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The global financial crisis of 2008 sparked new ideas on pro-cyclical transmission in the financial system. The accounting treatment method of loan loss provisions differs between the accounting st...

This article explores whether the alternative risk-transfer technique in the form of self-insurance can add value to the manufacturers that have self-insured for workers' compensation (WC) losses. The authors focus on publicly-owned manufacturers with at least 1,000 employees in California over the period 1970–2015 to examine the value implications of self-insurance adoption. This study employs a treatment-effects model to simultaneously estimate the determinants of self-insurance and the effect of self-insurance on firm value. The authors find that the relationship between firm value and self-insurance is time dependent. Risk preference for self-insurance reflects in higher market valuation among manufacturers over the periods of 1970–1983 and 1986–1999. These results suggest that self-insurance has a positive impact on firm value in the 1970s through the 1990s except for the liability crisis years 1984–1985. However, the benefits of self-insurance fail to materialize for self-insured manufacturers in the 2000s.

Financial flexibility helps improve firm performance. By using data from Chinese listed companies, we examine whether investment scale or investment efficiency drives the relationship between financial flexibility and firm performance via a special mediator testing method that is widely used in the psychology literature (Baron and Kenny, 1986). We find that financial flexibility has a significant and positive effect on both investment and firm performance. However, investment scale rather than investment efficiency seems to drive firm performance. This finding helps us understand that Chinese companies tend to emphasize investment expansion more than they do investment efficiency to improve firm performance.

type="main" xml:lang="en"> Abstract This article examines the role of information disclosure on bank risk-taking behaviour in China. The study uses a game theory model to analyse the interaction mechanism between bank risk-taking behaviour and its information disclosure under China's partially implicit deposit insurance system. It is found that banks that are more likely to receive a government bailout when they are in trouble tend to take excessive risk. In addition, the implicit guarantee weakens the market-monitoring effect of information disclosure. Using data from 60 commercial banks in China, we find strong empirical support for our findings.

The capital asset pricing model (CAPM) suggests that an investor's cost of equity capital is determined by beta, a measure of systematic risk based on how returns co-move with the overall market. We propose to replace beta with downside beta, a measure more consistent with investors' perception of risk. Recent empirical evidence suggests that downside beta better captures the risk-return relationship in both emerging markets and developed markets. Grouping companies into industries by two-digit Standard Industrial Classification (SIC) code, we show that the average downside beta can be very different from traditional beta. We discuss the implications of using downside beta on valuation and provide a simple example to illustrate the application in valuation for both diversified and undiversified investors.

The research of operational risk management among Chinese commercial banks is still in its preliminary stage. Operational risk events are rare and data is hard to collect. This leads to very small data samples. Besides, a large number of empirical researches show that the distributions of operational losses are often skewed with fat tails. To address these issues, this paper puts forward a loss distribution approach (LDA) based on bootstrap sampling and piecewise-defined severity distribution (BS-PSD-LDA). The approach divides data samples into two distinct parts (high-frequency low-severity losses and low-frequency high-severity losses), and fits the two parts by lognormal distribution and Generalized Pareto distribution respectively. Using hand-collected samples of 426 operational losses in Chinese commercial banks during 1994–2010, we estimate the magnitude of operational losses using the BS-PSD-LDA method. We show that our method provides a better fit than the traditional parametric methods. Besides, the method using historical simulation of nonparametric method seems to offer a good fit to the sample as well. However, we believe that the BS-PSD-LDA approach offers improvement from the perspective of satisfying risk control requirement of the regulatory authority and ensuring the efficiency of funds' utilization.

This paper introduces GARCH–EVT-Copula model and applies it to study the risk of foreign exchange portfolio. Multivariate Copulas, including Gaussian, t and Clayton ones, were used to describe a portfolio risk structure, and to extend the analysis from a bivariate to an n -dimensional asset allocation problem. We apply this methodology to study the returns of a portfolio of four major foreign currencies in China, including USD, EUR, JPY and HKD. Our results suggest that the optimal investment allocations are similar across different Copulas and confidence levels. In addition, we find that the optimal investment concentrates on the USD investment. Generally speaking, t Copula and Clayton Copula better portray the correlation structure of multiple assets than Normal Copula.

Small and medium manufacturing enterprises in order in the fierce competition in the market based on the need to strengthen the procurement management. In this paper, supply chain management theory as a guide, analysis of the existing problems of China's small and medium manufacturing enterprises procurement management at this stage, and put forward in supply chain management of small and medium manufacturing enterprises purchasing strategy. While Changchun certain auto parts business, for example, demonstrated the feasibility of the strategy.

The study of focused ion beam (FIB) milling for making etched facet and semiconductor/air distributed Bragg reflector (DBR) facets of AlGaInP-based red laser diodes (LD) is presented in this letter. For the Ga ion beam current of 100 pA at fixed accelerated voltage 30 kV, FIB milling rate of GaAs was found to be 0.46 μm 3 /nC. As a trade-off between high reflectivity and enough technical tolerance, the combination of third Bragg orders of semiconductor wall and air gap was chosen. The deeply etched mirror and distributed Bragg reflector facet consisting of pairs of semiconductor wall/air gap on laser diodes (LD) cavity facets with vertical sidewall on AlGaInP LDs were fabricated by focused Ga ion beam milling. Comparison of the AlGaInP LD with the mirrors between cleaved and FIB made facet was given and discussed.

