Business life cycle and capital structure: evidence from Chinese manufacturing firms

This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important for policy-makers to ensure that products and financial markets are well-balanced.

Learning to lead for business growth – implications for supporting SMEs in Wales

The Welsh private and third sectors are heavily dependent on SMEs. Consequently the performance of SMEs is critical to the performance of the Welsh economy. Substantial public funds, particularly from European Structural Funds, have been allocated to support these since 2000. The majority of programmes thus funded have been led from within the Welsh Government. This paper reports interim evaluation findings from one intervention led by two Welsh higher education institutions (HEIs), namely the LEAD Wales programme. The programme is an extended intervention to support the leadership skills of owner-managers and incorporates a range of learning methods, including formal masterclasses, but emphasizes situated and experiential learning through action learning, coaching and peer-to-peer exchange exercises. The programme’s impact is assessed on the experiences of 325 participants, of whom 217 have completed the programme. The paper concludes that situated learning methods, through which participants are able to draw from shared history and experience over an extended period are critical to programme success. By contrast, short-term thematic teaching, based around more formal, hierarchical learning is less likely to yield significant and sustainable economic benefits. The implications of this for business support in Wales are discussed.

The financial and environmental performance of firms exposed to the EU Emissions Trading Scheme

This thesis is an empirical-based study of the European Union’s Emissions Trading Scheme (EU ETS) and its implications in terms of corporate environmental and financial performance. The novelty of this study includes the extended scope of the data coverage, as most previous studies have examined only the power sector. The use of verified emissions data of ETS-regulated firms as the environmental compliance measure and as the potential differentiating criteria that concern the valuation of EU ETS-exposed firms in the stock market is also an original aspect of this study. The study begins in Chapter 2 by introducing the background information on the emission trading system (ETS), which focuses on (i) the adoption of ETS as an environmental management instrument and (ii) the adoption of ETS by the European Union as one of its central climate policies. Chapter 3 surveys four databases that provide carbon emissions data in order to determine the most suitable source of the data to be used in the later empirical chapters. The first empirical chapter, which is also Chapter 4 of this thesis, investigates the determinants of the emissions compliance performance of the EU ETS-exposed firms through constructing the best possible performance ratio from verified emissions data and self-configuring models for a panel regression analysis. Chapter 5 examines the impacts on the EU ETS-exposed firms in terms of their equity valuation with customised portfolios and multi-factor market models. The research design takes into account the emissions allowance (EUA) price as an additional factor, as it has the most direct association with the EU ETS to control for the exposure. The final empirical Chapter 6 takes the investigation one step further, by specifically testing the degree of ETS exposure facing different sectors with sector-based portfolios and an extended multi-factor market model. The findings from the emissions performance ratio analysis show that the business model of firms significantly influences emissions compliance, as the capital intensity has a positive association with the increasing emissions-to-emissions cap ratio. Furthermore, different sectors show different degrees of sensitivity towards the determining factors. The production factor influences the performance ratio of the Utilities sector, but not the Energy or Materials sectors. The results show that the capital intensity has a more profound influence on the utilities sector than on the materials sector. With regard to the financial performance impact, ETS-exposed firms as aggregate portfolios experienced a substantial underperformance during the 2001–2004 period, but not in the operating period of 2005–2011. The results of the sector-based portfolios show again the differentiating effect of the EU ETS on sectors, as one sector is priced indifferently against its benchmark, three sectors see a constant underperformance, and three sectors have altered outcomes.

Exploring the impact of social axioms on firm reputation: a stakeholder perspective

This study proposes a model of how deeply held beliefs, known as ‘social axioms, moderate the interaction between reputation, its causes and consequences with stakeholders. It contributes to the stakeholder relational field of reputation theory by explaining why the same organizational stimuli lead to different individual stakeholder responses. The study provides a shift in reputation research from organizational-level stimuli as the root causes of stakeholder responses to exploring the interaction between individual beliefs and organizational stimuli in determining reputational consequences. Building on a conceptual model that incorporates product/service quality and social responsibility as key reputational dimensions, the authors test empirically for moderating influences, in the form of social axioms, between reputation-related antecedents and consequences, using component-based structural equation modelling (n = 204). In several model paths, significant differences are found between responses of individuals identified as either high or low on social cynicism, fate control and religiosity. The results suggest that stakeholder responses to reputation-related stimuli can be systematically predicted as a function of the interactions between the deeply held beliefs of individuals and these stimuli. The authors offer recommendations on how strategic reputation management can be approached within and across stakeholder groups at a time when firms grapple with effective management of diverse stakeholder expectations.

