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To deter financial misstatements, many companies have recently adopted compensation recovery policies—commonly known as \"clawbacks\"—that authorize the board to recoup compensation paid to executives based on misstated financial reports. Clawbacks have been shown to reduce financial misstatements and increase investors' confidence on earnings information. We show that the benefits come with an unintended consequence of certain firms substituting for accruals management with real transactions management (e.g., reduce research and development [R&D] expenditures), especially firms with strong incentives to achieve short-term earnings targets, such as firms with high growth or high transient institutional ownership. As such, the total amount of earnings management does not decrease subsequent to clawback adoption. We further show that although real transactions management temporarily boosts those clawback adopters' short-term profitability and stock performance, this trend reverses after three years. In summary, clawbacks may have unexpected effects for a subset of firms whose managers are under greater pressure to meet earnings goals.

Weyl points are isolated degeneracies in reciprocal space that are monopoles of the Berry curvature. This topological charge makes them inherently robust to Hermitian perturbations of the system. However, non-Hermitian effects, usually inaccessible in condensed-matter systems, are an important feature of photonic systems, and when added to an otherwise Hermitian Weyl material have been predicted to spread the Berry charge of the Weyl point out onto a ring of exceptional points, creating a Weyl exceptional ring and fundamentally altering its properties. Here, we observe the implications of the Weyl exceptional ring using real-space measurements of an evanescently coupled bipartite optical waveguide array by probing its effects on the Fermi arc surface states and bulk diffraction properties of the two constituent sublattices in an experimental realization of a distributed Berry charge in a topological material.

PurposeThe purpose of this study is to assess the potential economic cost of the COVID-19 pandemic on China's macroeconomy and agri-food system and provide policy recommendations to stimulate economic growth and agri-food system development.Design/methodology/approachAn economy-wide multisector multiplier model built on China's most recent social accounting matrix (SAM) for 2017 with 149 economic sectors is used to assess the impact of COVID-19 on China's macroeconomy and agri-food system. SAM multiplier analysis focuses on supply chain linkages and captures the complexity of an interconnected economy.FindingsThe paper finds that both the macroeconomy and agri-food systems are hit significantly by COVID-19. There are three main findings. First, affected by COVID-19, GDP decreased by 6.8% in the first quarter of 2020 compared with that in 2019, while the economic loss of the agri-food system is equivalent to 7% of its value added (about RMB 0.26 trillion). More than 46m agri-food system workers (about 27% of total employment) lost their jobs to COVID-19 in the lockdown phase. The COVID-19 affects the employment of unskilled labor more than that of skilled labor. Second, when the economy starts to recover during the second and third quarters, the growth rate in the value added of the agri-food system turns positive but still modest. Many jobs resume during the period, but the level of agri-food system employment continues to be lower than the base. The agri-food system employment recovery is slower than that of other sectors largely due to the sluggish recovery of restaurants. Agri-food system employment drops by 8.6m, which accounts for about 33% of the total jobs lost. Third, although the domestic economy is expected to be normal in the fourth quarter, external demand still faces uncertainties due to the global pandemic. The agri-food system is projected to grow by 1.1% annually in 2020 with resuming export demand, while only by 0.4% without resuming export demand. These rates are much lower than an annual growth rate of 4.3% for the agri-food system in 2019. The results also show that, without resuming export demand, China's total economy will grow less than 1% in 2020, while, with export demand resumed, the growth rate rises to 1.7%. These rates are much lower than an annual GDP growth rate of 6.1% in 2019.Practical implicationsThe results show that continuously reducing economic dependency on exports and stimulating domestic demand are key areas that require policy support. The agri-food system can play an important role in supporting broad economic growth and job creation as SMEs are major part of the AFS. Job creation requires policies to promote innovation by entrepreneurs who run numerous SMEs in China.Originality/valueThis paper represents the first systematic study assessing the impact of COVID-19 on China's agri-food system in terms of value added and employment. The assessment considers three phases of lockdown, recovery and normal phases in order to capture the full potential cost of COVID-19.

