ABSTRACT
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²
$FDGHPLFTXDOLILFDWLRQVRI3'EHQHILFLDULHV $Q LQHYLWDEOH FRQVHTXHQFH RI WKH DSSOLFDWLRQ RI D 3' SROLF\ LQ XQLYHUVLW\ DGPLVVLRQV LV WKDW FRQYHQWLRQDO PHDVXUHV RI WKH DFDGHPLF TXDOLILFDWLRQV RI LQFRPLQJVWXGHQWVOLNHVWDQGDUGL]HGWHVWVFRUHVZLOOEHORZHUIRU3'EHQHIL FLDULHVWKDQIRURWKHUDGPLWWHGVWXGHQWV²DQGLQGHHGORZHUWKDQWKRVHRIWKH QRQ85(*DSSOLFDQWVGLVSODFHGE\3' :KHUH3'SROLFLHVDUHDSSOLHG HQWU\ WHVWVFRUHVDUHDOVRDOPRVWFHUWDLQWREHORZHUIRUDOO85(*VWXGHQWVWKDQIRU DOO QRQ85(* VWXGHQWV %XW 3' SROLFLHV DUH E\ QRPHDQV WKH RQO\ IDFWRUV UHVSRQVLEOHIRUWKHIXOOH[WHQWRIWKHGLIIHUHQWLDOVREVHUYHGRQDYHUDJHEHWZHHQ 85(* DQG QRQ85(* VWXGHQWV HYHQ LQ WKH DEVHQFH RI 3' RQH ZRXOG H[SHFW WKHUH WREH VRPH VXFKGLIIHUHQWLDOVEHFDXVH85(*VWXGHQWV² LIRQO\ IRU VRFLRHFRQRPLF UHDVRQV ² DUH YDVWO\ XQGHUUHSUHVHQWHG LQ WKHXSSHUPRVW UHDFKHVRIWHVWVFRUHIUHTXHQF\GLVWULEXWLRQV ,Q WKH86FDVH WKHHYLGHQFHDW WKHXQGHUJUDGXDWH OHYHO VXJJHVWV WKDW$$
SROLFLHVDFFRXQWIRUDUHODWLYHO\VPDOOIUDFWLRQRIWKHZLGHO\GLVFXVVHGGLIIHUHQ WLDOVEHWZHHQDYHUDJHHQWU\WHVWVFRUHVRI85(*DQGQRQ85(*VWXGHQWV
0XFKRI WKHPDJQLWXGHRI WKHVH GLIIHUHQWLDOV FDQ EH DWWULEXWHG QRW RQO\ WR
GLIIHUHQFHV LQ WKH VKDSHRI WKH UHVSHFWLYH IUHTXHQF\GLVWULEXWLRQVEXW DOVR WR WKHIDFWWKDWWHVWVFRUHVDUHRQO\RQHRIPDQ\DGPLVVLRQVFULWHULD DQGVRPHRI WKHRWKHU UHOHYDQW FULWHULD DUH QRW KLJKO\ FRUUHODWHGZLWK WHVW VFRUHV $W WKH JUDGXDWH OHYHO KRZHYHU $$SROLFLHV DSSHDU OLNHO\ WRKDYHFRQWULEXWHGPRUH WR WKH GLIIHUHQWLDOV EHWZHHQ DYHUDJH HQWU\ WHVW VFRUHV RI 85(* DQG QRQ 85(*VWXGHQWV ,QWKH,QGLDQFDVH UHVHUYDWLRQSROLFLHVFOHDUO\DFFRXQW IRUD ODUJH IUDFWLRQ
RIWKHPDJQLWXGHRIDYHUDJHWHVWVFRUHGLIIHUHQWLDOV EHFDXVHWKH\DUHGHVLJQHG H[SOLFLWO\ WR DGPLW 85(* VWXGHQWV ZKRVH HQWU\ WHVW VFRUHV DUH QRW KLJK HQRXJKIRUWKHPWRJDLQDGPLVVLRQLQDJHQHUDOFRPSHWLWLRQZLWKRWKHUDSSOL FDQWV 0RUHRYHU ,QGLDQ 3' EHQHILFLDULHV WHQG WR HQWHU XQLYHUVLW\ SURJUDPV ZLWK DJUHDWHUKDQGLFDS LQ ORZHU DFDGHPLFTXDOLILFDWLRQV² DQG FRUUHVSRQG LQJO\SRRUHUSUHSDUDWLRQ IRUXQLYHUVLW\ VWXGLHV² WKDQ LV WKHFDVH LQ WKH86 7KHUHLVHYLGHQFHLQERWKWKH86DQG,QGLD KRZHYHU WKDWWKHHQWU\WHVWVFRUH JDSEHWZHHQ85(*DQGQRQ85(*VWXGHQWVKDVEHHQQDUURZLQJRYHU WKH SDVW IHZ GHFDGHV ,Q HDFK FRXQWU\ WKLV PD\ZHOO EH GXH WR WKH IDFW WKDW D JURZLQJSURSRUWLRQRI3'EHQHILFLDULHVDUHWKHFKLOGUHQRISDUHQWVZKRKDYH EHHQ DEOH WR LPSURYH WKHLU RZQ HGXFDWLRQDO DQG VRFLRHFRQRPLF VWDWXV E\ YLUWXHRI3'SROLFLHV LQHGXFDWLRQDQGRUHPSOR\PHQW 6HH&KDSWHU SS ² DQG&KDSWHU SS ²
&RVWVIURPVQRZEDOOLQJGHPDQGVIRUJURXSSUHIHUHQFHVFODLP 7KH FRPSDUDWLYH KLVWRU\ RI WKH GHYHORSPHQW RI 3' SROLFLHVPDNHV FOHDU WKDWGHPDQGVIRUJURXSSUHIHUHQFHVKDYHKDGDVWURQJWHQGHQF\WRVQRZEDOO LQ LQGHSHQGHQW ,QGLD VLQFH VXFK SUHIHUHQFHV IRU´EDFNZDUGµ JURXSVZHUH JLYHQ D FRQVWLWXWLRQDO EDVLV LQ 6& DQG 67 VWXGHQWV ZHUH JUDQWHG UHVHUYDWLRQVLQKLJKHUHGXFDWLRQDOLQVWLWXWLRQVDWERWKWKHQDWLRQDODQGWKH VWDWH OHYHOV IURP WKH HDUO\ V DQG LQ VXEVHTXHQW GHFDGHV 6& DQG 67 UHVHUYHGVHDWVZHUHLQIDFWLPSOHPHQWHGLQPRVWVXFKLQVWLWXWLRQV 5HVHUYHG VHDWVIRUVWXGHQWVIURPFHUWDLQ´ 2WKHU%DFNZDUG&ODVVHVµ 2%&VZHUHDOVR HVWDEOLVKHG E\ VRPH VWDWHV LQ WKH HDUO\ V 6LQFH WKHQ LQ UHVSRQVH WR JURZLQJGHPDQGVIURPRWKHU2%&JURXSV WKHVFRSHRIUHVHUYHGVHDWVIRU 2%& VWXGHQWV DW HGXFDWLRQDO LQVWLWXWLRQV DW WKH VWDWH OHYHO KDV EHHQ LQFUHDVLQJ²DOWKRXJKWKH0DQGDO&RPPLVVLRQUHFRPPHQGDWLRQVIRU2%& UHVHUYDWLRQV DW WKH QDWLRQDO OHYHO DUH EHLQJ LPSOHPHQWHG RQO\ LQ WKH HPSOR\PHQWVSKHUH 6HH&KDSWHU %\FRPSDULVRQZLWK,QGLD WKHVQRZEDOOLQJRIGHPDQGVIRUSUHIHUHQFHVKDV
EHHQUHPDUNDEO\OLPLWHGLQWKH86 LQKLJKHUHGXFDWLRQDODGPLVVLRQVDVZHOODV LQ RWKHU VSKHUHV ,W LV WUXH WKDW WKH LQWURGXFWLRQ RI $$ DGPLVVLRQ SROLFLHV IDYRULQJ$IULFDQ$PHULFDQV E\PDQ\FROOHJHVDQGXQLYHUVLWLHV LQ WKHV ZDV IROORZHG E\ WKH LPSOHPHQWDWLRQ RI VLPLODU SROLFLHV IDYRULQJ +LVSDQLF $PHULFDQVDQG1DWLYH$PHULFDQVLQWKHHDUO\V²LQUHVSRQVHWRSROLWLFDO SUHVVXUHIURPWKHODWWHUJURXSV 6LQFHWKHQ KRZHYHU WKHUHKDVKDUGO\EHHQD FDOO IURP DQ\ RWKHU XQGHUUHSUHVHQWHG RU GLVDGYDQWDJHG HWKQLF JURXS IRU D
IXUWKHUZLGHQLQJRI WKHERXQGDULHVRI HOLJLELOLW\ IRU DIILUPDWLYH DFWLRQ 6HH &KDSWHU
