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Background: The protective effect of air purifiers on the respiratory system of healthy children remains unclear so far. Method: We designed an air purifier intervention crossover study among 125 schoolchildren aged 9–12 years in a boarding school in Beijing, China. The indoor and outdoor PM10, PM2.5, and PM1 concentrations were monitored, and a total of 30 indices, including respiratory symptoms, pulmonary functions, inflammation, and oxidative stress indicators, were analyzed. We used the logistic mixed-effects model and the linear mixed-effects model to evaluate the correlation between exposure (intervention and time-weighted PM concentration) and effects (indicators). Findings: The findings showed that the air purifier intervention was associated with a 13.29% decrease in runny nose, 11.05% decrease in FeNO, 12.03% decrease in EBC IL-1β, and 4.2% decrease in IL-6. The patterns of associations with each 10 µg/m3 decrease in the PM10, PM2.5, and PM1 concentrations were consistent with those for filter intervention. Moreover, lower PM2.5 and PM1 were associated with lower EBC MCP-1, 5.47% and 13.56%, respectively. The pulmonary function indices were negatively associated with the intervention and PM. Interpretation: We screened out some sensitive indices (FeNO, IL-6, IL-1β, MCP-1) related to respiratory symptoms and inflammation, which could reflect the early abnormal response of the respiratory system under short-term PM exposure. Our findings suggested that air purifiers have a protective effect on children’s respiratory system. Funding: This work was supported by the National research program for key issues in air pollution control, China (Grant No. DQGG0405). Declaration of Interest: None to declare. Ethical Approval: The study was approved by the Ethics Review Committee of National Institute of Environmental Health, Chinese Center for Disease Control and Prevention (No. 201803) and the Biomedical Ethics Committee of Peking University (No. IRB00001052-18089). Parents and schoolchildren were informed about the study beforehand, and all the participants and their parents signed the informed consent.

Background: Children usually develop less severe disease responding to COVID-19 than adults. However, little is known about the detailed mechanism and pathogenesis of children with COVID-19 (CC), and its difference to adults with COVID-19 (AC). Methods: We conducted a plasma proteomic and metabolomic profiling, using the blood samples of 30 children including 18 CC cases and 12 healthy children (HC). By comparing the multi-omic data of AC, standard statistical tests were used to identify differentially expressed proteins (DEPs) and metabolites (DEMs) exclusively altered in CC. Enrichment analyses were conducted to identify biological processes/pathways specifically enriched in CC. To identify potential CC-specific biomarkers, we developed a new machine learning-based method named inference of biomarker combinations with minimal bias (iBM). Further experiments were conducted to validate the predicted metabolic markers. Findings: By quantifying 757 proteins and 1174 metabolites, we identified 44 DEPs and 249 DEMs exclusively altered in CC. Enrichment analyses demonstrated that in CC both deleterious immune response/inflammation processes and protective anti-inflammatory processes were strongly induced in the proteomic level, whereas protective anabolism-related processes were enriched in the metabolomic level. Using iBM, we prioritized two CC-specific biomarker combinations that contained 5 proteins and 5 metabolites, respectively, each exhibiting a total area under curve (AUC) value of 100% to accurately distinguish CC from HC or AC. Further experiments showed that the identified metabolites not only inhibited the expression of pro-inflammatory factors, but also suppressed coronaviral replication, implying that these factors played key roles in protecting pediatric patients from both viral infection and infection-induced inflammation. Interpretation: The finding of a strong antagonism of deleterious and protective effects provided new insights on the mechanism and pathogenesis of CC cases that mostly undergo mild symptoms. The identified CC-specific biomarkers could serve as candidate drug targets or therapeutic agents of COVID-19. Funding Statement: This work was supported by the Strategic Priority Research Program of CAS (XDB29010300 to X.Z.), the National Science and Technology Major Project (2018ZX10101004 to X.Z.), National Natural Science Foundation of China (81873964 to Y.Q., 31930021, 31970633 and 34671360 to Y.X., and 31670161 to X.Z.), Grant from the CAS Youth Innovation Promotion Association (2020332 to Y.Q.), the program for HUST Academic Frontier Youth Team (Y.X.). Declaration of Interests: The authors declare no conflicts of interest. Ethics Approval Statement: All work performed in this study was approved by the Guangzhou Women and Children's Medical Center Ethics Committee and Written informed consent was waived by the Ethics Commission of the designated hospital for emerging infectious diseases.