Earnings management in firms seeking to be acquired

Empirical evidence regarding accrual-based earnings management around mergers and acquisitions has been setting-specific as far as target firms are concerned. This might be due to the fact that target firms cannot always anticipate an acquisition proposal, and thus lack the motive and the time necessary to manage their earnings in order to facilitate or impede the deal. In this paper, we provide clear evidence of downward earnings management by a sample of target firms that have both time and motive to engage in such actions. These are firms that publicly announce their intention to be acquired. Publicly ‘seeking a buyer’ represents a rather unusual corporate event, and we find that these firms engage in downward earnings management in the years surrounding the ‘announcement year’. To some extent, this result is explained by overrepresentation of low performance and growth among these firms, and it can be interpreted under alternative explanations. Furthermore, we show that such downward earnings management negatively affects the probability for a ‘seeking buyer’ firm to secure an acquisition within a reasonable amount of time, a possible indication of efficient diligence by prospective buyers having a preference for firms ‘seeking buyer’ with no informationally obscure earnings.

Accrual-based and real earnings management before and after IFRS adoption: the case of Greece

Purpose – The purpose of this study is to examine the use of accrual-based vs real earnings management (EM) by Greek firms, before and after the mandatory adoption of International Financial Reporting Standards (IFRS). The research is motivated by the fact that past studies have indicated the existence of significant levels of EM for Greece in particular before IFRS. Design/methodology/approach – Accrual-based earnings management (AEM) is examined by assessing performance-adjusted discretionary accruals, while real earnings management (REM) is defined in terms of abnormal levels of production costs, discretionary expenses, and cash flows from operations, for a three-year period before and after the adoption of IFRS in 2005. Findings – The authors find evidence on a statistically significant shift from AEM to REM after the adoption of IFRS, indicating the replacement of one form of EM with the other. Research limitations/implications – The validity of the results depends on the ability of the empirical models used to efficiently capture the existence of AEM and REM. Practical implications – IFRS adoption aims to improve accounting quality, especially in countries with high need for such an improvement; however, the tendency to substitute one form of EM with another highlights unintended consequences of IFRS adoption, which do not improve the informational content of financial statements if EM continues under different forms. Originality/value – Under the expectation that IFRS adoption should lead to improvements in accounting quality, this study examines whether IFRS actually led to a reduction of EM practices for a country with exceptionally high levels of EM before IFRS, by accounting for all possible forms of EM.

Economic Transformation in Ghana: Where Will the Path Lead?

In the context of the Ghanaian government’s objective of structural transformation with an emphasis on manufacturing, this paper provides a case study of economic transformation in Ghana, exploring patterns of growth, sector transformation, and agglomeration. We document and examine why, despite impressive growth and poverty reduction figures, Ghana’s economy has exhibited less transformation than might be expected for a country that has recently achieved middle-income status. Ghana’s reduced share of agriculture in the economy, unlike many successfully transformed countries in Asia and Latin America, has been filled by services, while manufacturing has stagnated and even declined. Likely causes include weak transformation of the agricultural sector and therefore little development of agro-processing, the emergence of “consumption cities” and consumption-driven growth, upward pressure on the exchange rate, weak production linkages, and a poor environment for private-sector-led manufacturing.

Iron deficiency anaemia and blood lead concentrations in Brazilian children

This study investigated the relationship between iron deficiency/iron deficiency anaemia, assessed by several parameters, and blood lead concentration in children. This cross-sectional study involved 384 Brazilian children, aged 2-11 years, who lived near a lead-manipulating industry. Complete blood counts were obtained by an automated cell counter. Serum iron, total iron binding capacity (TIBC) and ferritin were determined respectively, by colorimetric, turbidimetric methods and chemiluminescence. Blood lead was measured by atomic absorption spectrophotometry. The impact of several parameters for assessment of iron status (haemoglobin, serum iron, TIBC, transferrin saturation, ferritin, red cell indices and red cell distribution width) and variables (gender, age, mother`s education, income, body mass index, iron intake, and distance from home to lead-manipulating industry) on blood lead concentration was determined by multiple linear regression. There were significant negative associations between blood lead and the distance from home to the lead-manipulating industry (P < 0.001), Hb (P = 0.019), and ferritin (P=0.023) (R(2)=0.14). Based on these results, further epidemiological studies are necessary to investigate the impact of interventions like iron supplementation or fortification, as an attempt to decrease blood lead in children. (C) 2011 Royal Society of Tropical Medicine and Hygiene. Published by Elsevier Ltd. All rights reserved.