&RVWVIURPSRRUDFDGHPLFSHUIRUPDQFHDQGIUHTXHQWIDLOXUHRI3' EHQHILFLDULHVWRJUDGXDWHZLWKDGHJUHHFODLP 7KHUHLVDJUHDWGHDORIHYLGHQFHIURPWKH86WKDW85(*VWXGHQWVGRQRWGR DVZHOORQDYHUDJHDVQRQ85(*VWXGHQWVLQWHUPVRIFRQYHQWLRQDOPHDVXUHV RI DFDGHPLF SHUIRUPDQFH DW KLJKHU HGXFDWLRQDO LQVWLWXWLRQV ² ERWK DW WKH XQGHUJUDGXDWH DQG DW WKH JUDGXDWH OHYHOV 6LQFH$$ EHQHILFLDULHV DPRQJ WKH 85(*VWXGHQWVKDYHHQWHULQJDFDGHPLFFUHGHQWLDOVWKDWDUHORZHUWKDQWKRVH RIRWKHU85(*VWXGHQWV WKHLUDFDGHPLFSHUIRUPDQFHLVDOPRVWFHUWDLQO\LQIH ULRURQDYHUDJHWRWKDWRIWKHQRQEHQHILFLDU\85(*VWXGHQWV ,WIROORZVWKDW WKH JDS LQ DFDGHPLF SHUIRUPDQFH EHWZHHQ $$ EHQHILFLDULHV DQG $$ QRQ EHQHILFLDULHVLVJUHDWHUWKDQWKDWEHWZHHQ85(*DQGQRQ85(*VWXGHQWV 7KHIDFWWKDW$$EHQHILFLDULHVSHUIRUPUHODWLYHO\SRRUO\ KRZHYHU GRHVQRW
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² DQG DW UDWHV PXFK KLJKHU WKDQ WKRVH RI85(* VWXGHQWV DW QRQVHOHFWLYH FROOHJHV 7KH JUDGXDWLRQ UDWHV RI 85(*VWXGHQWVDW86SURIHVVLRQDOVFKRROVDUHRQO\VOLJKWO\ORZHUWKDQWKRVH RI WKHLU QRQ85(* SHHUV DQG WKHUH LV HYLGHQFH WKDW DPRQJ 85(* VWXGHQWV JUDGXDWLRQUDWHV IRU$$EHQHILFLDULHVDUHQRGLIIHUHQW WKDQWKH\DUH IRUQRQEHQHILFLDULHV 6HH&KDSWHU SS ² 7KHHYLGHQFHDYDLODEOHIURP,QGLDVKRZVWKDWWKHDYHUDJHDFDGHPLFSHUIRU
PDQFH RI 6& DQG 67 VWXGHQWV DOPRVW DOO RI ZKRP DUH EHQHILFLDULHV RI UHVHUYHG VHDWV LV GLVWLQFWO\ZRUVH WKDQ WKDW RI RWKHU VWXGHQWV DQG WKDW WKHLU JUDGXDWLRQ UDWHV WRR DUH FRQVLGHUDEO\ ORZHU WKDQ WKRVHRIRWKHU VWXGHQWV ,Q ERWKWKHVHUHVSHFWV ,QGLDQ3'EHQHILFLDULHVGRQRWGRDVZHOODV86EHQHIL FLDULHV 7KLVLVKDUGO\VXUSULVLQJ LQYLHZRIWKHIDFWWKDWWKHJDSVLQHQWHULQJ WHVW VFRUHVDQGDFDGHPLFSUHSDUDWLRQ²DVZHOODV WKHREVWDFOHV WRSXUVXLQJD GHJUHH SURJUDP WR FRPSOHWLRQ ² DUH VLJQLILFDQWO\ JUHDWHU IRU 6& DQG 67 VWXGHQWVLQ,QGLDWKDQIRU85(*VWXGHQWVLQWKH86 ,WDSSHDUV KRZHYHU WKDW WKHGLIIHUHQWLDOEHWZHHQWKHJUDGXDWLRQUDWHVRI6&67VWXGHQWVDQGWKRVHRI RWKHUVWXGHQWVLVQRWVRJUHDWLQ,QGLD·VHOLWHKLJKHUHGXFDWLRQDOLQVWLWXWLRQV² PDLQO\ EHFDXVH 6& DQG 67 VWXGHQWV LQ WKHVH LQVWLWXWLRQV DUHPRUH OLNHO\ WR UHPDLQ LQ VFKRRO IRU DQH[WUD\HDURUPRUH LQRUGHUXOWLPDWHO\ WRPHHW WKH UHTXLUHPHQWVIRUHDUQLQJDGHJUHH 7KHUHLVDOVRVRPHHYLGHQFHIURPUHODWLYHO\ VHOHFWLYHLQVWLWXWLRQVWKDWJUDGXDWLRQUDWHVIRU6&DQG67VWXGHQWVKDYHEHHQ
LPSURYLQJRYHUWLPH DVWKHHQWHULQJTXDOLILFDWLRQVRIWKHVHVWXGHQWVKDYHULVHQ DQGDV WKH LQVWLWXWLRQV WKHPVHOYHVKDYH IRXQGZD\V WR LPSURYH WKH VWXGHQWV· OHDUQLQJHQYLURQPHQW 6HH&KDSWHU SS ² :HPD\ FRQFOXGH WKDW WKH FODLP RI SRRU DFDGHPLF SHUIRUPDQFH E\ 3'
EHQHILFLDULHVLVYDOLGDWHGDJRRGGHDOPRUHVWURQJO\LQ,QGLDWKDQLQWKH86 ,Q ERWKFRXQWULHVWKHSHUIRUPDQFHRI3'EHQHILFLDULHVLVFOHDUO\SRRUHUWKDQWKDW RIQRQEHQHILFLDULHV EXWLWLVQRWVRFOHDUWKDWLWLVSRRUE\DEVROXWHVWDQGDUGV 7KHJUDGXDWLRQ UDWHVRI3'EHQHILFLDULHV LQ VHOHFWLYH86XQLYHUVLWLHV DQG LQ HOLWH,QGLDQLQVWLWXWLRQVGRQRWODJPXFKEHKLQGWKRVHRIRWKHUVWXGHQWV DQG WKHUHLVHYLGHQFHWKDWWKHGLIIHUHQWLDOKDVEHHQGHFOLQLQJRYHUWLPH
%HQHILWVFRVWVIURPDQLQFUHDVHGHFUHDVHLQWKHDYHUDJHDFDGHPLFTXDOLW\ RIVWXGHQWVHQUROOHGLQVHOHFWLYHXQLYHUVLWLHVFODLPYV FODLP )RUD3'SROLF\WRKDYHVXFFHHGHGLQLPSURYLQJWKHDFFXUDF\ZLWKZKLFK DSSOLFDQWTXDOLILFDWLRQVDUHDVVHVVHG 3'EHQHILFLDULHVPXVWSHUIRUPDWOHDVW DVZHOODV²LQGHHGVOLJKWO\EHWWHUWKDQ²WKRVHDSSOLFDQWVGLVSODFHGE\3' ZRXOGKDYHGRQH 7KH IDFW WKDW85(*VWXGHQWVGR VLJQLILFDQWO\ZRUVH LQ WHUPVRI FRQYHQWLRQDO DFDGHPLFSHUIRUPDQFH LQGLFDWRUV WKDQQRQ85(* VWXGHQWV DV VKRZQE\WKHHYLGHQFHGLVFXVVHGXQGHUWKHSUHYLRXVKHDGLQJ VXJJHVWVWKDWQHLWKHULQWKH86QRULQ,QGLDKDVWKLVGHPDQGLQJ´ FDWFKXSµ OHYHORIDFDGHPLFSHUIRUPDQFHEHHQDFKLHYHGE\3'EHQHILFLDULHV ,WLVWUXH WKDW SHUIRUPDQFH FRPSDULVRQV EHWZHHQ DOO 85(* VWXGHQWV DQG DOO QRQ 85(* VWXGHQWVPD\QRW DFFXUDWHO\ UHIOHFW WKHSHUIRUPDQFHJDSEHWZHHQ ´UHWURVSHFWLYHO\ UHMHFWHGµ DQG´UHWURVSHFWLYHO\ DGPLWWHGµ VWXGHQWV EHFDXVH WKHODWWHUVXEJURXSVDUHOLNHO\WREHFRQFHQWUDWHGDWWKHORZHUHQGRIWKHLU UHVSHFWLYH JURXSV LQ WHUPV RI DFDGHPLF SHUIRUPDQFH +RZHYHU WKHUH LV JRRGUHDVRQWREHOLHYHWKDWHYHQWKHODWWHUJDSUHPDLQVVLJQLILFDQWLQERWK FRXQWULHV ,Q WKH 86 VWXGLHV RI XQGHUJUDGXDWH DFDGHPLF SHUIRUPDQFH LQGLFDWH WKDW