Localization of the plastic strain at slip bands (SBs) is an important feature of cyclic straining and frequently plays a key role in crack initiation connected to the fatigue resistance of metallic materials. However, the mechanism of SB-induced cracking in hexagonal close-packed (hcp) materials have not been revealed so far. Here we studied underlying elastic cyclic deformation and associated dislocation activities within the SBs in a rare earth-containing magnesium (RE-Mg) alloy. The results show that basal slip is the solo deformation mode at grain scale, but gliding of dislocation is still visible near grain boundaries to accommodate localized in the nucleation and growth of damaged zone and move towards the matrix-SB interface, at which the internal cracks initiate and coalesce together forming facet morphology on fracture surface. The contribution of dislocation motion to the formation of damaged zone is believed to retard the development of basal SBs, correspondingly enhancing the fatigue resistance of RE-mg alloys.

Deformation nanotwin and segregation of Ni, Cr, Al, Co elements in single crystal Ni-based superalloys was observed using the transmission electron microscope and energy-dispersive X-ray analysis after tensile tests at room temperature. Deformation nanotwins are rooted in the dislocations decomposing during plastic deformation, and elemental segregation can assist plasticity, resulting in twin shearing γ' precipitation in Ni-base superalloys. It proves that the twin and elemental segregation can be activated at room temperature which is independent on the temperature. These critical new findings provide insight into understanding twinning and elemental segregation in plastically deformation of single crystal Ni-based superalloys.

Background: Epidemiological data regarding the regional differences in chronic pancreatitis (CP) from the mainland of China is lacking. We aimed to gather and combine the information concerning the regional distribution, diagnosis and treatment of CP, in addition to the risk factors associated with pancreatic cancer (PaCa) and death from published articles. Methods: Case articles on CP published in three English and four Chinese databases from January 1979 to December 2018 were analysed. Findings: A total of 4,452 cases articles (containing 161,243 CP cases) were included. Almost all relevant departments of 1,557 hospitals participated in the writing of CP articles and approximately 67.2% of hospitals wrote only one article. The etiologies, symptoms, treatments, and number of cases with PaCa varied from region to region. Surgical treatment was more common in underdeveloped areas. Endoscopic therapy was mainly concentrated in developed areas and was also associated with non-alcoholic CP. PaCa detected during hospitalization was mainly related to jaundice (r = 0.35, P = 0.000), pain (r = 0.31, P = 0.000), diabetes (r = 0.20, P = 0.000), biliary diseases (r = 0.36, P = 0.000), alcoholic CP (r = 0.30, P = 0.000), conservative treatment (r = 0.37, P = 0.000) and surgical treatment (r = 0.21, P = 0.000). PaCa detected during follow-up was primarily associated with idiopathic CP (r = 0.26, P = 0.000), alcoholic CP (r = 0.23, P = 0.000), endoscopy therapy (r = 0.3, P = 0.000) and surgical treatment (r = 0.24, P = 0.000). Death during hospitalization was only related to surgery. Interpretation: Many regions have gradually formed their own unique characteristics in terms of the diagnosis and treatment of CP. However, the level of diagnosis and treatment of CP in many areas still needs to be improved. The problem of uneven distribution of medical resources needs to be resolved. Funding Statement: None. Declaration of Interests: The authors declare that there are no competing interests associated with the manuscript.

We examine disclosures of business outlook by rank-and-file employees on Glassdoor.com. Glassdoor.com is a social media platform where employees can share their views publicly and anonymously. We find that employee disclosures are more highly associated with loan spreads in private lending agreements as those disclosures become more relevant to lenders’ decisions (i.e., when the borrowing firm has higher information opacity, has more dispersed operations, or is more financially constrained) and as those disclosures become more reliable (i.e., as the number of employee ratings increases, when those ratings are based proportionately more on current employees, and when firms have a larger labor force.). The results are consistent with employee disclosures providing useful inside information that otherwise may not have been disclosed publicly by upper-level managers. The rapid growth in information disclosed on social media platforms provides researchers an important and interesting setting to explore how alternative sources of information may be generated and disseminated by various stakeholders.

In this paper, we offer the novel insight that debt contract design is affected by the redeployability of borrowers’ capital and labor assets. We find that borrowers with greater redeployability have enjoy favorable loan terms (i.e. a lower loan spread, fewer loan covenants, and a lower likelihood of being a secured loan). These findings suggest that redeployability mitigates lenders’ concerns about cost stickiness and financial distress, as supported by the supplementary evidence that redeployability is negatively associated with cost stickiness and financial distress risk. Further cross-sectional analyses show that lenders regard capital and labor redeployability as substitutes in setting loan terms, consistent with these two types of redeployability having similar functions in reducing post-contracting loan repayment problems. The positive effect of redeployability on favorable loan terms is also stronger for firms with more growth opportunities, consistent with lenders viewing redeployability as important for minimizing the restructuring costs should investments fail.

