy Tails and Implied Volatility Patterns

The objective of this paper is to improve option risk monitoring by examining the information content of implied volatility and by introducing the calculation of a single-sum expected risk exposure similar to the Value-at-Risk. The figure is calculated in two steps. First, there is a need to estimate the value of a portfolio of options for a number of different market scenarios, while the second step is to summarize the information content of the estimated scenarios into a single-sum risk measure. This involves the use of probability theory and return distributions, which confronts the user with the problems of non-normality in the return distribution of the underlying asset. Here the hyperbolic distribution is used to describe one alternative for dealing with heavy tails. Results indicate that the information content of implied volatility is useful when predicting future large returns in the underlying asset. Further, the hyperbolic distribution provides a good fit to historical returns enabling a more accurate definition of statistical intervals and extreme events.

Total risk rating and stability analysis of embankment dams in the Kachchh Region, Gujarat, India

A method for total risk analysis of embankment dams under earthquake conditions is discussed and applied to the selected embankment dams, i.e., Chang, Tapar, Rudramata, and Kaswati located in the Kachchh region of Gujarat, India, to obtain the seismic hazard rating of the dam site and the risk rating of the structures. Based on the results of the total risk analysis of the dams, coupled non-linear dynamic numerical analyses of the dam sections are performed using acceleration time history record of the Bhuj (India) earthquake as well as five other major earthquakes recorded worldwide. The objective of doing so is to perform the numerical analysis of the dams for the range of amplitude, frequency content and time duration of input motions. The deformations calculated from the numerical analyses are also compared with other approaches available in literature, viz, Makdisi and Seed (1978) approach, Jansen's approach (1990), Swaisgood's method (1995), Bureau's method (1997). Singh et al. approach (2007), and Saygili and Rathje approach (2008) and the results are utilized to foresee the stability of dams in future earthquake scenario. (C) 2010 Elsevier B.V. All rights reserved.

Two-mode quantum systems: Invariant classification of squeezing transformations and squeezed states

A general analysis of squeezing transformations for two-mode systems is given based on the four-dimensional real symplectic group Sp(4, R). Within the framework of the unitary (metaplectic) representation of this group, a distinction between compact photon-number-conserving and noncompact photon-number-nonconserving squeezing transformations is made. We exploit the U(2) invariant squeezing criterion to divide the set of all squeezing transformations into a two-parameter family of distinct equivalence classes with representative elements chosen for each class. Familiar two-mode squeezing transformations in the literature are recognized in our framework and seen to form a set of measure zero. Examples of squeezed coherent and thermal states are worked out. The need to extend the heterodyne detection scheme to encompass all of U(2) is emphasized, and known experimental situations where all U(2) elements can be reproduced are briefly described.

Fourteen gene GBM prognostic signature identifies association of immune response pathway and mesenchymal subtype with high risk group

Background: Recent research on glioblastoma (GBM) has focused on deducing gene signatures predicting prognosis. The present study evaluated the mRNA expression of selected genes and correlated with outcome to arrive at a prognostic gene signature. Methods: Patients with GBM (n = 123) were prospectively recruited, treated with a uniform protocol and followed up. Expression of 175 genes in GBM tissue was determined using qRT-PCR. A supervised principal component analysis followed by derivation of gene signature was performed. Independent validation of the signature was done using TCGA data. Gene Ontology and KEGG pathway analysis was carried out among patients from TCGA cohort. Results: A 14 gene signature was identified that predicted outcome in GBM. A weighted gene (WG) score was found to be an independent predictor of survival in multivariate analysis in the present cohort (HR = 2.507; B = 0.919; p < 0.001) and in TCGA cohort. Risk stratification by standardized WG score classified patients into low and high risk predicting survival both in our cohort (p = <0.001) and TCGA cohort (p = 0.001). Pathway analysis using the most differentially regulated genes (n = 76) between the low and high risk groups revealed association of activated inflammatory/immune response pathways and mesenchymal subtype in the high risk group. Conclusion: We have identified a 14 gene expression signature that can predict survival in GBM patients. A network analysis revealed activation of inflammatory response pathway specifically in high risk group. These findings may have implications in understanding of gliomagenesis, development of targeted therapies and selection of high risk cancer patients for alternate adjuvant therapies.