ORZHU*3$VIRU%ODFNVWXGHQWVRQDYHUDJHDUHQRWH[SODLQDEOHVLPSO\LQWHUPV RIWKHLUORZHUDYHUDJHHQWU\WHVWVFRUHV %ODFNVWXGHQWVWHQGWR´ XQGHUSHUIRUPµ DFDGHPLFDOO\QRWRQO\UHODWLYHWRRWKHUVWXGHQWVEXWDOVRUHODWLYHWRZKDWZRXOG EH SUHGLFWHG RQ WKH EDVLV RI WKHLU RZQ DYHUDJH 6FKRODVWLF $SWLWXGH RU $VVHVVPHQW7HVW6$7VFRUHV 7KLVVXJJHVWVWKDWWKHWUXHSRWHQWLDORI3'EHQH ILFLDULHVIRUJRRGDFDGHPLFSHUIRUPDQFHLVQRWXQGHUYDOXHGE\WKHFRQYHQWLRQDO TXDOLILFDWLRQLQGLFDWRUV DQGWKDW85(*VWXGHQWVDGPLWWHGUHWURVSHFWLYHO\ZLWK ORZHU6$7VFRUHVWKDQWKHQRQ85(*DSSOLFDQWVWKH\GLVSODFHZLOORQDYHUDJH SHUIRUP OHVVZHOO 6HH&KDSWHU SS ²1R VXFKHYLGHQFH LV DYDLODEOH IURP,QGLD EXWWKHIDFWWKDW6&DQG67EHQHILFLDULHVRIUHVHUYHGVHDWVGLVSODFH RWKHU DSSOLFDQWVZLWK VLJQLILFDQWO\ KLJKHU HQWHULQJ WHVW VFRUHV ² DQG HYLGHQFH VKRZVWKDWDFDGHPLFSHUIRUPDQFHGRHVFRUUHODWH VRPHZKDWZLWKHQWHULQJWHVW VFRUHV²VXJJHVWVWKDWWKHDFDGHPLFSHUIRUPDQFHRI3'EHQHILFLDULHVLVJHQHUDOO\ ORZHU WKDQ WKDWRI WKHUHWURVSHFWLYHO\DGPLWWHGDSSOLFDQWVDVZHOODV WKDWRIDOO QRQ85(*VWXGHQWV 6HH&KDSWHU SS ²
7KH JDS LQ SHUIRUPDQFH EHWZHHQ 85(* DQG QRQ85(* VWXGHQWV LV FRQVLGHUDEO\ OHVV LQ SRVWXQLYHUVLW\ FDUHHU DFKLHYHPHQWV WKDQ LQ ZLWKLQ XQLYHUVLW\ FRQYHQWLRQDOO\ PHDVXUHG DFDGHPLF SHUIRUPDQFH DQG WKH VDPH LV DOPRVWVXUHO\WUXHDVEHWZHHQWKHUHWURVSHFWLYHO\UHMHFWHGDQG UHWURVSHFWLYHO\ DGPLWWHG VXEVHWVRI WKHVH VWXGHQWV 6HH&KDSWHU SS ² DQG&KDSWHU SS ²7KLVVXJJHVWVHLWKHUWKDW85(*FDWFKXSSURJUHVVHVIXUWKHU DIWHU XQLYHUVLW\ VWXGLHV RU WKDW FRQYHQWLRQDO ZLWKLQXQLYHUVLW\ SHUIRUPDQFH PHDVXUHV XQGHUVWDWHZKDW85(* VWXGHQWV DUH DFWXDOO\ JDLQLQJ IURP KLJKHU HGXFDWLRQ 2QH VKRXOG WKHUHIRUH EH FDXWLRXV LQ UHO\LQJ RQ FRQYHQWLRQDO SHUIRUPDQFH LQGLFDWRUV ,W VHHPV VDIH WR FRQFOXGH QRQHWKHOHVV WKDW WKH HYLGHQFHIURPERWKWKH86DQG,QGLDUHMHFWVFODLPDQGVXSSRUWVFODLP ²WRWKHHIIHFWWKDW3'SROLFLHVORZHUWKHDYHUDJHDFDGHPLFTXDOLW\RIVWXGHQWV DGPLWWHGWRVHOHFWLYHXQLYHUVLWLHV
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² (YLGHQFH IURP,QGLDOHDYHVOLWWOHGRXEWWKDWWKHYDVWPDMRULW\RI6&DQG67EHQHILFLDULHV RI,QGLD·VUHVHUYDWLRQSROLFLHVLQXQLYHUVLW\DGPLVVLRQVGRLQGHHGFRPHIURPD ´FUHDP\OD\HUµ RIWKH'DOLWDQG$GLYDVLSRSXODWLRQ LWFRXOGKDUGO\EHRWKHU ZLVH JLYHQWKHLPPHQVHREVWDFOHVIDFHGE\WKHSRRULQDQ\HIIRUWWRSHUVLVWLQ VFKRROWKURXJKKLJKHUHGXFDWLRQ 7KHUHLVDOVRPXFKHYLGHQFHWKDW3'EHQHIL FLDULHVLQ,QGLDWHQGWRFRPHGLVSURSRUWLRQDWHO\IURPWKHEHWWHURIIFDVWHVDQG WULEHVZLWKLQWKH6&DQG67FDWHJRULHV %XWWKHUHLVYHU\OLWWOHHYLGHQFHRQWKH EDVLVRIZKLFKWRGHWHUPLQHZKHWKHUUHVHUYDWLRQSROLFLHVKDYHEHQHILWHGZHOO RII'DOLWVDQG$GLYDVLVDWWKHH[SHQVHRIOHVVZHOORIIXQLYHUVLW\DSSOLFDQWVIURP WKHUHVWRIWKHSRSXODWLRQ 6HH&KDSWHU SS ² :HFDQFRQFOXGHWKDW3'SROLFLHVLQERWKWKH86DQG,QGLDKDYH DWOHDVW
LQ WHUPV RI WKHLU GLUHFW LPSDFW LQFUHDVHG LQHTXDOLWLHV ZLWKLQ WKH 85(* SRSXODWLRQFODLP ,QWKH86WKH\GRQRWDSSHDUWRKDYHLQFUHDVHGRYHUDOO LQHTXDOLWLHV DQGLQ,QGLDWKHMXU\LVVWLOORXWRQWKLVTXHVWLRQFODLP
&RVWVIURP3'EHQHILFLDULHVEHLQJZRUVHRIIZKHQJDLQLQJDGPLVVLRQ YLDDSUHIHUHQFHFODLP 7R GHWHUPLQH ZKHWKHU RU QRW WKHUH LV HPSLULFDO VXSSRUW IRU WKLV VWURQJ PLVPDWFK FODLP RQH PXVW LQ SULQFLSOH FRPSDUH WKH DFWXDO FDUHHU DFKLHYH PHQWVRI3'EHQHILFLDULHVZLWKWKHFDUHHUDFKLHYHPHQWVWKDWWKHVDPH85(*
VWXGHQWVZRXOGKDYH UHDOL]HGKDG WKH\QRWEHQHILWHG IURPD3'SROLF\²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² DQG&KDSWHU SS ² 7KHUH KDYH EHHQ QR FRPSDUDEO\ VRSKLVWLFDWHG VWXGLHV RI WKH ZD\ LQ
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
6HH&KDSWHU SS ²DQG²
%HQHILWVIURPVSUHDGLQJVRFLDOFDSLWDO JUHDWHURIIVHWWLQJRI85(* VWXGHQWGHILFLWVLQVRFLDOFDSLWDO DQGJUHDWHURYHUDOOEHQHILWVIURPVRFLDO FDSLWDOFODLPVDQG 6RPHRI WKHHYLGHQFHDOUHDG\GLVFXVVHGDERYHEHDUVGLUHFWO\RQ WKHFODLP WKDW 3'SROLFLHV JHQHUDWH EHQHILWV E\ VSUHDGLQJ VRFLDO FDSLWDO ZKLFK LV OLNHO\ WR EH SURYLGHGRQDVLJQLILFDQWVFDOHRQO\E\UHODWLYHO\VHOHFWLYHHGXFDWLRQDOLQVWLWXWLRQV
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²
%HQHILWVIURPLQWHJUDWLQJVRFLHW\·VHOLWH PRUHRSSRUWXQLWLHVIRU85(* PHPEHUVRIIHUHGE\85(*GHFLVLRQPDNHUV PRUHLQVSLUDWLRQRI 85(*\RXWKE\85(*UROHPRGHOVDQGPHQWRUV EHWWHUSHUIRUPDQFH RIPXOWLFXOWXUDOO\VHQVLWLYHMREV DQGJUHDWHUFRQWULEXWLRQVRI FRPPXQLW\RULHQWHGVHUYLFHFODLPV DQG 3' SROLFLHV LQ KLJKHU HGXFDWLRQ FDQ JHQHUDWH EHQHILWV DVVRFLDWHG ZLWK WKH LQWHJUDWLRQRIVRFLHW\·VHOLWHLQVRIDUDVWKH\HQDEOHJUHDWHUQXPEHUVRI85(* PHPEHUV WR MRLQ WKDWHOLWH VR LW LV WKRVH3'SROLFLHVDIIHFWLQJDGPLVVLRQV WR WKHPRUHHOLWH DQGYHU\ VHOHFWLYHKLJKHUHGXFDWLRQDO LQVWLWXWLRQV WKDWDUHDW LVVXHKHUH ,KDYHDOUHDG\DGGXFHGHYLGHQFHWKDW3'SROLFLHVKDYHVXEVWDQWLDOO\ LQFUHDVHGDGPLVVLRQVRI85(*DSSOLFDQWVWRVXFKLQVWLWXWLRQVERWKLQWKH86 DQG,QGLD DQGWKDWWKH85(*EHQHILFLDULHVRI3'SROLFLHVLQHOLWHLQVWLWXWLRQV KDYH ² IRU WKHPRVW SDUW ² GRQHZHOO HQRXJK LQ WKHLU GHJUHH SURJUDPV WR JUDGXDWH 9DOLGDWLRQRIWKHFODLPVRIEHQHILWVHQVXLQJIURPJUHDWHULQWHJUDWLRQ RIVRFLHW\·VHOLWHFDOOVIRUHYLGHQFHWKDWODUJHQXPEHUVRIWKHVH3'EHQHILFLD ULHV KDYH LQGHHG MRLQHG WKH HOLWH DQG HYLGHQFH WKDW WKH\ KDYH EHHQ