This paper examines the effect of information technologies on stock price crash risk. Information technology advancements change the way firm-specific information is disseminated and acquired, providing significant benefits to investors. We use the required staggered implementation of the SEC’s Electronic Data Gathering and Analysis Retrieval system (EDGAR) to examine the impact of information technologies on stock price crash risk. We find that the implementation of EDGAR is associated with a decrease in stock price crash risk and this effect is more pronounced for firms with greater information asymmetry. Additionally, we provide evidence that conservatism increases following the EDGAR implementation, suggesting that more timely recognition of bad news is a channel through which stock price crash risk decreases following the implementation. Our results suggest that information technologies that strengthen the monitoring ability of investors limit managers’ ability to conceal and hoard bad news, which ultimately reduces stock price crash risk.

International Financial Reporting Standard (IFRS) 9 changes banks’ impairment accounting by replacing the incurred credit loss model with a more forward-looking expected credit loss (ECL) model. We examine whether and how the switch to ECL recognition affects the timeliness of banks’ provisioning for loan losses. Using a sample of international banks from 33 countries, we find that the shift to an ECL model significantly improves loan loss recognition timeliness (LLRT). The effect is more pronounced for banks that engage in greater risk-taking and record lower loan losses prior to the shift and for banks subject to heavier provisions for underperforming loans after it. Consistent with prior studies on the role of LLRT under the incurred credit loss regime, we find that the adoption of IFRS 9 extenuates the pro-cyclicality of bank lending and risk-taking. Finally, we find that U.S. banks, which are not subject to IFRS 9, also experience an improvement in LLRT if they have a subsidiary in an IFRS 9-adopting country. These findings offer early insight into a revolutionary change in accounting for credit losses.

Institutional cross-owners, specifically institutional investors with significant stakes in multiple firms in the same industry, are becoming increasingly common in the United States. In this paper, we investigate and find that the presence of institutional cross-owners facilitates a firm’s financing of its investment opportunities, consistent with institutional cross-owners reducing the adverse selection concerns of those who provide capital for the investment opportunities. We then examine the conditions under which the presence of institutional cross-owners is likely to more significantly reduce adverse selection and thereby have even more of a positive effect on the financing of investment opportunities. We document that relative to transient institutional cross-owners, dedicated institutional cross-owners facilitate more financing of investment opportunities. We also find that institutional cross-owners facilitate the financing of investment opportunities even more for firms with greater dependence on external financing, those with an opaque financial reporting environment, and those with more product market competition. Our paper offers novel insight into how a firm can benefit from the presence of institutional cross-owners.

The determinants of audit quality have drawn much research interests among academics and practitioners. This study extends extant literature in this particular area by investigating how a unique control mechanism in China, namely, government auditors’ ethics commitment, impacts audit quality. Specifically, using the survey data provided by 143 individual auditors from Chinese government audit institutions, this study finds that the strength of auditors’ ethics commitment is inversely related to reduced audit quality (RAQ) behaviors, an inverse measure of government audit quality. Moreover, a stronger perceived penalty by individual auditors deters RAQ behavior and strengths the curbing effect of ethics commitment on audit quality-reduced activities. Additionally, the authors find that as auditors’ tenure increases, ethics commitment becomes more effective in reducing RAQ occurrence, while such reinforcing effect is not present in penalty’s deterrence of RAQ behaviors.

Masulis and Mobbs (2014, 2015) find that independent directors with multiple directorships allocate their monitoring effort unequally based on a directorship’s relative prestige. We investigate whether bank loan contract terms reflect such unequal allocation of directors’ monitoring effort. We find that bank loans of firms with a greater proportion of independent directors for whom the board is among their most prestigious have lower spreads, longer maturities, fewer covenants, lower syndicate concentration, lower likelihood of collateral requirement, lower annual loan fees, and higher bond ratings. Our evidence indicates that independent directors’ attention is associated with lower cost of borrowing.

