Corporate governance mechanisms and earnings management in transitional countries – evidence from Chinese listed firms

The objective of this thesis is to investigate whether the corporate governance practices adopted by Chinese listed firms are associated with the quality of earnings information. Based on a review of agency and institutional theory, this study develops hypotheses that predict the monitoring effectiveness of the board and the audit committee. Using a combination of univariate and multivariate analyses, the association between corporate governance mechanisms and earnings management are tested from 2004 to 2008. Through analysing the empirical results, a number of findings are summarised as below. First, board independence is weakened by the introduction of government officials as independent directors on the boards. Government officials acting as independent directors, claim that they meet the definition of independent director set by the regulation. However, they have some connection with the State, which is the controlling shareholder in listed SOEs affiliated companies. Consequently, the effect of the independent director’s expertise in constraining earnings management is mitigated as demonstrated by an insignificant association between board expertise and earnings management. An alternative explanation for the inefficiency of board independence may point to the pre-selection of independent directors by the powerful CEO. It is argued that a CEO can manipulate the board composition and choose the "desirable" independent directors to monitor themselves. Second, a number of internal mechanisms, such as board size, board activities, and the separation of the roles of the CEO and chair are found to be significantly associated with discretionary accruals. This result suggests that there are advantages in having a large and active board in the Chinese setting. This can offset the disadvantages associated with large boards, such as increased bureaucracy, and hence, increase the constraining effects of a large and resourceful board. Third, factor analysis identifies two factors: CEO power and board power. CEO power is the factor which consists of CEO duality and turnover, and board power is composed of board size and board activity. The results of CEO power show that if a Chinese listed company has CEO duality and turnover at the same time, it is more likely to have a high level of earnings management. The significant and negative relationship between board power and accruals indicate that large boards with frequent meetings can be associated with low level of earnings management. Overall, the factor analysis suggests that certain governance mechanisms complement each other to become more efficient monitors of opportunistic earnings management. A combination of board characteristics can increase the negative association with earnings management. Fourth, the insignificant results between audit committees and earnings management in Chinese listed firms suggests that the Chinese regulator should strengthen the audit committee functions. This thesis calls for listed firms to disclose more information on audit committee composition and activities, which can facilitate future research on the Chinese audit committee’s monitoring role. Fifth, the interactive results between State ownership and board characteristics show that dominant State ownership has a moderating effect on board monitoring power as the State totally controls 42% of the issued shares. The high percentage of State ownership makes it difficult for the non-controlling institutional shareholders to challenge the State’s dominant status. As a result, the association between non-controlling institutional ownership and earnings management is insignificant in most situations. Lastly, firms audited by the international Big4 have lower abnormal accruals than firms audited by domestic Chinese audit firms. In addition, the inverse U-shape relationship between audit tenure and earnings quality demonstrates the changing effects of audit quality after a certain period of appointment. Furthermore, this thesis finds that listing in Hong Kong Stock Exchanges can be an alternative governance mechanism to discipline Chinese firms to follow strict Hong Kong listing requirements. Management of Hong Kong listed companies are exposed to the scrutiny of international investors and Hong Kong regulators. This in turn reduces their chances of conducting self-interested earnings manipulation. This study is designed to fill the gap in governance literature in China that is related to earnings management. Previous research on corporate governance mechanisms and earnings management in China is not conclusive. The current research builds on previous literature and provides some meaningful implications for practitioners, regulators, academic, and international investors who have investment interests in a transitional country. The findings of this study contribute to corporate governance and earnings management literature in the context of the transitional economy of China. The use of alternative measures for earnings management yields similar results compared with the accruals models and produces additional findings.

LMP estimation considering the uncertainty of wind power

One of the impediments to large-scale use of wind generation within power system is its variable and uncertain real-time availability. Due to the low marginal cost of wind power, its output will change the merit order of power markets and influence the Locational Marginal Price (LMP). For the large scale of wind power, LMP calculation can't ignore the essential variable and uncertain nature of wind power. This paper proposes an algorithm to estimate LMP. The estimation result of conventional Monte Carlo simulation is taken as benchmark to examine accuracy. Case study is conducted on a simplified SE Australian power system, and the simulation results show the feasibility of proposed method.