LQVWUXPHQWDO LQJHQHUDWLQJPRUHRIWKHVSHFLILFW\SHVRIEHQHILWVWKDQZRXOG RWKHUZLVHKDYHEHHQSRVVLEOH 7KHUHLVPXFKHYLGHQFHIURPWKH86WKDW85(*VWXGHQWVLQJHQHUDO DQG
3'EHQHILFLDULHVLQSDUWLFXODU KDYHJRQHRQIURPVHOHFWLYHFROOHJHVWRSXUVXH VXFFHVVIXOFDUHHUVLQHVWHHPHGSRVLWLRQV 6WXGLHVKDYHVKRZQWKDW%ODFNVJRRQ WRHDUQDGYDQFHGGHJUHHVDWDERXWWKHVDPHUDWHDV:KLWHV²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² $VXVXDO WKHUHLVPXFKOHVVHYLGHQFHIURP,QGLD IRUWKHUHKDYHEHHQYHU\
IHZVWXGLHVDWWHPSWLQJWRWUDFHWKHSRVWXQLYHUVLW\FDUHHUVRIHQWHULQJFRKRUWV RIVWXGHQWVDW,QGLDQKLJKHUHGXFDWLRQDOLQVWLWXWLRQV 7KHIHZVWXGLHVWKDWKDYH DFWXDOO\EHHQGRQHVXJJHVWWKDW85(*VWXGHQWVZKRJUDGXDWHIURPUHODWLYHO\ HOLWHLQVWLWXWLRQVWHQGWRHQGXSLQUHVSRQVLEOHDQGZHOOSD\LQJSRVLWLRQV W\SL FDOO\DWWDLQLQJDPXFKKLJKHUVRFLRHFRQRPLFVWDWXVWKDQWKHLUSDUHQWV²DOEHLW QRWDVKLJKDV WKDWRI WKHLUQRQ85(*SHHUV 6HH&KDSWHU SS ² $OWKRXJK WKH HYLGHQFH WKDW 3' EHQHILFLDULHV KDYH HQWHUHG VRFLHW\·V HOLWH LQ ODUJHQXPEHUVLVPRUHSOHQWLIXODQGFRQVLGHUDEO\VWURQJHULQWKH86WKDQLQ ,QGLD WKHUH FDQ KDUGO\ EH DQ\ TXHVWLRQ WKDW 3' SROLFLHV KDYH VLJQLILFDQWO\ LQFUHDVHG WKH UHSUHVHQWDWLRQ RI 85(* PHPEHUV LQ WKH XSSHU VRFLR HFRQRPLFHFKHORQVRIERWKFRXQWULHV 7KHUH LV QRW PXFK KDUG HYLGHQFH IURP HLWKHU FRXQWU\ WKDW VSHDNV
GLUHFWO\ WR WKH H[WHQW WR ZKLFK 85(*PHPEHUV RI VRFLHW\·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²
)RU,QGLDWKHUHLVVFDWWHUHGHYLGHQFHWKDW6&DQG67VWXGHQWVDUHPRUHOLNHO\ WKDQRWKHU VWXGHQWV WRPDNH VHUYLFH FRQWULEXWLRQV OHVV OLNHO\ WR SXUVXHSXUHO\ PDWHULDOLVWLFJRDOV DQGPRUHOLNHO\WRSXUVXHFDUHHUVLQZD\VLQZKLFKWKH\FDQ EHKHOSIXO WRPHPEHUVRI FRPPXQLWLHV LQQHHG 6HH&KDSWHU SS ² 7KH HYLGHQFH WKDW85(*PHPEHUV LQERWK WKH86 DQG ,QGLDGR FRQWULEXWH VLJQLILFDQWXQUHPXQHUDWHGVHUYLFHVWRWKHLUFRPPXQLWLHVLQGLFDWHVWKDW²FRQWUDU\ WRWKHMDXQGLFHGYLHZRIVRPHFULWLFV²WKH\DUHLQGHHGUHGLVWULEXWLQJVRPHRI WKHEHQHILWVRI WKHLUSUHIHUHQWLDO DFFHVV WRDJRRGKLJKHUHGXFDWLRQUDWKHU WKDQ DOORZLQJWKHOXUHRISHUVRQDOJDLQWRUHPRYHDQ\VHQVHRIREOLJDWLRQWRRWKHUV
%HQHILWVIURPJUHDWHUVWXGHQWGLYHUVLW\ EHWWHUOHDUQLQJRIDFDGHPLF VXEMHFWVDQGEHWWHUDELOLW\WRIXQFWLRQLQDPXOWLFXOWXUDOVRFLHW\FODLPV DQG 7KHUHLVSOHQW\RIHYLGHQFHWKDW$$SROLFLHVLQDGPLVVLRQVKDYHVLJQLILFDQWO\ LQFUHDVHG UDFLDOHWKQLF GLYHUVLW\ DPRQJ VWXGHQWV LQ VHOHFWLYH FROOHJHV DQG LQ JUDGXDWHDQGSURIHVVLRQDOVFKRROVLQWKH86 ,QWKHFDVHRIQRQVHOHFWLYHLQVWL WXWLRQV WKHVH SROLFLHV KDYHPDLQO\ DIIHFWHGZKLFK85(* VWXGHQWV HQUROO ² QRWWKHLURYHUDOOQXPEHU 6HH&KDSWHU SS ²,Q,QGLD WKHUHLVVWURQJ HYLGHQFH WKDW UHVHUYDWLRQ SROLFLHV LQ DGPLVVLRQV KDYH VLJQLILFDQWO\ LQFUHDVHG HQUROOPHQWRI6&DQG67VWXGHQWVLQVHOHFWLYHKLJKHUHGXFDWLRQDOLQVWLWXWLRQV LQGHHG WKHUH ZRXOG RWKHUZLVH KDUGO\ KDYH EHHQ DQ\ 6& DQG 67 VWXGHQWV DWWHQGLQJWKHPRVWHOLWHLQVWLWXWLRQV $OWKRXJKWKHUHLVOHVVGLUHFWHYLGHQFHLQ WKH FDVH RI QRQVHOHFWLYH LQVWLWXWLRQV LW LV TXLWH FOHDU WKDW 3' SROLFHV KDYH HQFRXUDJHG ODUJHU QXPEHUV RI 6& DQG 67 VWXGHQWV WR HQUROO WKDQ ZRXOG RWKHUZLVHKDYHEHHQWKHFDVH 6HH&KDSWHU SS ² 6WXGLHV RI WKH LPSDFW RI JUHDWHU UDFLDOHWKQLF GLYHUVLW\ RQ HGXFDWLRQDO
RXWFRPHVKDYHRQO\EHHQFDUULHGRXWLQWKH86 DQGPRVWRIWKHVWXGLHVDUHRI IDLUO\UHFHQWYLQWDJH 7KHILQGLQJVIURPWKLVUHVHDUFKUHPDLQSUHOLPLQDU\ PRUH UHVHDUFKZLOOQHHG WREHGRQHEHIRUHGHILQLWLYHFRQFOXVLRQV FDQEH UHDFKHG 7KHUH LV KRZHYHU VRPH KLJKO\ VXJJHVWLYH ² LI FRQWHVWHG ² HYLGHQFH WKDW VWXGHQWV· DFDGHPLF OHDUQLQJ DQG WKHLU DELOLW\ WR IXQFWLRQZHOO LQ DPXOWLFXO WXUDO VRFLHW\ DUH LQGHHG LPSURYHGE\ JUHDWHU VWXGHQW GLYHUVLW\ 6XFKSRVLWLYH RXWFRPHVDSSHDUWRUHTXLUH LQIRUPDO LQWHUHWKQLFVWXGHQW LQWHUDFWLRQV LQVLGH DQGRXWVLGHRI WKHFODVVURRP RIDNLQGWKDWDUHPRUH OLNHO\ WR WDNHSODFH LQ 86WKDQLQ,QGLDQXQLYHUVLW\VHWWLQJV 6HH&KDSWHU SS ²
&RVWVIURPWKHGHYDOXDWLRQRI85(*VWXGHQWDFFRPSOLVKPHQWV XQGHUDSSUHFLDWLRQRIWUXHFDSDELOLWLHVDQGDFKLHYHPHQWVRIVRPH 85(*VWXGHQWV VWLJPDWL]DWLRQRI85(*VWXGHQWVDVQRWEHORQJLQJ RQFDPSXV DQGORZIDFXOW\H[SHFWDWLRQVIRU85(*VWXGHQWVFODLPV DQG 7KHUHFDQEHQRGRXEWWKDW LQERWKWKH86DQG,QGLD PDQ\85(*VWXGHQWV DUH VWLJPDWL]HGE\ WKHSUHVXPSWLRQ WKDW WKHLUHQUROOPHQWDWDKLJKHUHGXFD
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