The interest rate is a key determinant of firm investment. We integrate a widely used term structure model of interest rates, CIR (Cox, Ingersoll, and Ross (1985)), with the q theory of investment (Hayashi (1982) and Abel and Eberly (1994)). We show that stochastic interest rates have significant effects on investment and firm value because capital is medium/long lived. Capital adjustment costs have a first-order effect on investment and firm value. We use duration to measure the interest rate sensitivity of firm value, decompose a firm into assets in place and growth opportunities, and value each component. By extending the model to allow for endogenous capital liquidation, we find that the liquidation option provides a valuable protection against the increase of interest rates. We further generalize the model to incorporate asymmetric adjustment costs, a price wedge between purchasing and selling capital, fixed investment costs, and irreversibility. We find that inaction is often optimal for an empirically relevant range of interest rates for firms facing fixed costs or price wedges. Finally, marginal q is equal to average q in our stochastic interest rate settings, including one with serially correlated productivity shocks.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

We develop a tractable incomplete-markets model with an earnings process Y subject to permanent shocks and borrowing constraints. Financial frictions cause the marginal (certainty equivalent) value of wealth W to be greater than unity and decrease with liquidity w = W / Y . Additionally, financial frictions cause consumption to decrease with this endogenously determined marginal value of liquidity. Risk aversion and the elasticity of inter-temporal substitution play very different roles on consumption and the dispersion of w. Permanent earnings shocks, especially large discrete stochastic jumps, make consumption smoothing quantitatively difficult to achieve. Borrowing constraints and permanent discrete jump shocks can generate empirically plausible values for marginal propensities to consume in the range of 0.2 to 0.6.

Different from traditional marketing channels, the availability of consumer-generated product information depends on the quantity of users who have used the product, and companies have little control over its content. This study examines how a company selling an experience product should strategically respond to the presence of consumer-generated product information in a dynamic pricing model in which sales in the early period have an impact on the generation of product quality signal for later consumers. Our model analysis shows that although a firm has no control over the consumer feedback, it is advantageous for the firm to induce more consumer-generated product information by lowering the early-period price. The availability of consumer-generated product information always increases the expected profit. Additional analyses suggest that early-period price cut is more significant for products targeting more heterogeneous consumers and that firms should adopt and invest in technologies that enhance the effectiveness of extracting useful information from online consumer reviews and social media sharing. To examine the robustness of our findings, alternative model specifications are discussed.

We examine the relation between customer concentration, a critically important aspect of a firm’s business model, and the level of corporate tax avoidance. A firm with a concentrated corporate customer base needs to hold more cash, faces a higher likelihood of financial distress, has a stronger incentive to manage earnings upwards, and is likely to be more risk tolerant. Since tax planning can increase both cash flow and accounting earnings and risk tolerant firms are more likely to accept the risks inherent in tax avoidance activities, we hypothesize that corporate customer concentration is positively associated with tax avoidance. As predicted, we find that various measures of corporate customer concentration are positively related to tax avoidance as measured by effective tax rate and book-tax difference. We also document that this positive relation is more pronounced when the firm captures a lower market share in its industry, enjoys less revenue diversification, and engages in less real earnings management. By contrast, we contend that a governmental major customer provides stable cash flow to suppliers and thus alleviates their need for tax avoidance. Consistent with this reasoning, we find that firms engage in lower levels of tax avoidance when they have a governmental major customer, and this association is less pronounced under Democratic presidencies. Together, our findings indicate that a firm’s business model (i.e., corporate and governmental major customer) has a significant effect on the extent to which it avoids taxes.

We consider optimal nonlinear pricing when there is information ambiguity in a monopolist’s prior belief about the distribution of the buyers. The monopolist’s prior information cannot be described by a probabilistic distribution; rather, it is described by an ϵ-contaminated capacity. We find that information ambiguity leads to bunching at the bottom: in an optimal contract, the monopolist offers a fixed quantity to the buyers with low valuation. Other high valuation buyers are offered the same quantity as in the case with no information ambiguity; however, they get a greater discount. When information ambiguity increases, more buyers at the bottom are offered a fixed quantity, and the quantity they are offered increases; thus, the monopolist has to concede more information rent to the buyers, and all buyers pay a lower unit price.

We examine the relationship between religiosity and risk-taking in the international banking sector. Previous research indicates that individuals who are more religious have greater risk aversion. Additionally, prior literature documents a positive relation between religiosity and both financial accounting transparency and timely recognition of bad news. Given timely recognition of future loan losses, religiosity could constrain excessive risk-taking through enhanced internal and external monitoring. We hypothesize and find that banks located in more religious countries exhibit lower levels of risk in their decision-making. We also demonstrate that banks in more religious countries were less likely to encounter financial difficulty or fail during the 2007–2009 financial crisis.