Study of environmental burden of lead in children using teeth as bioindicator

The south region of Sao Paulo city hosts the Guarapiranga dam, responsible for water supply to 25% of the city population. Their surroundings have been subject to intense and irregular occupation by people from very low socioeconomics classes. Measurements undertaken on sediment and particulate materials in the dam revealed concentrations of lead. copper, zinc and cadmium above internationally accepted limits. Epidemiological and toxicological studies undertaken by the World Health Organization in individuals exhibiting lead concentrations in blood, near or below the maximum recommended (10 mu g dl(-1)), surprisingly revealed that toxic effects are more intense in individuals belonging to low socioeconomics classes. Motivated by these facts, we aimed at the investigation of chronic incorporation of lead. as well as the use of our BIOKINETICS code, which is based on an accepted ICRP biokinetics model for lead, in order to extrapolate the results from teeth to other organs. The focus of our data taking was children from poor families, living in a small, restrict and allegedly contaminated area in Sao Paulo city. Thus, a total of 74 human teeth were collected. The average concentration of lead in teeth of children 5 to 10 years old was determined by means of a high-resolution inductively coupled plasma mass spectrometer (ICP-MS). For standardization of the measurements, an animal bone certified material (H-Animal Bone), from the International Atomic Energy Agency, was analyzed. The amount of lead in children living in the surroundings of the dam, was approximately 40% higher than those from the control region, and the average lead concentration was equal to 1.3 mu g g(-1) approximately. Grouping the results in terms of gender, tooth type and condition, it was concluded that a carious molar of boys is a much more efficient contamination pathway for lead, resulting in concentrations 70% higher than in the control region. We also inferred the average concentrations of lead in other organs of these children, by making use of our BIOKINETIC code. (C) 2008 Elsevier Ltd. All rights reserved.

Opinion dynamics of learning agents: does seeking consensus lead to disagreement?

We study opinion dynamics in a population of interacting adaptive agents voting on a set of issues represented by vectors. We consider agents who can classify issues into one of two categories and can arrive at their opinions using an adaptive algorithm. Adaptation comes from learning and the information for the learning process comes from interacting with other neighboring agents and trying to change the internal state in order to concur with their opinions. The change in the internal state is driven by the information contained in the issue and in the opinion of the other agent. We present results in a simple yet rich context where each agent uses a Boolean perceptron to state their opinion. If the update occurs with information asynchronously exchanged among pairs of agents, then the typical case, if the number of issues is kept small, is the evolution into a society torn by the emergence of factions with extreme opposite beliefs. This occurs even when seeking consensus with agents with opposite opinions. If the number of issues is large, the dynamics becomes trapped, the society does not evolve into factions and a distribution of moderate opinions is observed. The synchronous case is technically simpler and is studied by formulating the problem in terms of differential equations that describe the evolution of order parameters that measure the consensus between pairs of agents. We show that for a large number of issues and unidirectional information flow, global consensus is a fixed point; however, the approach to this consensus is glassy for large societies.

Is the electrochemically-induced crystallization in lead oxifluoroborate glasses indeed an electrode- or/and an electric field-promoted phenomenon?

While evidence of ion reduction at the cathode has been given, proof of anode activity, in order to account completely for the redox-type electrochemical mechanism so far postulated to originate the electric field-induced non-spontaneous crystallization observed in glasses, is still lacking. This study demonstrates that direct contact of both cathode and anode electrodes with the material is mandatory to promote crystal nucleation. The electrochemical process of concern is established here to involve a solid-state process, electrolytic in nature. (C) 2008 Acta Materialia Inc. Published by Elsevier Ltd. All rights reserved.

