DO FOREIGN CURRENCY DEPOSITS PROMOTE OR DETER FINANCIAL INTERMEDIARY DEVELOPMENT IN LOW‐INCOME COUNTRIES? AN EMPIRICAL ANALYSIS OF CROSS‐COUNTRY DATA

Foreign currency deposits (FCD) are prevalent in many low‐income developing countries, but their impact on bank lending has rarely been examined. An examination of cross‐country data indicates that a higher proportion of FCD in total deposits is associated with more private credit only in inflationary circumstances. FCD can lead to a decline in private credit below a certain threshold level of inflation. Given that FCD exhibit persistence, deregulating them in low‐income countries could cause more harm than good to financial intermediary development in the long term.     

Assessing the contribution of flagship projects to city image change: a quasi‐experimental technique

The aim of this paper is to identify a simple technique that can be used to indicate whether flagship urban projects contribute to city image change. The quasi‐experiment outlined is grounded in established marketing efficacy measures and involves establishing the relationship between awareness levels of projects and image change. After an explanation of the proposed technique, it is applied to projects in Birmingham, Manchester and Sheffield to demonstrate its potential value. Despite raising some concerns, the paper concludes that the technique provides a useful indicator of the effects of flagship projects, particularly when longitudinal research is not possible. Copyright © 2006 John Wiley & Sons, Ltd.     

THE YEN‐DOLLAR EXCHANGE RATE AND MALAYSIAN MACROECONOMIC DYNAMICS

This paper empirically assesses the effect of the yen‐dollar exchange rate on selected macroeconomic variables, namely, real output, price level, and money supply, for Malaysia. The results, which are based on a vector autoregressive framework, suggest that variations in the yen‐dollar rate can have significant influences on Malaysia's macroeconomic variables. More specifically, the yen‐dollar depreciation leads to contraction in real GDP and money supply. These results are fairly robust to alternative model specifications. We believe that, apart from providing important insights into the interactions between the yen‐dollar rate and domestic macroeconomic variables, our results contribute to the debate on choice of exchange rate regimes for Malaysia.     

Cost of skeletal-related events in European patients with solid tumours and bone metastases: data from a prospective multinational observational study

Abstract

Objectives:

Patients with bone metastases often experience skeletal-related events (SREs: radiation or surgery to bone, pathologic fracture, and spinal cord compression). This study examined health resource utilization and costs associated with SREs.

Methods:

Data presented are from the European cohort (Germany, Italy, Spain, and the UK) of patients with solid tumours enrolled in a multi-national, prospective, observational study in patients with solid tumours or multiple myeloma. Patients with Eastern Cooperative Oncology Group score 0–2 and life expectancy ≥6 months, who experienced an SRE up to 97 days before enrolment, were eligible. Health resource utilization associated with SREs (including number/length of inpatient stays, numbers of procedures and outpatient visits) were collected through chart review for up to 97 days before enrolment and prospectively during follow-up. Country-specific cost calculations were performed.

Results:

In total, 478 eligible patients contributed 893 SREs to this analysis. Radiation to bone occurred most frequently (66% of total). Spinal cord compression (7%) and surgery to bone (10%) were the least common events, but most likely to require inpatient stays. The most costly SREs were also spinal cord compression (mean per SRE across countries, €4884–€12,082) and surgery to bone (€3348–€9407). Inpatient stays were the main cost drivers.

Limitations:

Health resource utilization used to calculate the costs associated with SREs may have been under-estimated as a result of exclusion of patients with low performance status or life expectancy; unavailable information and exclusion of resource consumption associated with pain. Thus, the estimate of associated costs is likely to be conservative.

Conclusions:

SREs result in considerable health resource utilization, imposing a substantial financial burden driven by inpatient stays. Treatments that prevent/delay SREs may help ease this burden, thereby providing cost savings across European healthcare systems.     

浅论水利与水产

本文在正确认识水利和水产关系的基础丰,提出安徽省桐城市水利和水产两部门之间的一些问题和相应对策。     

Optimal adaptation strategies to face shocks on groundwater resources

We consider an exogenous and reversible shock to a groundwater resource, namely a decrease in the recharge rate of the aquifer. We compare optimal extraction paths and the social costs of optimal adaptation in two cases: under certainty, i.e. when the date of occurrence of the shock is known, and under uncertainty, when the date of occurrence of the shock is a random variable. We show that an increase in uncertainty leads to a decrease in precautionary behavior in the short run and to an increase in precautionary behavior in the long run. We apply our model to the particular case of the Western la Mancha aquifer in Spain. We show that, in this context, it is advantageous for the water agency to acquire information on the date of the shock, especially for high-intensity and intermediate-risk events.     

Does Accrual Management Impair the Performance of Earnings‐Based Valuation Models?

This study examines how accrual manipulations affect firm valuation in the years surrounding the passage of the Sarbanes‐Oxley Act (SOX). We compare the absolute percentage pricing errors of RIM and DCF valuation models for a group of US firms suspected to have engaged in accrual manipulations to avoid a small loss or a small earnings decline vs. ‘Normal’ firms matched on industry, year and size. We find that RIM can better estimate intrinsic value than DCF for the matched Normal firms in the pre‐SOX period, but not so for accrual manipulators, and that SOX mitigates the harmful effect of accrual manipulations, completely eliminating the difference in RIM's accuracy advantage over DCF between Normal firms and accrual manipulators. As a further analysis, we redefine Suspect firms as real‐activity manipulators and find a significant across‐group difference in accuracy wedge in both sample periods, implying that SOX has prompted firms to favor real‐activity manipulations over accrual manipulations.     

Corporate Stock and Bond Return Correlations and Dynamic Adjustments of Capital Structure

This paper analyses the effects of dynamic correlations between stock and bond returns issued by the same firm on the speed of adjustment towards target leverage. The results show that the estimated correlations are time varying, show persistence and differ among firms. Analysis of the potential explanatory variables reveals that the correlations decrease with negative expectations about future aggregate risks, but only for firms with a low default probability. In contrast, correlations are positively associated with specific risk measures, especially idiosyncratic stock risk and financial leverage. The positive relationship between the correlations and the leverage ratio suggests that target leverage can be achieved faster when the stock–bond correlation is high. Our results show that this is the case.     

Institutional Monitoring: Evidence from the F‐Score

The extant literature shows that institutional investors engage in corporate governance to enhance a firm's long‐term value. Measuring firm performance using the F‐Score, we examine the persistent monitoring role of institutional investors and identify the financial aspects of a firm that institutional monitoring improves. We find strong evidence that long‐term institutions with large shareholdings consistently improve a firm's F‐Score and that such activity occurs primarily through the enhancement of the firm's operating efficiency. Other institutions reduce a firm's F‐Score. Moreover, we find evidence that, while monitoring institutions improve a firm's financial health, transient (followed by non‐transient) institutions trade on this information.