Online labor markets are platforms that facilitate Buyer-Determined (BD) auctions in which buyers can identify and hire service providers who bid to offer IT services. We examine the effect of bid visibility (i.e., open bid versus sealed bid) on the bidders’ entry strategies (number of bids and quality of bids) and auction performance (buyer surplus, contract probability, and buyer satisfaction). We first theoretically analyze equilibrium bidder entry, and we derive hypotheses on the effect of open bid versus sealed bid on bidder strategic entry and auction performance. Using a proprietary large-scale dataset that allows us to observe 1,816,886 bids from 106,147 open bid and 9,950 sealed bid auctions posted on Freelancer.com by 41,530 unique buyers, we find that, while sealed bid BD auctions receive more bids, open bid BD auctions consistently outperform sealed bid BD auctions in terms of the quality of bids and auction performance. Specifically, compared with sealed bid BD auctions, while open bid BD auctions attract 8.1% fewer bids, they receive 3.59% more bids from experienced service providers, they are 50% more likely to get contracted, and they result in at least 19% more in buyer’s surplus. These findings are robust to different econometric specifications and propensity score matching estimators. Our study suggests that empirically, BD auctions do not exhibit revenue equivalence across auction designs, as predicted in the literature. The performance difference is attributed to the “screening effect†of open bid BD auctions that helps filter out low quality, inexperienced, bidders. Notably, the additional bids in sealed bid BD auctions result from the lack of pre-evaluation self-screening, and they are thus unusable, if not harmful, to auction performance by increasing buyers’ bid evaluation costs. Contrary to conventional wisdom and industry practice that expect “the more bids, the better†, which favors sealed bid BD auctions, our results demonstrate that fewer bids (albeit of higher quality), and thus open bid BD auctions, are a preferred option for online labor markets.

Accounting researchers question the effect of (“bright-line”) regulations on firms' financial reporting behavior. To offer evidence on this issue, we take advantage of the regulatory environment in the Chinese setting. In China, regulators have created a bright-line at which firms must disclose within 30 days after the fiscal year-end expected changes in net income of 50 percent or greater. Consistent with earnings management to avoid reporting earnings that miss this explicit regulation-generated benchmark, we find that far more firms than would be expected just beat the −50 percent threshold (i.e., there is a distinct “kink” in the earnings change distribution at −50 percent). As further evidence of earnings management, firms just beating the −50 percent threshold have higher abnormal accruals and excess non-operating income. The ability of firms to avoid missing the −50 percent regulatory benchmark, however, is reduced for those with stronger monitoring (foreign investors, exchange regulators, and IFRS). We find no evidence of earnings management at the regulatory threshold of +50 percent change in net income. Overall, our study sheds light on firms' opportunistic reporting behavior to suppress bad news related to a regulatory benchmark and on the monitoring mechanisms associated with such behavior.

Motivated by the disconnect between survey evidence documenting that executives prioritize implicit contracting (i.e., labor market-based career concerns) when making earnings management decisions (Graham et al., 2005) and the extant literature’s focus on explicit contracting to explain earnings manipulation, we analytically examine the role of managerial career concerns in earnings management. Building on Holmstrom (1982, 1999), we present a career concerns-based earnings management model that incorporates the unique reversing nature of earnings management. A key insight derived from the model is that whether the predictions of a traditional career concerns model prevail, which is to say that managers engage in more income-increasing behavior in their early years, critically depends upon the reversal characteristics of the earnings management vehicle chosen.

An entrepreneur faces signicant non-diversiable business risk and liquidity constraints, two frictions that lead to incomplete markets. We provide an integrated framework to study how these frictions inuence a potential entrepreneur’s business startup/entry, capital accumulation/asset sales, portfolio allocation, consumption/saving, and business exit decisions. With frictions, entrepreneurs invest substantially less in the business, consume less, and allocate less to the market portfolio. While the business liquidation option is completely out of the money under complete markets, with frictions, this endogenous exit option provides signicant exibility and is quite valuable for the entrepreneur to manage downside risk under incomplete markets. We further derive novel empirical predictions about the economic dynamics of entrepreneurship. When liquidation is suciently distant, business investment increases with nancial wealth. However, when liquidation is suciently likely, the entrepreneur’s risk management considerations induce investment to decrease with nancial wealth, generating non-monotonicity of investment in nancial wealth. Furthermore, we show that the exibility to accumulate wealth before entering entrepreneurship is highly valuable. The optimal entry decision critically depends on the outside option, the start-up cost, risk aversion, and wealth. Heterogeneity among entrepreneurs is thus important. Finally, we provide an operational framework to calculate the private equity idiosyncratic risk premium for an entrepreneurial rm and show that this premium critically depends on wealth, non-diversiable risk, and risk aversion.