We examine whether and how managers use loan loss provisions to smooth income and to signal their private information about their banks' future prospects. Our paper highlights that the use of the loan loss provision to accomplish more than one objective gives rise to situation‐specific costs and benefits of manipulating the provision up or down. We hypothesize that relatively undervalued banks have greater incentives to signal their future prospects than fairly valued banks and that banks' incentives to smooth intensify as premanaged earnings deviate from norms. On the basis of these conjectures, we categorize sample banks into subgroups that are predicted to use loan loss provisions consistent with their situation‐specific incentives. This allows us to refine the research methods used in prior research to examine heterogeneous incentives. While we find evidence consistent with the use of loan loss provisions to smooth earnings, particularly when premanaged earnings are extreme, our evidence on signaling is less consistent. In particular, our signaling results depend on the introduction of an interaction term that has not been used in prior research. We also document that the intensity of smoothing (signaling) is not uniform across the sample. In addition to being a function of the incentive to smooth (signal), it also is a function of the incentive to signal (smooth).

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We discovered a new lineage of the globally important fungal pathogen Cryptococcus gattii on the basis of analysis of six isolates collected from three locations spanning the Central Miombo Woodlands of Zambia, Africa. All isolates were from environments (middens and tree holes) that are associated with a small mammal, the African hyrax. Phylogenetic and population genetic analyses confirmed that these isolates form a distinct, deeply divergent lineage, which we name VGV. VGV comprises two subclades (A and B) that are capable of causing mild lung infection with negligible neurotropism in mice. Comparing the VGV genome to previously identified lineages of C. gattii revealed a unique suite of genes together with gene loss and inversion events. However, standard URA5 restriction fragment length polymorphism (RFLP) analysis could not distinguish between VGV and VGIV isolates. We therefore developed a new URA5 RFLP method that can reliably identify the newly described lineage. Our work highlights how sampling understudied ecological regions alongside genomic and functional characterization can broaden our understanding of the evolution and ecology of major global pathogens. IMPORTANCE Cryptococcus gattii is an environmental pathogen that causes severe systemic infection in immunocompetent individuals more often than in immunocompromised humans. Over the past 2 decades, researchers have shown that C. gattii falls within four genetically distinct major lineages. By combining field work from an understudied ecological region (the Central Miombo Woodlands of Zambia, Africa), genome sequencing and assemblies, phylogenetic and population genetic analyses, and phenotypic characterization (morphology, histopathological, drug-sensitivity, survival experiments), we discovered a hitherto unknown lineage, which we name VGV (variety gattii five). The discovery of a new lineage from an understudied ecological region has far-reaching implications for the study and understanding of fungal pathogens and diseases they cause.

Using the Benchmark and Annual Surveys of U.S. Direct Investment Abroad collected by the Bureau of Economic Analysis, the authors examine the operations of U.S. multinational corporations (MNCs) in seven manufacturing industries and twenty-two countries over the years 1982-91. They analyze how tariffs, wages, and industrial relations environments influenced U.S. MNCs' decisions about where to locate assets and employment. The results imply that wages and the industrial relations environment were statistically significant determinants of the extent to which MNCs located operations in a particular host country. However, while these factors were important, their impact was much smaller than that of host country market size, which was by far the main determinant of MNC location decisions. Furthermore, the authors find no evidence that tariff reductions increased the share of U.S. MNC activities located abroad. Thus, concerns that tariff reductions may lead to loss of "American jobs" appear to be exaggerated. H ow multinational corporations (MNCs) decide where to locate production has been a subject of considerable interest in recent years. For example, in the debate over the North American Free Trade Agreement (NAFTA), U.S. labor unions and many politicians, as well as some academics, expressed concern that trade liberalization would cause U.S. MNCs to move production facilities from the United States to Mexico, so as to take advantage of lower Mexican wages.1 The basic logic is