Evidence of fluoride oxidation for development of the electrochemically-induced crystallization observed in lead oxyfluoroborate glasses

This work reports on a distinct experimental procedure conceived to closely approach the question of development of crystallization in lead oxyfluoroborate glasses in the presence of an electric field. After proposing earlier that this phenomenon should involve occurrence of redox-type electrochemical reactions occurring at the electrodes. it was in fact recently shown that a direct contact of the glasses with both the cathode and anode revealed essential, provided that crystallization did not develop when ions migration to these electrodes became frustrated. The present study demonstrates that. even in Pt,Ag/Glass/YSZ:PbF(2)/Ag,Pt-type electrochemical cells subjected to electric field action, where YSZ:PbF(2) represents composite-like mixtures (formed by Y(2)O(3)-doped ZrO(2) and PbF(2)) placed between the glass and anode. crystallization was observable in given cases. In summary, supported by (micro)structural and electrical characterizations, clear evidence is provided here that, besides Pb(2+) reduction at the cathode, crystallization really involves simultaneous F(-) oxidation at the anode, completing thus the whole redox electrochemical reaction so far postulated. In these cases, F(-) migration to the anode was achievable following PbF(2) percolative-like paths through the YSZ:PbF(2) mixtures. (C) 2010 Elsevier B.V. All rights reserved.

Third-order nonlinearity of Er(3+)-doped lead phosphate glass

The third-order optical susceptibility and dispersion of the linear refractive index of Er(3+)-doped lead phosphate glass were measured in the wavelength range between 400 and 1940 nm by using the spectrally resolved femtosecond Maker fringes technique. The nonlinear refractive index obtained from the third-order susceptibility was found to be five times higher than that of silica, indicating that Er(3+)-doped lead phosphate glass is a potential candidate to be used as the base component for the fabrication of photonic devices. For comparison purposes, the Z-scan technique was also employed to obtain the values of the nonlinear refractive index of Er(3+)-doped lead phosphate glass at several wavelengths, and the values obtained using the two techniques agree to within 15%.

Preparation and structural characterization of rare-earth doped lead lanthanum zirconate titanate ceramics

A new preparation route towards rare-earth (RE) doped polycrystalline lead lanthanum zirconate titanate (PLZT) ceramics (RE = Y(3+), Nd(3+), Yb(3+)), based on the use of doped lanthanum oxide or zirconia, is reported. Structural characterization by X-ray powder diffraction reveals that secondary phase formation can be substantially diminished in comparison to conventional preparation methods. The distribution of the rare-earth dopants was investigated as a function of concentration by static (207)Pb spin echo NMR spectra, using Fourier Transformation of Carr-Purcell-Meiboom-Gill spin echo trains. For the Nd- and Yb-doped materials, the interaction of the (207)Pb nuclei with the unpaired electron spin density results in significant broadening and shifting of the NMR signal, whereas these effects are absent in the diamagnetic Y(3+) doped materials. Based on different concentration dependences of the NMR lineshape parameters, we conclude that the structural role of the Nd(3+) dopants differs significantly from that of Yb(3+). While the Nd(3+) ions appear to be statistically distributed in the PLZT lattice, incorporation of Yb(3+) into PLZT appears to be limited by the appearance of doped cubic zirconia as a secondary phase. (C) 2009 Elsevier Masson SAS. All rights reserved.

Solid state NMR as a new approach for the structural characterization of rare-earth doped lead lanthanum zirconate titanate laser ceramics

To facilitate the design of laser host materials with optimized emission properties, detailed structural information at the atomic level is essential, regarding the local bonding environment of the active ions (distribution over distinct lattice sites) and their extent of local clustering as well as their population distribution over separate micro- or nanophases. The present study explores the potential of solid state NMR spectroscopy to provide such understanding for rare-earth doped lead lanthanum zirconate titanate (PLZT) ceramics. As the NMR signals of the paramagnetic dopant species cannot be observed directly, two complementary approaches are utilized: (1) direct observation of diamagnetic mimics using Sc-45 NMR and (2) study of the paramagnetic interaction of the constituent host lattice nuclei with the rare-earth dopant, using Pb-207 NMR lineshape analysis. Sc-45 MAS NMR spectra of scandium-doped PLZT samples unambiguously reveal scandium to be six-coordinated, suggesting that this rare-earth ion substitutes in the B site. Static Pb-207 spin echo NMR spectra of a series of Tm-doped PLZT samples reveal a clear influence of paramagnetic rare-earth dopant concentration on the NMR lineshape. In the latter case high-fidelity spectra can be obtained by spin echo mapping under systematic incrementation of the excitation frequency, benefiting from the signal-to-noise enhancement afforded by spin echo train Fourier transforms. Consistent with XRD data, the Pb-207 NMR lineshape analysis suggests that statistical incorporation into the PLZT lattice occurs at dopant levels of up to 1 wt.% Tm3+, while at higher levels the solubility limit is reached. (C) 2008 Elsevier Masson SAS. All rights reserved.