Markov Switching Risk Premium and the term structure of interest rates. Empirical evidence from US post-war interest rates

This paper considers the basic present value model of interest rates under rational expectations with two additional features. First, following McCallum (1994), the model assumes a policy reaction function where changes in the short-term interest rate are determined by the long-short spread. Second, the short-term interest rate and the risk premium processes are characterized by a Markov regime-switching model. Using US post-war interest rate data, this paper finds evidence that a two-regime switching model fits the data better than the basic model. The estimation results also show the presence of two alternative states displaying quite different features.

Ten Years of the Relative Risk Model and Regional Scale Ecological Risk Assessment

It has been 10 years since the publication of the relative risk model (RRM) for regional scale ecological risk assessment. The approach has since been used successfully for a variety of freshwater, marine, and terrestrial environments in North America, South America, and Australia. During this period the types of stressors have been expanded to include more than contaminants. Invasive species, habitat loss, stream alteration and blockage, temperature, change in land use, and climate have been incorporated into the assessments. Major developments in the RRM have included the extensive use of geographical information systems, uncertainty analysis using Monte Carlo techniques, and its application to retrospective assessments to determine causation. The future uses of the RRM include assessments for forestry and conservation management, an increasing use in invasive species evaluation, and in sustainability. Developments in risk communication, the use of Bayesian approaches, and in uncertainty analyses are on the horizon.

An investigation of implicit measurement techniques amongst low risk and forensic samples

There are difficulties with utilising self- report and physiological measures of assessment amongst forensic populations. This study investigates implicit based measures amongst sexual offenders, nonsexual offenders and low risk samples. Implicit measurement is a term applied to measurement methods that makes it difficult to influence responses through conscious control. The test battery includes the Implicit Association Test (IAT), Rapid Serial Visual Presentation (RSVP), Viewing Time (VT) and the Structured Clinical interview for disorders. The IAT proposes that people will perform better on a task when they depend on well-practiced cognitive associations. The RSVP task requires participants to identify a single target image that is presented amongst a series of rapidly presented visual images. RSVP operates on the premise that if two target images are presented within 500milliseconds of each other, the possibility that the participant will recognize the second target is significantly reduced when the first target is of salience to the individual. This is the attentional blink phenomenon. VT is based on the principle that people will look longer at images that are of salience. Results showed that on the VT task, child sexual offenders took longer to view images of children than low risk groups. Nude over clothed images induced a greater attentional blink amongst low risk and offending samples on the RSVP task. Sexual offenders took longer than low risk groups on word pairing tasks where sexual words were paired with adult words on the IAT. The SCID highlighted differences between the offending and non offending groups on the sub scales for personality disorders. More erotic stimulus items on the VT and RSVP measures is recommended to better differentiate sexual preference between offending and non offending samples. A pictorial IAT is recommended. Findings provide the basis for further development of implicit measures within the assessment of sexual offenders.

Gender differences in the risk of HIV infection among persons reporting abstinence, monogamy, and multiple sexual partners in northern Tanzania.

BACKGROUND: Monogamy, together with abstinence, partner reduction, and condom use, is widely advocated as a key behavioral strategy to prevent HIV infection in sub-Saharan Africa. We examined the association between the number of sexual partners and the risk of HIV seropositivity among men and women presenting for HIV voluntary counseling and testing (VCT) in northern Tanzania. METHODOLOGY/ PRINCIPAL FINDINGS: Clients presenting for HIV VCT at a community-based AIDS service organization in Moshi, Tanzania were surveyed between November 2003 and December 2007. Data on sociodemographic characteristics, reasons for testing, sexual behaviors, and symptoms were collected. Men and women were categorized by number of lifetime sexual partners, and rates of seropositivity were reported by category. Factors associated with HIV seropositivity among monogamous males and females were identified by a multivariate logistic regression model. Of 6,549 clients, 3,607 (55%) were female, and the median age was 30 years (IQR 24-40). 939 (25%) females and 293 (10%) males (p<0.0001) were HIV seropositive. Among 1,244 (34%) monogamous females and 423 (14%) monogamous males, the risk of HIV infection was 19% and 4%, respectively (p<0.0001). The risk increased monotonically with additional partners up to 45% (p<0.001) and 15% (p<0.001) for women and men, respectively with 5 or more partners. In multivariate analysis, HIV seropositivity among monogamous women was most strongly associated with age (p<0.0001), lower education (p<0.004), and reporting a partner with other partners (p = 0.015). Only age was a significant risk factor for monogamous men (p = 0.0004). INTERPRETATION: Among women presenting for VCT, the number of partners is strongly associated with rates of seropositivity; however, even women reporting lifetime monogamy have a high risk for HIV infection. Partner reduction should be coupled with efforts to place tools in the hands of sexually active women to reduce their risk of contracting HIV.