Defect modes in two-dimensional periodic photonic structures have found use in diverse optical devices. For example, photonic crystal cavities confine optical modes to subwavelength volumes and can be used for enhancement of nonlinearity, lasing and cavity quantum electrodynamics. Defect-core photonic crystal fibres allow for supercontinuum generation and endlessly single-mode fibres with large cores. However, these modes are notoriously fragile: small structural change leads to significant detuning of resonance frequency and mode volume. Here, we show that photonic topological crystalline insulator structures can be used to topologically protect the mode frequency at mid-gap and minimize the volume of a photonic defect mode. We experimentally demonstrate this in a femtosecond-laser-written waveguide array by observing the presence of a topological zero mode confined to the corner of the array. The robustness of this mode is guaranteed by a topological invariant that protects zero-dimensional states embedded in a two-dimensional environment—a novel form of topological protection that has not been previously demonstrated.

In this paper, we examine the effect of shareholder rights on reducing the cost of equity and the impact of agency problems from free cash flow (FCF) on this effect. We find that firms with strong shareholder rights have a significantly lower implied cost of equity after controlling for risk factors, price momentum, analysts’ forecast biases, and industry and year effects than do firms with weak shareholder rights. Further analysis shows that the effect of shareholder rights on reducing the cost of equity is significantly stronger for firms with more severe agency problems from FCFs.

A 2D topological charge pump in a photonic waveguide array is used to observe boundary physics associated with the 4D quantum Hall effect experimentally. Quantum Hall annexes fourth dimension The quantum Hall effect, discovered in the 1980s, is an important fundamental effect in condensed matter physics that links topological states with electronic properties in two-dimensional systems. The quantized conductance is prescribed by an integer global topological invariant and is therefore protected against perturbations. Such invariants are characterized by a so-called Chern number. Two papers in this issue experimentally confirm the prediction that the quantum Hall effect can be generalized to a four-dimensional (4D) system. Immanuel Bloch and colleagues implement the 4D quantum Hall system in a superlattice of ultracold bosonic atoms, and Mikael Rechtsman and colleagues achieve the same in a photonic waveguide array. Both groups find that their system harbours a second Chern number, as expected. The studies show an intriguing advance towards new physics provided by topological protection in higher dimensions. When a two-dimensional (2D) electron gas is placed in a perpendicular magnetic field, its in-plane transverse conductance becomes quantized; this is known as the quantum Hall effect 1 . It arises from the non-trivial topology of the electronic band structure of the system, where an integer topological invariant (the first Chern number) leads to quantized Hall conductance. It has been shown theoretically that the quantum Hall effect can be generalized to four spatial dimensions 2 , 3 , 4 , but so far this has not been realized experimentally because experimental systems are limited to three spatial dimensions. Here we use tunable 2D arrays of photonic waveguides to realize a dynamically generated four-dimensional (4D) quantum Hall system experimentally. The inter-waveguide separation in the array is constructed in such a way that the propagation of light through the device samples over momenta in two additional synthetic dimensions, thus realizing a 2D topological pump 5 , 6 , 7 , 8 . As a result, the band structure has 4D topological invariants (known as second Chern numbers) that support a quantized bulk Hall response with 4D symmetry 7 . In a finite-sized system, the 4D topological bulk response is carried by localized edge modes that cross the sample when the synthetic momenta are modulated. We observe this crossing directly through photon pumping of our system from edge to edge and corner to corner. These crossings are equivalent to charge pumping across a 4D system from one three-dimensional hypersurface to the spatially opposite one and from one 2D hyperedge to another. Our results provide a platform for the study of higher-dimensional topological physics.

