This study investigates whether banks respond to financial misreporting as the borrowing firms release misstated financial reports, i.e., in the misreporting period. Drawing upon finance theory that recognizes banks' superior information access and processing abilities, this study predicts and finds that banks adjust loan contract terms in response to the ongoing misreporting. Compared with loans issued in the prior period, loans issued in the misreporting period have higher interest spread, are more likely to be secured by collateral, and have more restrictive covenants. Further analyses show that banks acquire indirect, rather than direct, information about the misreporting and that they do not fully adjust loan pricing until after the restatement announcement. Together, these findings suggest that banks make timely, but insufficient, adjustments during the misreporting period. Nevertheless, banks' early reactions appear to be unique, as equity investors do not respond to the ongoing misreporting, but react to the loan information when it becomes public.
JEL Classifications: D82; G21; M41.
SYNOPSIS
We examine the relation between corporate social responsibility (CSR) performance and conditional accounting conservatism. Drawing upon the stakeholder-engaging and information-enhancing perspectives of CSR activities, we hypothesize that the demand for conditional conservatism, which primarily arises from various contracting parties' concern about managerial opportunism and/or information asymmetry, is lower for better-performing CSR firms. Using the CSR ratings from the KLD database, we find, as predicted, a negative relation between CSR performance and conditional conservatism. These findings are robust to using a difference-in-differences research design and alternative measures of conditional conservatism. Further, cross-sectional analyses reveal that the negative association is more pronounced for firms with greater information asymmetry and stronger corporate governance. Overall, this study enhances our understanding of how a firm's CSR engagement may relate to an important attribute of financial reporting.
In holographic data storage systems, it is straightforward to increase the storage capacity by mean of reducing the pitches among data symbols. However, this may lead to severe inter-symbol interference (ISI) and also unacceptable data error rate. To deal with the problem, we first model the channel as a partial response (PR) and use the maximum-likelihood (ML) detection to control the ISI. The Viterbi decoder is employed to implement ML detection.
Hepatitis C virus (HCV) infection is a major cause of chronic hepatitis and hepatocellular carcinoma. It infects human liver cells through several cellular protein receptors including CD81, SR-BI, claudin-1, and occludin. Previous reports also show that lectin receptors can mediate HCV recognition and entry. The envelope proteins of HCV (E1 and E2) are heavily glycosylated, further indicating the possible roles of lectin receptor-virus interaction in HCV infection. However, there is limited study investigating the relationship of HCV envelope glycoproteins and lectin as well as non-lectin receptors. Here we used surface plasmon resonance to examine the binding affinity of different glycoforms of recombinant HCV envelope protein to receptors and inspected the infectivity and assembly of HCV pseudoparticles composed of different glycoforms of envelope proteins. Our results indicated that DC-SIGN, L-SIGN, and Langerin had higher affinity to recombinant HCV envelope proteins in the presence of calcium ions than non-lectin receptors, and envelope proteins with Man8/9 N-glycans showed approximate 10-fold better binding to lectin receptors than envelope proteins with Man5 and complex type N-glycans. Interestingly, comparing among glycoforms, recombinant envelope proteins with Man5 N-glycans showed the highest binding affinity when interacting with non-lectin receptors. In summary, the glycans on HCV envelope protein play a modulatory role in HCV assembly and infection and direct HCV-receptor interaction, which mediates viral entry in different cells. Receptors with high affinity to HCV envelope proteins may be considered as targets for development of a therapeutic strategy against HCV.
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