Toward automated power line corridor monitoring using advanced aircraft control and multisource feature fusion

The conventional manual power line corridor inspection processes that are used by most energy utilities are labor-intensive, time consuming and expensive. Remote sensing technologies represent an attractive and cost-effective alternative approach to these monitoring activities. This paper presents a comprehensive investigation into automated remote sensing based power line corridor monitoring, focusing on recent innovations in the area of increased automation of fixed-wing platforms for aerial data collection, and automated data processing for object recognition using a feature fusion process. Airborne automation is achieved by using a novel approach that provides improved lateral control for tracking corridors and automatic real-time dynamic turning for flying between corridor segments, we call this approach PTAGS. Improved object recognition is achieved by fusing information from multi-sensor (LiDAR and imagery) data and multiple visual feature descriptors (color and texture). The results from our experiments and field survey illustrate the effectiveness of the proposed aircraft control and feature fusion approaches.

The acute adaptations of normal and pathological human Achilles tendons to eccentric and concentric exercise

Eccentric exercise is the conservative treatment of choice for mid-portion Achilles tendinopathy. While there is a growing body of evidence supporting the medium to long term efficacy of eccentric exercise in Achilles tendinopathy treatment, very few studies have investigated the short term response of the tendon to eccentric exercise. Moreover, the mechanisms through which tendinopathy symptom resolution occurs remain to be established. The primary purpose of this thesis was to investigate the acute adaptations of the Achilles tendon to, and the biomechanical characteristics of, the eccentric exercise protocol used for Achilles tendinopathy rehabilitation and a concentric equivalent. The research was conducted with an orientation towards exploring potential mechanisms through which eccentric exercise may bring about a resolution of tendinopathy symptoms. Specifically, the morphology of tendinopathic and normal Achilles tendons was monitored using high resolution sonography prior to and following eccentric and concentric exercise, to facilitate comparison between the treatment of choice and a similar alternative. To date, the only proposed mechanism through which eccentric exercise is thought to result in symptom resolution is the increased variability in motor output force observed during eccentric exercise. This thesis expanded upon prior work by investigating the variability in motor output force recorded during eccentric and concentric exercises, when performed at two different knee joint angles, by limbs with and without symptomatic tendinopathy. The methodological phase of the research focused on establishing the reliability of measures of tendon thickness, tendon echogenicity, electromyography (EMG) of the Triceps Surae and the standard deviation (SD) and power spectral density (PSD) of the vertical ground reaction force (VGRF). These analyses facilitated comparison between the error in the measurements and experimental differences identified as statistically significant, so that the importance and meaning of the experimental differences could be established. One potential limitation of monitoring the morphological response of the Achilles tendon to exercise loading is that the Achilles tendon is continually exposed to additional loading as participants complete the walking required to carry out their necessary daily tasks. The specific purpose of the last experiment in the methodological phase was to evaluate the effect of incidental walking activity on Achilles tendon morphology. The results of this study indicated that walking activity could decrease Achilles tendon thickness (negative diametral strain) and that the decrease in thickness was dependent on both the amount of walking completed and the proximity of walking activity to the sonographic examination. Thus, incidental walking activity was identified as a potentially confounding factor for future experiments which endeavoured to monitor changes in tendon thickness with exercise loading. In the experimental phase of this thesis the thickness of Achilles tendons was monitored prior to and following isolated eccentric and concentric exercise. The initial pilot study demonstrated that eccentric exercise resulted in a greater acute decrease in Achilles tendon thickness (greater diametral strain) compared to an equivalent concentric exercise, in participants with no history of Achilles tendon pain. This experiment was then expanded to incorporate participants with unilateral Achilles tendinopathy. The major finding of this experiment was that the acute decrease in Achilles tendon thickness observed following eccentric exercise was modified by the presence of tendinopathy, with a smaller decrease (less diametral strain) noted for tendinopathic compared to healthy control tendon. Based on in vitro evidence a decrease in tendon thickness is believed to reflect extrusion of fluid from the tendon with loading. This process would appear to be limited by the presence of pathology and is hypothesised to be a result of the changes in tendon structure associated with tendinopathy. Load induced fluid movement may be important to the maintenance of tendon homeostasis and structure as it has the potential to enhance molecular movement and stimulate tendon remodelling. On this basis eccentric exercise may be more beneficial to the tendon than concentric exercise. Finally, EMG and motor output force variability (SD and PSD of VGRF) were investigated while participants with and without tendinopathy performed the eccentric and concentric exercises. Although between condition differences were identified as statistically significant for a number of force variability parameters, the differences were not greater than the limits of agreement for repeated measures. Consequently the meaning and importance of these findings were questioned. Interestingly, the EMG amplitude of all three Triceps Surae muscles did not vary with knee joint angle during the performance of eccentric exercise. This raises questions pertaining to the functional importance of performing the eccentric exercise protocol at each of the two knee joint angles as it is currently prescribed. EMG amplitude was significantly greater during concentric compared to eccentric muscle actions. Differences in the muscle activation patterns may result in different stress distributions within the tendon and be related to the different diametral strain responses observed for eccentric and concentric muscle actions.