SKHQRPHQDRIVWLJPDWL]DWLRQRI85(*VWXGHQWVDVQRWEHORQJLQJRQFDPSXV DQG ORZ IDFXOW\ H[SHFWDWLRQV IRU 85(* VWXGHQWV %XW DW VHOHFWLYH KLJKHU HGXFDWLRQDOLQVWLWXWLRQVLQERWKWKH86DQG,QGLD RQHRIWHQKHDUVFRPSODLQWV XVXDOO\IURPQRQ85(*VWXGHQWVWKDW85(*VWXGHQWV SUHVXPHGWREH3' EHQHILFLDULHV GR QRW UHDOO\ EHORQJ RQ FDPSXV $W OHDVW LQ WKH86 RQH DOVR KHDUV FKDUJHV WKDW IDFXOW\ LQ VXFK LQVWLWXWLRQV GLVVHUYH 85(* VWXGHQWV E\ KROGLQJ ORZ H[SHFWDWLRQV IRU WKHP DQG WKXV E\ SDWURQL]LQJ WKHP 6HH &KDSWHU SS ²,QQHLWKHURIWKHVHFDVHV KRZHYHU LVWKHUHHYLGHQFHWR GHWHUPLQH WKH H[WHQW WR ZKLFK WKHVH YLHZV DUH DWWULEXWDEOH WR 3' SROLFLHV UDWKHUWKDQWRDJHQHUDOSUHGLOHFWLRQWRZDUGQHJDWLYHVWHUHRW\SLQJRI85(* VWXGHQWV
&RVWVIURPGHFHLWIXOHIIRUWVWRFODLP85(*VWDWXVLQRUGHUWRJDLQ UHVXOWLQJEHQHILWVFODLP ,Q ,QGLD WKHUH LV ZLGHVSUHDG VXVSLFLRQ DQG VRPH DQHFGRWDO HYLGHQFH WKDW PDQ\VWXGHQWVIURPJURXSVLQHOLJLEOHIRUUHVHUYHGVHDWVLQHGXFDWLRQDOLQVWLWX WLRQVKDYHVXFFHHGHGLQDFTXLULQJGRFXPHQWVDWWHVWLQJWRWKHLUPHPEHUVKLSRI DQHOLJLEOHJURXS 7KHUH LVQRKDUGHYLGHQFHRQWKHEDVLVRIZKLFKWRGHWHU PLQHKRZVLJQLILFDQWWKLVSKHQRPHQRQUHDOO\LV EXWWKHUHFDQEHOLWWOHGRXEW WKDWLWH[LVWV 6HH&KDSWHU SS ² ,QWKH86 DSSOLFDQWV IRUDGPLVVLRQ VLPSO\GHFODUHWKHLURZQUDFLDOHWKQLFVWDWXV VRLWLVTXLWHSRVVLEOHWRVXFFHHG LQ IDOVLI\LQJ WKDW VWDWXV LI RQH·V DSSHDUDQFH GRHV QRW PDNH LW REYLRXV 7KLV PHDQV WKDW VXFK GHFHLW LV PRVW OLNHO\ WR RFFXU ZKHQ DQ DSSOLFDQW LV OLJKW VNLQQHGEXWFODLPVVRPH+LVSDQLFRU1DWLYH$PHULFDQKHULWDJH 7KHUHLVVRPH DQHFGRWDOHYLGHQFHRIIDOVHFODLPVRIWKLVVRUW EXWWKHSKHQRPHQRQGRHVQRW DSSHDUWREHZLGHVSUHDGDQGLVVXUHO\OHVVVLJQLILFDQWWKDQLQ,QGLD
:LWKUHVSHFWWRWKHUHPDLQLQJFODLPVRIEHQHILWVRUFRVWVIURP3'SROLFLHV WREH DGGUHVVHGEHORZ SHUWLQHQWGLUHFWHYLGHQFHIURPWKH86DQG,QGLDQH[SHULHQFHV
ZLWKSRVLWLYHGLVFULPLQDWLRQLQDGPLVVLRQVWRKLJKHUHGXFDWLRQDOLQVWLWXWLRQVGRHV QRW \HW H[LVW ,Q WKH FDVH RI VRPH FODLPV UHOHYDQW GLUHFW HYLGHQFH PD\ \HW EHFRPHDYDLODEOHDVDUHVXOWRIQHZUHVHDUFKHIIRUWV LQRWKHUFDVHV WKHFKDOOHQJHV FRQIURQWLQJ V\VWHPDWLF UHVHDUFK LQWR WKH YDOLGLW\ RI WKH FODLPV DV GHWDLOHG LQ &KDSWHU SS ²PD\EHWRRIRUPLGDEOHWRRYHUFRPH 2QHFDQ QRQHWKH OHVV GUDZ D IHZ YHU\ WHQWDWLYH FRQFOXVLRQV DERXW WKH YDOLGLW\ RI VRPH RI WKH UHPDLQLQJFODLPVRIFRVWVDQGEHQHILWVRQWKHEDVLVRISDUWLDORULQGLUHFWHYLGHQFH ²DVLQWKHIROORZLQJSDUDJUDSKV
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²XQOLNHWKHGLUHFWO\FRQIOLFWLQJFODLPVWRZKLFK WKH\DUHUHODWHG
%HQHILWVIURPLQWHJUDWLQJVRFLHW\·VHOLWH PRUHGLVSHOOLQJRIQHJDWLYH VWHUHRW\SHVRI85(*PHPEHUVFODLP DQGFRVWVRIPLVPDWFKLQJ 85(*VWXGHQWVDQGDFDGHPLFLQVWLWXWLRQV H[DFHUEDWLRQRIQHJDWLYH VWHUHRW\SHVRI85(*PHPEHUVFODLP 7KHYDOLGLW\RI WKHVHFODLPVFDQEHSDUWLDOO\DQGLQGLUHFWO\ WHVWHGE\FRQVLG HULQJ HYLGHQFH RQ UHODWHG FODLPV DVVRFLDWHG ZLWK WKH DUJXPHQWV RQ ZKLFK HDFKFODLPLVEDVHG ,QH[SORULQJFODLPV²EDVHGRQWKH LQWHJUDWLRQRI VRFLHW\·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²HYHQYHU\WHQWDWLYHO\²DERXWWKH YDOLGLW\RIFODLPHLWKHULQWKH86RULQ,QGLD
%HQHILWVIURPDIILUPLQJVRFLHW\·VFRPPLWPHQWWRUHGXFHFRQWLQXLQJ GLVDGYDQWDJHVRI85(*PHPEHUVFODLP EHQHILWVIURP VWUHQJWKHQLQJWKHOHJLWLPDF\RIVRFLHW\·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
7DEOHV DQG GLVSOD\ LQ DEEUHYLDWHG IRUP DOO RI WKH VXPPDUL]HG HYLGHQFH IURPWKH86DQG,QGLDRQHDFKRI WKHFODLPVERWK IRUDQGDJDLQVW SRVLWLYHGLVFULPLQDWLRQLQDGPLVVLRQVWRKLJKHUHGXFDWLRQDOLQVWLWXWLRQV ´<HVµ RU´ QRµ LQGLFDWHVZKHWKHURUQRWWKHHYLGHQFHVXSSRUWVWKHFODLP ,IWKHZRUG LV FDSLWDOL]HG WKH HYLGHQFH LV UHODWLYHO\ VWURQJ RWKHUZLVH WKH HYLGHQFH LV ZHDNHUDQGPRUHGLVSXWDEOH 3DUHQWKHVHVLQGLFDWHWKDWWKHHYLGHQFHLVLQFRP SOHWH RU LQGLUHFW VR WKDW WKH FODLP LV RQO\ YHU\ WHQWDWLYHO\ VXSSRUWHG RU UHMHFWHG
6XSSOHPHQWDU\LQVLJKWVLQWRWKHFRQVHTXHQFHVRI3' SROLFLHVLQXQLYHUVLW\DGPLVVLRQV (PSLULFDOHYLGHQFHRQWKHFRQVHTXHQFHVRI3'SROLFLHVLQKLJKHUHGXFDWLRQ FDQXVHIXOO\EHVXSSOHPHQWHGE\DSULRULUHDVRQLQJ 6XFKUHDVRQLQJHQDEOHVXV WRGUDZVRPHFRQFOXVLRQVDERXWWKHYDOLGLW\RIVRPHRIWKHFODLPVRIEHQHILWV DQGFRVWVIURP3'SROLFLHV LIQRWDERXWWKHLUPDJQLWXGH &RQVLGHU IRUH[DPSOH WKHODVWWKUHHKLJKO\TXDOLWDWLYHFODLPVDGGUHVVHGLQ
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·VHWKQLFJURXSLGHQWLW\DQGWKHUHE\FRQWULEXWHLQVRPHPHDVXUHWR LGHQWLW\JURXSSROLWLFVWKDWDUHSRWHQWLDOO\GLYLVLYH ,Q7DEOHVDQG , KDYH HQWHUHG WKH V\PERO´ µ WR LQGLFDWH WKDW WKHVH WZRRI WKH TXDOLWDWLYH FODLPVDUHDOPRVWFHUWDLQO\YDOLG DOWKRXJKZHFDQQRWVD\DQ\WKLQJDERXWWKH PDJQLWXGHRIWKHDVVRFLDWHGEHQHILWVDQGFRVWVHLWKHULQWKH86RULQ,QGLD :KDW DERXW WKH WKLUG TXDOLWDWLYH FODLP"2QHPLJKW SUHVXSSRVH WKDW LQ D