II–VI wide band-gap semiconductor ternary Mg x Zn 1− x O nanocrystalline films have been successfully formed on conductive glass from ZnO powder by electrophoresis deposition (EDP). In comparison with ZnO powder, the Mg x Zn 1− x O films presented a more preferential crystalline orientation. Room temperature (RT) PL spectra of Mg x Zn 1− x O films revealed a stronger band-edge ultraviolet (UV) emission and a narrower FWMH of 13 nm than that of ZnO powder. The UV emission peak of Mg x Zn 1− x O film is located at the range of 375–381 nm with a small blue shift from that of ZnO powder. In addition, the ratio of PL peak intensity of band-edge emission to the deep-level emission in Mg x Zn 1− x O films reached as high as 135:1 while compared with 23:1 of ZnO powder under the same He–Cd laser excitation level. Consequently, these electrophoretic deposition (EPD) Mg x Zn 1− x O films exhibited a good quality for excitonic emission at RT.

We set information disclosure of internal control as a starting point to explore the relationship between the quality of internal control and accounting conservatism, and then adopt the entropy testing model to calculate the index of the internal control quality with the sample data of Chinese listed companies in financial industry from 2007–2011. Regression results show that earnings conservatism exists. The stronger the internal control is, the higher the accounting conservatism can be. Companies which have enhanced their internal control are more conservative, and these results make no difference with other industries.

The petroleum tracers nitrate and thiocyanate in subterranean waters were determined by capillary ion electrophoresis using direct UV detection. The high concentrations of salts in subterranean waters made the determination difficult. Taking sodium chloride to represent salts in subterranean waters, the effect of high concentrations of salts in samples on the determination was examined. Because of electrostacking and its inverse process, different concentrations of salts in samples could cause different peak heights and peak widths of constant concentration of an anion, but the peak area remained constant. The experimental results showed that the determination of the tracers was feasible using peak areas. By using 100 mM sodium chloride with 2.0 mM: cetyltrimethylammonium chloride as carrier electrolyte solution, determination of nitrate and thiocyanate was accomplished at concentrations of sodium chloride in the sample from 0 to 200 mM. Standard addition recoveries of the tracers in four subterranean water samples were between 91 and 113%.

In the field of financial risk management, there is still no effective solution for the selection and goodness-of-fit test of multivariate Copula functions. This paper proposes a selection criterion for Copula function based on the method of conditional probability integral transformation (CPIT). By comparing the statistics under the CPIT, we discuss the goodness-of-fit of Gaussian Copula, T-Copula and Clayton Copula in different sample sizes and dimensions. By using daily data of 3 stock indices in North America stock market, we compare the test statistics based on CPIT method with those based on maximum likelihood and kernel density estimates. The results show that the CPIT test can help effectively select the appropriate multivariate Copula function, and results in more accurate and stable statistics in the goodness-of-fit test. Test based on maximum likelihood estimate is unstable while test based on kernel density estimate is less stable for small samples.

The principle of antenna array distribution of two-dimensional synthetic aperture microwave radiometer is presented. The optimization technique based on differential evolution algorithm (DE) is presented for the design of antenna array. The object function is designed by minimizing redundant array and maximizing the distance between spatial frequency coverage samples, the stochastic array distributed on two-dimensional grid points are optimized, and the optimal results are obtained. Comparing with two-dimensional regular antenna array, the results show that the optimal array can obtain more spatial frequency samples and larger spatial frequency coverage.

Analysis of synthetic aperture microwave radiometer errors in channel such as mutual-coupling, channel imbalance, system noise based on two-dimensional 16 cells array arrangement is given, and the simulation models are established. Then the error compensation method, noise elimination and Image reconstruction based on BG Algorithm is given. Simulations show compensation method of channel error is valid.

This paper introduces GARCH-EVT-Copula model and applies it to study the portfolio risk of exchange rates. Multivariate Copulas including Gaussian Copula, t Copula and Clayton Copula were used to describe the structure and extend the analysis from bivariate to any n-dimension. We apply this methodology to study the returns of a portfolio of four major foreign currencies in China. Our results suggest that the optimal investment allocations are similar across different Copula and confidence levels and the optimal investment concentrates in the USD investment. Generally speaking, t Copula and Clayton Copula can better portray the correlation structure of multiple assets than Normal Copula.

Our paper establishes the causal links among the driving factor, flexibility degree and performance of a firm and tests these links based on two samples made of American and Chinese listed companies in manufacturing industry respectively from 2009 to 2012. Our results show the financial flexibilities of American and Chinese firms are mainly driven by strengthening risk management and chasing investment opportunities respectively, the degree of financial flexibility has positively impact on firm performance, and the effect of financial flexibility driven by chasing investment opportunities on performance is more statistically significant than financial flexibility driven by strengthening risk management. Our results suggest that a firm can improve its performance if it retains a high flexibility degree driven by chasing investment opportunities.

In this letter we report the use of roughly polished aluminum substrates with spin-coated polymer-smoothing layers for the fabrication of pentacene field-effect transistors. Transistors with spin-coated poly(methylmethacrylate) gate insulator layers were fabricated and showed good performance. On the gate insulator surface, the root-mean-square roughness was found to be 0.18nm, significantly smaller than the aluminum surface roughness, which is on the scale of tens of nanometers. Field-effect carrier mobilities extracted from the device data reached 0.75cm2V−1s−1; the maximum on/off current ratio was near 5×106.