Traction power system simulation in electrified railways

Electricity has been the major source of power in most railway systems. Reliable, efficient and safe power distribution to the trains is vitally important to the overall quality of railway service. Like any large-scale engineering system, design, operation and planning of traction power systems rely heavily on computer simulation. This paper reviews the major features on modelling and the general practices for traction power system simulation; and introduces the development of the latest simulation approach with discussions on simulation results and practical applications. Remarks will also be given on the future challenges on traction power system simulation.

Melanoma cell invasiveness is regulated by miR-211 suppression of the BRN2 transcription factor

To identify microRNAs potentially involved in melanomagenesis, we compared microRNA expression profiles between melanoma cell lines and cultured melanocytes. The most differentially expressed microRNA between the normal and tumor cell lines was miR-211. We focused on this pigment-cell-enriched miRNA as it is derived from the microphthalmia-associated transcription factor (MITF)-regulated gene, TRPM1 (melastatin). We find that miR-211 expression is greatly decreased in melanoma cells and melanoblasts compared to melanocytes. Bioinformatic analysis identified a large number of potential targets of miR-211, including POU3F2 (BRN2). Inhibition of miR-211 in normal melanocytes resulted in increased BRN2 protein, indicating that endogenous miR-211 represses BRN2 in differentiated cells. Over-expression of miR-211 in melanoma cell lines changed the invasive potential of the cells in vitro through directly targeting BRN2 translation. We propose a model for the apparent non-overlapping expression levels of BRN2 and MITF in melanoma, mediated by miR-211 expression.

Government community service contracts : restraining abuse of power

The use of grant contracts to deliver community services is now a significant feature of all Australian government administrations. These contracts are the primary instrument governing the provision of such services to citizens and are largely outside the usual parliamentary review mechanisms and constraints. This article examines the extent of the erosion of fundamental constitutional principles facilitated by the use of private contracts, by applying the principles used in scrutiny of delegated legislation to standard form federal and State community service contracts. It reveals extensive executive power which, if the relationship were founded in legislative instruments rather than in private contract, would have to be justified to Parliament at least and possibly not tolerated.

Evidence for CRHR1 in multiple sclerosis using supervised machine learning and meta-analysis in 12 566 individuals

The primary genetic risk factor in multiple sclerosis (MS) is the HLA-DRB1*1501 allele; however, much of the remaining genetic contribution to MS has yet to be elucidated. Several lines of evidence support a role for neuroendocrine system involvement in autoimmunity which may, in part, be genetically determined. Here, we comprehensively investigated variation within eight candidate hypothalamic-pituitary-adrenal (HPA) axis genes and susceptibility to MS. A total of 326 SNPs were investigated in a discovery dataset of 1343 MS cases and 1379 healthy controls of European ancestry using a multi-analytical strategy. Random Forests, a supervised machine-learning algorithm, identified eight intronic SNPs within the corticotrophin-releasing hormone receptor 1 or CRHR1 locus on 17q21.31 as important predictors of MS. On the basis of univariate analyses, six CRHR1 variants were associated with decreased risk for disease following a conservative correction for multiple tests. Independent replication was observed for CRHR1 in a large meta-analysis comprising 2624 MS cases and 7220 healthy controls of European ancestry. Results from a combined meta-analysis of all 3967 MS cases and 8599 controls provide strong evidence for the involvement of CRHR1 in MS. The strongest association was observed for rs242936 (OR = 0.82, 95% CI = 0.74-0.90, P = 9.7 × 10-5). Replicated CRHR1 variants appear to exist on a single associated haplotype. Further investigation of mechanisms involved in HPA axis regulation and response to stress in MS pathogenesis is warranted. © The Author 2010. Published by Oxford University Press. All rights reserved.