PXOWLFXOWXUDOVRFLHW\LQZKLFKHWKQLFGLIIHUHQFHVDUHVDOLHQW JUHDWHUUHSUHVHQ WDWLRQRI85(*VDPRQJVRFLHW\·VOHDGHUVZRXOGVWUHQJWKHQWKHOHJLWLPDF\RI VRFLHW\·VOHDGHUVKLS 7KLVLVLQGLVSXWDEO\VR LQWKHH\HVRIPRVWPHPEHUVRIWKH DIIHFWHG85(*V ,W LV DOVRSRVVLEOH KRZHYHU WKDW3'SROLFLHVFRXOG WHQG WR HURGH WKH OHJLWLPDF\ RI VRFLHW\·V OHDGHUVKLS LQ WKH H\HV RI QRQ85(* PHPEHUV :KHWKHUWKHRYHUDOOLPSDFWRI3'LQWKLVFDVHLVIDYRUDEOHRUXQID YRUDEOHLVWKHUHIRUHLQGHWHUPLQDWHRQWKHRUHWLFDOJURXQGV $ SULRUL UHDVRQLQJ GHYHORSHG LQ &KDSWHU FDQ SURYLGH VRPH IXUWKHU
LQVLJKWV LQWR WKH YDOLGLW\ DQG VLJQLILFDQFH RI VRPH RI WKH FODLPV IRU ZKLFK HPSLULFDOHYLGHQFHLVDYDLODEOH 7KXV RQWKHEDVLVRIWKHDYDLODEOHHYLGHQFH , FRQFOXGHG HDUOLHU WKDW RQH VKRXOG UHMHFW ERWK LQ WKH 86 DQG LQ ,QGLD WKH FODLPFODLP WKDW3'SROLFLHV²E\ LPSURYLQJ WKHDFFXUDF\ZLWKZKLFK
DSSOLFDQWTXDOLILFDWLRQVDUHDSSUDLVHG² LQFUHDVH WKHDYHUDJHDFDGHPLFTXDOLW\ RI HQUROOHG VWXGHQWV %XW WKHRUHWLFDO FRQVLGHUDWLRQV VXJJHVW WKDW WKLV FODLP FRXOGEHYDOLGDWHGXQGHUFHUWDLQFLUFXPVWDQFHV ,QSDUWLFXODU DKLJKO\VHQVLWLYH DQG QXDQFHG 3' SROLF\ RU D ZHOOFUDIWHG PXOWLYDULDWH UHJUHVVLRQ DQDO\VLV FRXOG SRVVLEO\ LGHQWLI\ KLJK SRWHQWLDO LQ FRQYHQWLRQDOO\ XQGHUTXDOLILHG 85(*DSSOLFDQWVDQGWKHUHE\JHQHUDWHEHQHILWVIURPLPSURYLQJWKHDFFXUDF\ RIDSSOLFDQWDSSUDLVDO 6HH&KDSWHU SS ² 7KHDYDLODEOHHPSLULFDOHYLGHQFHIURPWKH86DQG,QGLDSURYLGHVRQO\YHU\
OLPLWHGVXSSRUWIRUWKHFODLPFODLPWKDW3'SROLFLHVJHQHUDWHEHQHILWVE\ PRWLYDWLQJ85(*VWXGHQWVWRGHYHORSPRUHDVVLGXRXVO\WKHLUKXPDQFDSLWDO DQGLWGRHVQRWHQDEOHRQHWRUHMHFWWKHDOWHUQDWLYHFODLPFODLPWKDW3' SROLFLHVDFWXDOO\IRVWHUFRPSODFHQF\LQWKLVUHVSHFW 7KHRUHWLFDODQDO\VLVRIWKH SD\RIIWRDFDGHPLFHIIRUWE\85(*VWXGHQWVVKRZV KRZHYHU WKDW3'SROL FLHVDUHIDUPRUHOLNHO\WRFDXVHSRWHQWLDO85(*DSSOLFDQWVIRUDGPLVVLRQ²DV ZHOO DV HQUROOHG 85(* VWXGHQWV ²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² 2Q WKH FRQWULEXWLRQ RI GLYHUVLW\ WR HGXFDWLRQDO RXWFRPHV WKHUH LV XVHIXO
HYLGHQFH RQO\ IURP WKH 86 RQ WKH EDVLV RI ZKLFK , FRQFOXGHG HDUOLHU WKDW FODLPV RI EHQHILWV IURP EHWWHU VWXGHQW DFDGHPLF OHDUQLQJ DQG EHWWHU VWXGHQW DELOLW\ WR IXQFWLRQ LQ D PXOWLFXOWXUDO VRFLHW\ DUH DW OHDVW ZHDNO\ VXSSRUWHG 7KHRUHWLFDO UHDVRQLQJ VXJJHVWV WKDW HWKQLF GLYHUVLW\ LV UDWKHU PRUH OLNHO\ WR JHQHUDWHEHQHILWVRIWKHVHFRQGW\SH ,WVWDQGVWRUHDVRQWKDWWKHH[SHULHQFHRI HWKQLFGLYHUVLW\LQDKLJKHUHGXFDWLRQDOVHWWLQJZLOOFRQWULEXWHWRVRPHH[WHQWWR RQH·VDELOLW\WROLYHDQGZRUNFRQVWUXFWLYHO\LQDQHWKQLFDOO\GLYHUVHVRFLHW\ ,WLV KDUGHU WR VHHZK\ HWKQLFGLYHUVLW\ VKRXOG LPSURYH D VWXGHQW·V DELOLW\ WR OHDUQ DFDGHPLFVXEMHFWV H[FHSWLQILHOGVLQZKLFKPXOWLFXOWXUDODZDUHQHVVLVDQLPSRU WDQWHOHPHQWRIRQH·VXQGHUVWDQGLQJRIWKHVXEMHFWPDWWHU 7KLVZRXOGVHHPWR EHWKHFDVHPDLQO\LQWKHKXPDQLWLHVDQGLQVRPHVRFLDOVFLHQFHV DVZHOODVLQ SURIHVVLRQDO VFKRROV SUHSDULQJ VWXGHQWV IRU RFFXSDWLRQV LQYROYLQJ IUHTXHQW FRQWDFWZLWKIHOORZFLWL]HQVRIPXOWLSOHHWKQLFLWLHV 6HH&KDSWHU SS ² 2QH ILQDOZD\ LQZKLFK D SULRUL UHDVRQLQJ FDQ VXSSOHPHQW WKH DYDLODEOH
HYLGHQFHRQWKHFRQVHTXHQFHVRI3'SROLFLHVLQKLJKHUHGXFDWLRQLVE\VKHG GLQJ OLJKW RQ WKH UHODWLYH VXFFHVV RI WKRVH SROLFLHVZLWK UHVSHFW WR GLIIHUHQW 85(*V 7KHDYDLODEOHHPSLULFDOHYLGHQFH LVTXLWHXQHYHQ LQ LWVFRYHUDJHRI WKH GLIIHUHQW 85(*V IDYRUHG E\ SRVLWLYH GLVFULPLQDWLRQ LQ WKH 86 DQG LQ ,QGLD ,QWKH86 FRQVLGHUDEO\PRUHHYLGHQFHLVDYDLODEOH IRU%ODFNVWKDQIRU
+LVSDQLF$PHULFDQVRUIRU1DWLYH$PHULFDQV ,Q,QGLD YHU\OLWWOHTXDQWLWDWLYH HYLGHQFHLVDYDLODEOHIRU2%&VDVDJURXS ,QGHHG EHFDXVH3'SROLFLHVDSSOLHG WR2%&V² OLNH WKH2%&V WKHPVHOYHV²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²VXPPDUL]HGLQ7DEOH ²ZHFDQGHULYHVRPHLQVLJKWV LQWRWKHZD\LQZKLFKFRQFOXVLRQVDERXW 3'SROLF\FRQVHTXHQFHVGUDZQ IURPWKHDYDLODEOHHYLGHQFHGLIIHUDFURVV WKH GLIIHUHQW85(*VZLWKLQWKH86DQGZLWKLQ,QGLD ,Q WKH86 WKHUH LV OLWWOH D SULRUL UHDVRQ WR H[SHFW VLJQLILFDQW GLIIHUHQFHV