Association of a peripheral blood metabolic profile with coronary artery disease and risk of subsequent cardiovascular events.

BACKGROUND: Molecular tools may provide insight into cardiovascular risk. We assessed whether metabolites discriminate coronary artery disease (CAD) and predict risk of cardiovascular events. METHODS AND RESULTS: We performed mass-spectrometry-based profiling of 69 metabolites in subjects from the CATHGEN biorepository. To evaluate discriminative capabilities of metabolites for CAD, 2 groups were profiled: 174 CAD cases and 174 sex/race-matched controls ("initial"), and 140 CAD cases and 140 controls ("replication"). To evaluate the capability of metabolites to predict cardiovascular events, cases were combined ("event" group); of these, 74 experienced death/myocardial infarction during follow-up. A third independent group was profiled ("event-replication" group; n=63 cases with cardiovascular events, 66 controls). Analysis included principal-components analysis, linear regression, and Cox proportional hazards. Two principal components analysis-derived factors were associated with CAD: 1 comprising branched-chain amino acid metabolites (factor 4, initial P=0.002, replication P=0.01), and 1 comprising urea cycle metabolites (factor 9, initial P=0.0004, replication P=0.01). In multivariable regression, these factors were independently associated with CAD in initial (factor 4, odds ratio [OR], 1.36; 95% CI, 1.06 to 1.74; P=0.02; factor 9, OR, 0.67; 95% CI, 0.52 to 0.87; P=0.003) and replication (factor 4, OR, 1.43; 95% CI, 1.07 to 1.91; P=0.02; factor 9, OR, 0.66; 95% CI, 0.48 to 0.91; P=0.01) groups. A factor composed of dicarboxylacylcarnitines predicted death/myocardial infarction (event group hazard ratio 2.17; 95% CI, 1.23 to 3.84; P=0.007) and was associated with cardiovascular events in the event-replication group (OR, 1.52; 95% CI, 1.08 to 2.14; P=0.01). CONCLUSIONS: Metabolite profiles are associated with CAD and subsequent cardiovascular events.

Associations between Intake of Folate, Methionine, and Vitamins B-12, B-6 and Prostate Cancer Risk in American Veterans.

Prostate cancer (PC) is the second leading cause of cancer death in men. Recent reports suggest that excess of nutrients involved in the one-carbon metabolism pathway increases PC risk; however, empirical data are lacking. Veteran American men (272 controls and 144 PC cases) who attended the Durham Veteran American Medical Center between 2004-2009 were enrolled into a case-control study. Intake of folate, vitamin B12, B6, and methionine were measured using a food frequency questionnaire. Regression models were used to evaluate the association among one-carbon cycle nutrients, MTHFR genetic variants, and prostate cancer. Higher dietary methionine intake was associated with PC risk (OR = 2.1; 95%CI 1.1-3.9) The risk was most pronounced in men with Gleason sum <7 (OR = 2.75; 95%CI 1.32- 5.73). The association of higher methionine intake and PC risk was only apparent in men who carried at least one MTHFR A1298C allele (OR = 6.7; 95%CI = 1.6-27.8), compared to MTHFR A1298A noncarrier men (OR = 0.9; 95%CI = 0.24-3.92) (p-interaction = 0.045). There was no evidence for associations between B vitamins (folate, B12, and B6) and PC risk. Our results suggest that carrying the MTHFR A1298C variants modifies the association between high methionine intake and PC risk. Larger studies are required to validate these findings.