A central challenge in developing quantum computers and long-range quantum networks is the distribution of entanglement across many individually controllable qubits 1 . Colour centres in diamond have emerged as leading solid-state ‘artificial atom’ qubits 2 , 3 because they enable on-demand remote entanglement 4 , coherent control of over ten ancillae qubits with minute-long coherence times 5 and memory-enhanced quantum communication 6 . A critical next step is to integrate large numbers of artificial atoms with photonic architectures to enable large-scale quantum information processing systems. So far, these efforts have been stymied by qubit inhomogeneities, low device yield and complex device requirements. Here we introduce a process for the high-yield heterogeneous integration of ‘quantum microchiplets’—diamond waveguide arrays containing highly coherent colour centres—on a photonic integrated circuit (PIC). We use this process to realize a 128-channel, defect-free array of germanium-vacancy and silicon-vacancy colour centres in an aluminium nitride PIC. Photoluminescence spectroscopy reveals long-term, stable and narrow average optical linewidths of 54 megahertz (146 megahertz) for germanium-vacancy (silicon-vacancy) emitters, close to the lifetime-limited linewidth of 32 megahertz (93 megahertz). We show that inhomogeneities of individual colour centre optical transitions can be compensated in situ by integrated tuning over 50 gigahertz without linewidth degradation. The ability to assemble large numbers of nearly indistinguishable and tunable artificial atoms into phase-stable PICs marks a key step towards multiplexed quantum repeaters 7 , 8 and general-purpose quantum processors 9 – 12 . An approach for integrating a large number of solid-state qubits on a photonic integrated circuit is used to construct a 128-channel artificial atom chip containing diamond quantum emitters.

Key Points Gene regulation in multicellular eukaryotes is complex, with many layers of regulation. Two fundamental mechanisms of gene regulation involve transcription factors and microRNAs, a large class of small, non-coding RNAs. It is widely believed that phenotypic evolution is closely linked to the evolution of gene regulation. To begin to understand the evolution of gene regulatory networks, it is important to first understand how the individual regulators and their regulatory interactions evolve. A combination of computational and experimental work has made it possible to begin to compare the evolution of transcriptional regulation with post-transcriptional regulation that is carried out by microRNAs. For both transcription factors and microRNAs, the regulators themselves seem to be well conserved over large evolutionary distances, whereas their targets seem to have evolved much more quickly, indicating that large-scale rewiring of regulatory networks has taken place in the course of evolution. In animal evolution, the acquisition of new microRNA families seems to have been much more rapid than the acquisition of new transcription-factor families. Several authors have proposed that new microRNA families have had important roles in the development of novel tissue types and organs. Ultimately, a comprehensive picture of gene-regulation evolution will require a unification of different regulatory mechanisms. As an initial step in this direction, we suggest a simple model that describes the transcription of new microRNA genes. A corollary of this model is that many microRNAs that are expressed at low levels and in specific spatio-temporal domains might have little biological function in regulating target genes in trans . Gene expression is regulated by an intricate interplay of many factors at different levels. To understand how the currently observed expression patterns have evolved, we need to understand the evolution of the individual regulators and the complex regulatory networks that they form. Changes in the patterns of gene expression are widely believed to underlie many of the phenotypic differences within and between species. Although much emphasis has been placed on changes in transcriptional regulation, gene expression is regulated at many levels, all of which must ultimately be studied together to obtain a complete picture of the evolution of gene expression. Here we compare the evolution of transcriptional regulation and post-transcriptional regulation that is mediated by microRNAs, a large class of small, non-coding RNAs in plants and animals, focusing on the evolution of the individual regulators and their binding sites. As an initial step towards integrating these mechanisms into a unified framework, we propose a simple model that describes the transcriptional regulation of new microRNA genes.

Research has shown mixed findings on the link between production diversity and household dietary diversity. The question is whether this link holds for children. In this study we examine the relationship between household’s agricultural production diversity and child dietary diversity, and between production diversity and child nutritional status. Smallholder farm households (n = 1067) and children (n = 1067) aged 3–16 years from two then nationally designated poverty counties in Gansu Province of China were interviewed in 2019. Production diversity was assessed with the production richness score and production diversity score. Production diversity was calculated from agricultural production data covering a period of 12 months. Child dietary diversity was assessed with food variety score (FVS) and dietary diversity score (DDS). DDS was calculated based on 9 food groups using a 30-day recall method. Data were analysed using Poisson and Probit regression models. We find that both agricultural production richness score and revenue generated from selling agricultural products are positively associated with food variety score, with the relationship being stronger for the latter. Moreover, production diversity score is positively associated with children’s dietary diversity score whereas negatively associated with their probability of being stunted, but not with their probabilities of being wasted or zinc deficient. Household social economics status were also positively associated with child dietary diversity.