DPRQJ85(*VLQWKHTXDOLW\RIDFDGHPLFSHUIRUPDQFH 7KHVWUHQJWKRIWKH QHHGIRUDIRFXVRQHWKQLFLW\²DVVRFLDWHGHVSHFLDOO\ZLWKH[WHQWRIPLVWUHDW PHQW H[WHQWRIVWLJPDWL]DWLRQ DQGGHJUHHRIKRPRJHQHLW\²LVJUHDWHULQWKH FDVHRI$IULFDQ$PHULFDQVDQG1DWLYH$PHULFDQVWKDQLQWKHFDVHRI+LVSDQLF $PHULFDQV 7KLVLPSOLHVWKDWWKHEHQHILWVGHULYHGIURPLQWHJUDWLRQRIVRFLHW\·V HOLWHDQG IURPWKH VSUHDGRI VRFLDOFDSLWDOFDQEHH[SHFWHG WR EHJUHDWHU IRU WKH IRUPHU WZRJURXSV WKDQ IRU WKH ODWWHU ,Q ,QGLD FRVWV KLQJLQJRQ UHOD WLYHO\ZHDNDFDGHPLFSHUIRUPDQFH²VXFKDVWKRVHDVVRFLDWHGZLWKLQDFFXUDF\ LQDSSUDLVLQJDSSOLFDQWTXDOLILFDWLRQVDQGGHYDOXDWLRQRI85(* DFFRPSOLVK PHQWV²DUHVXUHO\OHVVVHULRXVIRU2%&VWXGHQWVWKDQIRU6&RU67VWXGHQWV 2QWKHRWKHUKDQG WKHQHHGIRUDIRFXVRQHWKQLFLW\LVVWURQJHVWLQWKHFDVH RI6&VWXGHQWVDQGZHDNHVWLQWKHFDVHRI2%&VWXGHQWV VREHQHILWVDVVRFLDWHG ZLWKLQWHJUDWLRQDQGVRFLDOFDSLWDOZLOOEHJUHDWHUIRU6&VWXGHQWVWKDQIRU67 VWXGHQWVDQGJUHDWHUIRU67VWXGHQWVWKDQIRU2%&VWXGHQWV
&RQFOXVLRQV )URPWKHHYLGHQFHVXPPDUL]HGLQ7DEOHVDQG VXSSOHPHQWHGE\WKH DSULRULUHDVRQLQJQRWHGLQWKHSUHFHGLQJVHFWLRQ ZHFDQDUULYHDWDVHULHVRI ILQGLQJV DERXW WKH FRQVHTXHQFHV RI 3' SROLFLHV LQ DGPLVVLRQV WR KLJKHU HGXFDWLRQDOLQVWLWXWLRQV 2IWKHVH WKHILQGLQJVWKDWDUHPRVWVROLGO\JURXQGHG DUHWKHIROORZLQJ
‡ 3'SROLFLHVLQERWKWKH86DQG,QGLDKDYHJHQHUDWHGDYDULHW\RIEHQHILWV IURPJUHDWHU HWKQLF LQWHJUDWLRQRI VRFLHW\·V HOLWH FRQWULEXWLQJ WRJUHDWHU HIILFLHQF\ DQG HTXLW\ ² DQG SUREDEO\ DOVR WR JUHDWHU LQWHUHWKQLF VRFLDO KDUPRQ\DQGJUHDWHUGHPRFUDWLFYLWDOLW\ 0RUHRYHU 3'SROLFLHVLQVHOHF WLYHKLJKHUHGXFDWLRQDOLQVWLWXWLRQVLQERWKWKH86DQG,QGLDKDYHKHOSHG WR VSUHDG VRFLDOFDSLWDO WRPHPEHUVRIXQGHUUHSUHVHQWHGHWKQLFJURXSV FRQWULEXWLQJ WR JUHDWHU HTXLW\ DQG ² DW OHDVW LQ WKH FDVH RI WKH 86 ²
JUHDWHUHIILFLHQF\ 7KHVHNLQGVRIEHQHILWVKDYHEHHQPRUHVLJQLILFDQWIRU $IULFDQ DQG1DWLYH$PHULFDQV WKDQ IRU+LVSDQLF$PHULFDQVZLWKLQ WKH 86 DQGPRUHVLJQLILFDQWIRU'DOLWVDQGWRDOHVVHUH[WHQW$GLYDVLVWKDQ IRU2%&PHPEHUVZLWKLQ,QGLD
‡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²RQ DYHUDJH²3'EHQHILFLDULHVHQUROOHG LQ UHODWLYHO\ VHOHFWLYH LQVWLWXWLRQVJR RQ WRKDYHFDUHHUV WKDW DUHPRUH VXFFHVVIXO WKDQ WKRVH WKH\ZRXOGKDYH KDGLQWKHDEVHQFHRI3'
‡ 1HLWKHULQWKH86QRULQ,QGLDKDYH3'SROLFLHVVHUYHG RQWKHZKROH WR LPSURYHWKHDFFXUDF\ZLWKZKLFKDSSOLFDQWTXDOLILFDWLRQVDUHDSSUDLVHGLQ WKH DGPLVVLRQV SURFHVV 2Q WKH FRQWUDU\ WKH\ KDYH FRQWULEXWHG WR D GHFUHDVH LQ WKH DYHUDJH DFDGHPLF TXDOLW\ RI HQUROOHG VWXGHQWV ZLWK UHVXOWLQJHIILFLHQF\FRVWV 7KH\KDYHDOVR OHG WR LQFUHDVHGUHVHQWPHQWE\ QRQ3'EHQHILFLDULHVRYHUXQIDLUQHVVLQDGPLVVLRQVSURFHVVHV²ZLWKVRPH UHVXOWLQJFRVWVLQVRFLDOKDUPRQ\
‡ 3'SROLFLHV LQERWK WKH86DQG ,QGLDKDYHH[DFHUEDWHGHWKQLFJURXS FRQVFLRXVQHVV ZLWK FRQVHTXHQW FRVWV LQ VRFLDO KDUPRQ\ DQG GHPR FUDWLFYLWDOLW\ ,QGLD·V3'SROLFLHVKDYHJHQHUDWHGPRUHGLYLVLYHLGHQWLW\ SROLWLFV GHFHLWIXO HIIRUWV WR FODLP SUHIHUUHG VWDWXV DQG VQRZEDOOLQJ GHPDQGVIRUJURXSSUHIHUHQFHV 863'SROLFLHVKDYHJHQHUDWHGPDLQO\ WKHILUVWRIWKHVHSUREOHPV²DQGDOPRVWVXUHO\WRDOHVVHUH[WHQWWKDQLQ ,QGLD
7KH IROORZLQJ FRQFOXVLRQV DUH VRPHZKDW OHVV VROLGO\ JURXQGHG ² RU OHVV VLJQLILFDQWLQWKHLUOLNHO\PDJQLWXGH²WKDQWKRVHPHQWLRQHGDERYH
‡ 3' SROLFLHV LQ WKH 86 KDYH PRVW SUREDEO\ JHQHUDWHG EHQHILWV IURP JUHDWHUUDFLDOHWKQLFGLYHUVLW\LQVHOHFWLYHKLJKHUHGXFDWLRQDOLQVWLWXWLRQV DWOHDVWLQWKHIRUPRIJUHDWHUVWXGHQWDELOLW\WRIXQFWLRQLQDPXOWLFXOWXUDO VRFLHW\²ZLWKFRQVHTXHQWJDLQVLQHIILFLHQF\DQGGHPRFUDWLFYLWDOLW\ ,WLV XQOLNHO\WKDWDQ\VXFKEHQHILWVKDYHEHHQVLJQLILFDQWLQ,QGLD
‡ 3'SROLFLHV LQ ERWK WKH86 DQG ,QGLD DW OHDVW LQ WHUPV RI WKHLU GLUHFW LPSDFWKDYHFOHDUO\EHHQSRRUO\WDLORUHGWRKHOSWKHPRVWGLVDGYDQWDJHG PHPEHUV RI WKHLU VRFLHWLHV 7KHVH SROLFLHV KDYH WKHUHIRUH UHVXOWHG LQ HTXLW\ FRVWV DVVRFLDWHG ZLWK WKH H[DFHUEDWLRQ RI LQHTXDOLWLHV DPRQJ PHPEHUV RI XQGHUUHSUHVHQWHG HWKQLF JURXSV +RZHYHU WKH\ GR QRW
DSSHDUWRKDYHOHGWRHTXLW\FRVWVE\H[DFHUEDWLQJRYHUDOOLQHTXDOLWLHV²DW OHDVWLQWKH86
‡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
‡ 3' SROLFLHV LQ ERWK WKH 86 DQG ,QGLD KDYH FOHDUO\ KDG WKH HIIHFW RI GHYDOXLQJ WKH DFFRPSOLVKPHQWV RI VWXGHQWV IURP XQGHUUHSUHVHQWHG HWKQLFJURXSVZKRGRQRWKDSSHQWREH3'EHQHILFLDULHV OHDGLQJWRHIIL FLHQF\DQGHTXLW\FRVWVDWOHDVWEHFDXVHRIWKHXQGHUDSSUHFLDWLRQRIWKH FDSDELOLWLHV RI WKRVH VWXGHQWV 7KH UHVXOWLQJ FRVWV DUH JUHDWHU LQ WKH86 WKDQ LQ ,QGLD EHFDXVH WKH QXPEHU RI VXFK VWXGHQWV ² UHODWLYH WR WKH QXPEHURI3'EHQHILFLDULHV² LV FRQVLGHUDEO\KLJKHU LQ WKH86 WKDQ LQ ,QGLD ,WLVOLNHO\WKDW3'SROLFLHVKDYHDOVRH[DFHUEDWHGWKHVWLJPDWL]DWLRQ RI VWXGHQWV IURP XQGHUUHSUHVHQWHG HWKQLF JURXSV DV QRW EHORQJLQJ RQ FDPSXVDQGFRQWULEXWHGWRORZIDFXOW\H[SHFWDWLRQVIRUVXFKVWXGHQWV EXW WKHVHSKHQRPHQDDUHE\QRPHDQVVROHO\DWWULEXWDEOHWRVXFKSROLFLHV
