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When different species experience similar selection pressures, the probability of evolving similar adaptive solutions may be influenced by legacies of evolutionary history, such as lineage-specific changes in genetic background. Here we test for adaptive convergence in hemoglobin (Hb) function among high-altitude passerine birds that are native to the Qinghai-Tibet Plateau, and we examine whether convergent increases in Hb-O affinity have a similar molecular basis in different species. We documented that high-altitude parid and aegithalid species from the Qinghai-Tibet Plateau have evolved derived increases in Hb-O affinity in comparison with their closest lowland relatives in East Asia. However, convergent increases in Hb-O affinity and convergence in underlying functional mechanisms were seldom attributable to the same amino acid substitutions in different species. Using ancestral protein resurrection and site-directed mutagenesis, we experimentally confirmed two cases in which parallel substitutions contributed to convergent increases in Hb-O affinity in codistributed high-altitude species. In one case involving the ground tit () and gray-crested tit (), parallel amino acid replacements with affinity-enhancing effects were attributable to nonsynonymous substitutions at a CpG dinucleotide, suggesting a possible role for mutation bias in promoting recurrent changes at the same site. Overall, most altitude-related changes in Hb function were caused by divergent amino acid substitutions, and a select few were caused by parallel substitutions that produced similar phenotypic effects on the divergent genetic backgrounds of different species.

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We document that the likelihood of an analyst following a supplier–customer firm pair increases with the strength of the economic ties along the supply chain, as measured by the percentage of the supplier’s sales to the customer. Analysts who follow a covered firm’s customer provide more accurate earnings forecasts for the supplier firm than analysts who do not. While both types of analysts respond to and incorporate the earnings news from the customer firm into their revisions of the supplier’s earnings forecasts, supplier–customer analysts exhibit a larger improvement in their forecast accuracy for the supplier subsequent to the customer’s earnings announcements, when compared to other analysts. Overall, the evidence suggests that supplier–customer analysts benefit from the informational complementarities along the supply chain and improve their forecast accuracy as a result

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We examine the determinants and consequences of stock option compensation to directors of state-controlled Chinese firms that are incorporated outside China and listed in Hong Kong, referred to as state-controlled Red Chip firms, over the period 1990–2005. We find that state-controlled Red Chip firms granted directors a significant number of stock options in response to the demand of foreign investors. However, state-controlled Red Chip firms forced the directors to forfeit a significant percentage of their vested in-the-money stock options due to a conflict between the high-powered stock option compensation and state-controlled Red Chip firms' unique managerial labor market. We find little evidence that directors' stock option compensation changed the behavior of state-controlled Red Chip firms. Overall, our results are consistent with the media's allegation that the stock options granted to directors of many, if not all, state-controlled Red Chip firms are not genuine compensation. JEL Classifications: D21, G32, J33, M40, N25 Data Availability: Data used in this study are publicly available from the sources identified in the paper.

This study examines the relation between narrative risk disclosures in mandatory reports and the pricing of credit risk. In particular, we investigate whether and how the Securities and Exchange Commission (SEC) mandate of risk factor disclosures (RFDs) affects credit default swap (CDS) spreads. Based on the theory of Duffie and Lando (2001), we predict and find that CDS spreads decrease significantly after RFDs are made available in 10‐K/10‐Q filings. These results suggest that RFDs improve information transparency about the firm's underlying risk, thereby reducing the information risk premium in CDS spreads. The content analysis further reveals that disclosures pertinent to financial and idiosyncratic risk are especially relevant to credit investors. In cross‐sectional analyses, we document that RFDs are more useful for evaluating the business prospects and default risk of firms with greater information uncertainty/asymmetry. Overall, our findings imply that the SEC requirement for adding a risk factor section to periodic reports enhances the transparency of firm risk and facilitates credit investors in evaluating the credit quality of the firm.

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