Cabergoline Decreases Alcohol Drinking and Seeking Behaviors Via Glial Cell Line-Derived Neurotrophic Factor

Background: Cabergoline is an ergotamine derivative that increases the expression of glial cell line-derived neurotrophic factor (GDNF) in vitro. We recently showed that GDNF in the ventral tegmental area (VTA) reduces the motivation to consume alcohol. We therefore set out to determine whether cabergoline administration decreases alcohol-drinking and -seeking behaviors via GDNF. Methods: Reverse transcription polymerase chain reaction (RT-PCR) and Enzyme-Linked ImmunoSorbent Assay (ELISA) were used to measure GDNF levels. Western blot analysis was used for phosphorylation experiments. Operant self-administration in rats and a two-bottle choice procedure in mice were used to assess alcohol-drinking behaviors. Instrumental performance tested during extinction was used to measure alcohol-seeking behavior. The [35S]GTPγS binding assay was used to assess the expression and function of the dopamine D2 receptor (D2R). Results: We found that treatment of the dopaminergic-like cell line SH-SY5Y with cabergoline and systemic administration of cabergoline in rats resulted in an increase in GDNF level and in the activation of the GDNF pathway. Cabergoline treatment decreased alcohol-drinking and -seeking behaviors including relapse, and its action to reduce alcohol consumption was localized to the VTA. Finally, the increase in GDNF expression and the decrease in alcohol consumption by cabergoline were abolished in GDNF heterozygous knockout mice. Conclusions: Together, these findings suggest that cabergoline-mediated upregulation of the GDNF pathway attenuates alcohol-drinking behaviors and relapse. Alcohol abuse and addiction are devastating and costly problems worldwide. This study puts forward the possibility that cabergoline might be an effective treatment for these disorders. © 2009 Society of Biological Psychiatry.

A fibrocontractive mechanochemical model of dermal wound closure incorporating realistic growth factor kinetics

Fibroblasts and their activated phenotype, myofibroblasts, are the primary cell types involved in the contraction associated with dermal wound healing. Recent experimental evidence indicates that the transformation from fibroblasts to myofibroblasts involves two distinct processes: the cells are stimulated to change phenotype by the combined actions of transforming growth factor β (TGFβ) and mechanical tension. This observation indicates a need for a detailed exploration of the effect of the strong interactions between the mechanical changes and growth factors in dermal wound healing. We review the experimental findings in detail and develop a model of dermal wound healing that incorporates these phenomena. Our model includes the interactions between TGFβ and collagenase, providing a more biologically realistic form for the growth factor kinetics than those included in previous mechanochemical descriptions. A comparison is made between the model predictions and experimental data on human dermal wound healing and all the essential features are well matched.

Cultural chaos : Journalism, News and Power in a Globalised World

With examples drawn from media coverage of the War on Terror, the 2003 invasion of Iraq, Hurricane Katrina and the London underground bombings, Cultural Chaos explores the changing relationship between journalism and power in an increasingly globalised news culture. In this new text, Brian McNair examines the processes of cultural, geographic and political dissolution in the post-Cold War era and the rapid evolution of information and communication technologies. He investigates the impact of these trends on domestic and international journalism and on political processes in democratic and authoritarian societies across the world. Written in a lively and accessible style, Cultural Chaos provides students with an overview of the evolution of the sociology of journalism, a critical review of current thinking within media studies and an argument for a revision and renewal of the paradigms that have dominated the field since the early twentieth century. Separate chapters are devoted to new developments such as the rise of the blogosphere and satellite television news and their impact on journalism more generally. Cultural Chaos will be essential reading for all those interested in the emerging globalised news culture of the twenty-first century.

Evaluation cortical bone elasticity in response to pulse power excitation using ultrasonic technique

This paper presents the ultrasonic velocity measurement method which investigates the possible effects of high voltage high frequency pulsed power on cortical bone material elasticity. Before applying a pulsed power signal on a live bone, it is essential to determine the safe parameters of pulsed power applied on bone non-destructively. Therefore, the possible changes in cortical bone material elasticity due to a specified pulsed power excitation have been investigated. A controllable positive buck-boost converter with adjustable output voltage and frequency has been used to generate high voltage pulses (500V magnitude at 10 KHz frequency). To determine bone elasticity, an ultrasonic velocity measurement has been conducted on two groups of control (unexposed to pulse power but in the same environmental condition) and cortical bone samples exposed to pulsed power. Young’s modulus of cortical bone samples have been determined and compared before and after applying the pulsed power signal. After applying the high voltage pulses, no significant variation in elastic property of cortical bone specimens was found compared to the control. The result shows that pulsed power with nominated parameters can be applied on cortical bone tissue without any considerable negative effect on elasticity of bone material.