‡ 3'SROLFLHVLQERWKWKH86DQG,QGLDKDYHVHUYHGWRDIILUPWKHFRPPLW PHQWRI WKHLU VRFLHWLHV WR UHGXFH WKH FRQWLQXLQJGLVDGYDQWDJHV IDFHGE\ PHPEHUV RI XQGHUUHSUHVHQWHG HWKQLF JURXSV +RZ PXFK WKLV KDV FRQWULEXWHGWRJUHDWHUVRFLDOKDUPRQ\LVGHEDWDEOH EXWWKHUHLVQRGRXEW WKDWHQGLQJ3'SROLFLHVZRXOGKDYHDVLJQLILFDQWO\DGYHUVHHIIHFWRQVRFLDO KDUPRQ\ XQOHVVWKH\ZHUHUHSODFHGE\VLJQLILFDQWDOWHUQDWLYHSROLFLHVZLWK VLPLODUREMHFWLYHV
)URP WKHVH ILQGLQJV LW LV FOHDU WKDW 3' SROLFLHV LQ DGPLVVLRQV WR KLJKHU HGXFDWLRQDOLQVWLWXWLRQVLQERWKWKH86DQG,QGLDKDYHUHVXOWHGLQDFRPSOH[ PL[WXUHRIEHQHILWVDQGFRVWV 7KHHYLGHQFHLVQRWEURDGDQGGHHSHQRXJKWR SHUPLWXVWRPHDVXUHWKHUHODWLYHPDJQLWXGHVRIWKHYDULRXVNLQGVRISRVLWLYH DQG QHJDWLYH FRQVHTXHQFHV RI 3' SROLFLHV LQ HLWKHU FRXQWU\ QRU LV WKHUH D VLQJOHZLGHO\DFFHSWHGVHWRIYDOXHZHLJKWVWKDWZHFRXOGXVHWRHYDOXDWHWKH UHODWLYH LPSRUWDQFH RI FRQWULEXWLRQV WR KDUPRQ\ GHPRFUDF\ HIILFLHQF\ RU HTXLW\ :KDWZHFDQFRQFOXGH ZLWKDUHDVRQDEOHGHJUHHRIFRQILGHQFH LVWKH IROORZLQJ
7KHPRVWVLJQLILFDQWDQGPRVWYDULHGEHQHILWVIURP3'SROLFLHVLQKLJKHU HGXFDWLRQDO DGPLVVLRQV LQ WKH86 DQG LQ ,QGLD KDYH EHHQ JHQHUDWHG E\ WKH HWKQLF LQWHJUDWLRQ RI VRFLHW\·V HOLWH DQG VLJQLILFDQW HTXLW\ EHQHILWV KDYH SUREDEO\ DOVR DULVHQ IURP WKH VSUHDG RI VRFLDO FDSLWDO WR 85(* VWXGHQWV 7KHVH NLQGV RI EHQHILWV KDYH EHHQ VWURQJHVW IRU $IULFDQ $PHULFDQV DQG 1DWLYH $PHULFDQV LQ WKH 86 DQG IRU 'DOLWV LQ ,QGLD
2WKHUSRVVLEO\VLJQLILFDQWVRXUFHVRIEHQHILWVLQFOXGHWKHSRVLWLYHPRWLYD WLRQRI85(*VWXGHQWV DQG²LQWKH86²WKHFRQWULEXWLRQRIGLYHUVLW\ LQ WKHFRPSRVLWLRQRIHQUROOHG VWXGHQWV WR WKHLU DELOLW\ WR IXQFWLRQ LQD PXOWLFXOWXUDOVRFLHW\ EXWLWVHHPVXQOLNHO\WKDWHLWKHURQHRIWKHVHVRXUFHV RIEHQHILWVFRXOGKDYHDVPXFKLPSDFWDVWKHLQWHJUDWLRQRIVRFLHW\·VHOLWH
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
3'LQGXFHG FRVWV DULVLQJ IURP WKH H[DFHUEDWLRQ RI HWKQLF JURXS FRQVFLRXVQHVV DQGWKHGHJUHHWRZKLFK3'UHVXOWVLQIDLOXUHWRVHOHFWWKH DFDGHPLFDOO\PRVWTXDOLILHGDSSOLFDQWV KDYHERWKEHHQPRUHVLJQLILFDQWLQ ,QGLD WKDQ LQ WKH 86 )XUWKHUPRUH 3'LQGXFHG EHQHILWV IURP VWXGHQW HWKQLFGLYHUVLW\KDYHSUREDEO\EHHQUHDOL]HGLQWKH86EXWQRWLQ,QGLD ,W IROORZV WKDW WKH RYHUDOO QHW EHQHILWV RI 3'SROLFLHV LQ KLJKHU HGXFDWLRQ KDYHLQDOOSUREDELOLW\EHHQJUHDWHULQWKH86WKDQLQ,QGLD
%XWKDYHWKHEHQHILWVRI3'SROLFLHVLQKLJKHUHGXFDWLRQDODGPLVVLRQVRYHU WKHSDVWVHYHUDOGHFDGHVH[FHHGHGWKHFRVWV HLWKHULQWKH86RULQ,QGLD IRU VRPHRUDOORIWKHLURIILFLDOO\UHFRJQL]HGXQGHUUHSUHVHQWHGHWKQLFJURXSV":H VLPSO\FDQQRWDQVZHUWKLVTXHVWLRQLQDGHILQLWLYHIDVKLRQ :KDWZHFDQVD\LV WKDW WKH DQVZHU DOPRVW FHUWDLQO\ KLQJHV RQ WKH FRPSDUDWLYH LPSRUWDQFH RI LQWHJUDWLRQDQGVRFLDOFDSLWDOEHQHILWVDVFRPSDUHGZLWKHWKQLFFRQVFLRXVQHVV DQGDFDGHPLFTXDOLW\FRVWV 7KHRYHUDOOQHWEHQHILWVRID3'SROLF\DUHPRUH OLNHO\ WREHSRVLWLYH WKHPRUHHYLGHQFHRQH ILQGV IRU² DQG WKHPRUHYDOXH RQHDVVLJQVWR²WKHYDULRXVNLQGVRIEHQHILWVDULVLQJIURPWKHHWKQLFLQWHJUD WLRQRIVRFLHW\·VHOLWHDQGWKHHTXLW\EHQHILWVIURPWKHVSUHDGRIVRFLDOFDSLWDO WR85(*VWXGHQWV 3'QHWEHQHILWVDUHPRUHOLNHO\WREHQHJDWLYHWKHPRUH HYLGHQFHRQHILQGVIRU²DQGWKHPRUHYDOXHRQHDVVLJQVWR²VRFLDOKDUPRQ\ DQG GHPRFUDF\ FRVWV DULVLQJ IURP WKH H[DFHUEDWLRQ RI HWKQLF JURXS FRQVFLRXVQHVVDQGHIILFLHQF\FRVWV IURPWKHIDLOXUHWRVHOHFWWKHDFDGHPLFDOO\ PRVWTXDOLILHGDSSOLFDQWV )XUWKHUPRUH ZHFDQVD\ZLWKVRPHFRQILGHQFHWKDW WKHQHWEHQHILWVDUHPRUHOLNHO\WRKDYHEHHQSRVLWLYHLQWKH86WKDQLQ,QGLD ZLWKLQ WKH 86 3' SROLFLHV IDYRULQJ $IULFDQ $PHULFDQV DQG 1DWLYH $PHULFDQVDUHPRVWOLNHO\WRKDYHJHQHUDWHGSRVLWLYHQHWEHQHILWV DQGZLWKLQ ,QGLD SROLFLHV IDYRULQJ'DOLWV DUHPRVW OLNHO\ WRKDYH JHQHUDWHGSRVLWLYHQHW EHQHILWV
%RWKWKHXQFHUWDLQW\DQGWKHFRPSOH[LW\RIWKHVHFRQFOXVLRQVSRLQWWRWKH QHHG IRU PRUH HPSLULFDO UHVHDUFK RQ WKH FRQVHTXHQFHV RI 3' SROLFLHV LQ KLJKHU HGXFDWLRQDO DGPLVVLRQV ² HVSHFLDOO\ LQ ,QGLD ZKHUH WKH HYLGHQFH LV
SDUWLFXODUO\ VFDQW 7RUHLWHUDWHDTXRWDWLRQ IURPWKH IURQWRI WKHERRN ´7KH DEVHQFHRIHPSLULFDO VWXGLHVRI WKHDFKLHYHPHQWVRIUHVHUYDWLRQ DQGFKDQJHV UHVXOWLQJIURPWKHVHLQWKHODUJHUVRFLDOVLWXDWLRQ LVRQHRIWKHPDQ\UHDVRQV ZK\ LW EHFRPHV GLIILFXOW WR FRQGXFW DQ LQIRUPHG GHEDWHµ 3DWZDUGKDQ DQG 3DOVKLNDU 7KHVHWZR,QGLDQVFKRODUVDUHWKHPVHOYHVWKHDXWKRUVRI RQHRIWKHYHU\IHZVWXGLHVLQ,QGLDWKDWWUDFNVWKHSRVWXQLYHUVLW\FDUHHUVRI 3'EHQHILFLDULHVDQGWKHLUFODVVPDWHV 6XFKVWXGLHVDUHFULWLFDO IRUDUULYLQJDW DQXQGHUVWDQGLQJRI VRPHRI WKHNH\FRQVHTXHQFHVRI3'SROLFLHV DQGRQH KRSHVWKDWPDQ\PRUHZLOOEHXQGHUWDNHQLQWKHIXWXUH
