A hegelian perspective on the study of social movements : the case of the Chilean student movement



$+(*(/,$13(563(&7,9(217+(678'<2)62&,$/

029(0(1767+(&$6(2)7+(&+,/($1678'(17

029(0(17

   $57852-(6&$1'Ï1  $EVWUDFW  7KHDLPRIWKHSUHVHQWSDSHULVWRH[SORUHKRZDQLQWXLWLRQRULPPDWXUHFRQFHSWHPHUJHV DQGPD\EHREMHFWLILHGE\WKHVRFLDOZKROHXQWLOLWEHFRPHVSDUWRIWKHHVWDEOLVKPHQWRU PDLQVWUHDP LH XQWLO LW EHFRPHV D PDWXUH FRQFHSW 7KH VWXG\ GUDZV RQ +HJHO¶V SKLORVRSKLFDOERG\)RU+HJHODFRQFHSWLVQRWDSXUHLGHDEXWDVRFLDOPRYHPHQW)RUWKH FRQFHSWWRKDYHUHDOH[LVWHQFHLWPXVWEHPDWHULDOL]HGWKURXJKKXPDQDFWLYLW\7KLVSDSHU GHSOR\V+HJHO¶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{ FHQWXU\ DV D ZD\ RI FRQWH[WXDOL]LQJ WKH FRQFHSWV DQG}

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¶V SKHQRPHQRORJ\ DQG WKHRU\ RI WKH FRQFHSW WKLV DQDO\VLV DGYDQFHV D PHWKRGRORJ\ RI WKH VWXG\RIVRFLDOPRYHPHQWV7KHVWXG\DOVRJLYHVVRPHKLQWVDERXWWKHDFWXDOGHSOR\PHQWRI WKHPHWKRGRORJ\WKURXJKDQDSSUR[LPDWHDQDO\VLVRIWKH&KLOHDQVWXGHQWPRYHPHQW

7KH WKHRUHWLFDO DQG PHWKRGRORJLFDO FRPSRQHQW RI WKH SDSHU LV GLYLGHG LQWR WZR VHFWLRQV7KHILUVWVHFWLRQHQWLWOHG*HQHVLVDQGUHDOL]DWLRQRIWKHFRQFHSWGUDZVRQ+HJHO¶V

/RJLFWRH[SORUHWKHQRWLRQRIFRQFHSWDVWKHJHQHVLVRIDQHZLGHDRUVRFLDOPRYHPHQWDQG

LWV UHODWLRQVKLS ZLWK WKH VRFLDO WRWDOLW\ )RU +HJHO WKH FRQFHSW LV D GHWHUPLQDWLRQ RI FRQVFLRXVQHVV WKDW²E\ PHDQV RI LWV VRFLHWDO JHQHVLV DQG GHYHORSPHQW²LV GHHPHG WR

 H[SDQGKXPDQNLQG¶VIUHHGRP7KHUHIRUHWKHGHYHORSPHQWRIWKHFRQFHSWDPRXQWVWRWKH HYROXWLRQRIUHDVRQWKURXJKWLPHLHKLVWRU\,QFRQVHTXHQFHWKHREMHFWDQGPHWKRGRI LQTXLU\RISKLORVRSKLFDOKLVWRU\LVWKHDQDO\VLVDQGH[SODQDWLRQRIWKLVUDWLRQDOSURFHVV7KH VHFRQGVHFWLRQHQWLWOHG7KHXQLWRIDQDO\VLVLQYHVWLJDWHVVXEMHFWREMHFWUHODWLRQVKLSVDVWKH H[SUHVVLRQRIVXEMHFWLYHDQGREMHFWLYHIUHHZLOODQGWKHFHQWUDOUROHWKHVWDWHSOD\VDVWKH PDWHULDOXQLW\RIERWK$ZRUGRIFDXWLRQPXVWEHJLYHQKHUHDERXWWKHQRWLRQRIVWDWH)RU +HJHOWKHVWDWHLVQRWDFRQVWUXFWWKDWOLHVRSSRVLWHWRFLYLOVRFLHW\QRULVLWDQLQVWLWXWLRQ 7KHVWDWHLVDFRPPXQLW\RIH[LVWHQFHLQZKLFKWKHJHQHUDODQGSDUWLFXODUZLOOVDUHUHDOL]HG 7KHSURSRVHGXQLWRIDQDO\VLVLQFRUSRUDWHVERWKWKHVXEMHFWLYHDQGREMHFWLYHGLPHQVLRQVRI FRQFHSW GHYHORSPHQW DV D ZD\ RI RYHUFRPLQJ WKH PHWKRGRORJLFDO SUREOHPV VRPH KLVWRULRJUDSKLF DQG VRFLRORJLFDO DSSURDFKHV FXUUHQWO\ IDFH WRZDUG WKH VWXG\ RI VRFLDO PRYHPHQWV6XFKDXQLWWULHVWRDYRLGIRFXVLQJH[FOXVLYHO\RQHLWKHUWKHVXEMHFWLYHRUWKH REMHFWLYHGLPHQVLRQRIWKHSURFHVVZKHQDVVHVVLQJWKHLPSDFWRIVRFLDOPRYHPHQWV,WDOVR SURYLGHVDODQJXDJHRIGHVFULSWLRQRIWKHREMHFWLILFDWLRQSURFHVV 7KHWKLUGVHFWLRQRIWKHSDSHUHQWLWOHG$QDO\]LQJWKHREMHFWLILFDWLRQSURFHVVDQDO\]HV WKH&KLOHDQVWXGHQWPRYHPHQWWKDWVWDUWHGLQWRLOOXVWUDWHIXUWKHUWKHGHSOR\PHQWRIWKH PHWKRGRORJ\SDUWLFXODUO\WKHSURSRVHGXQLWRIDQDO\VLVDQGWKHODQJXDJHRIGHVFULSWLRQRI WKHREMHFWLILFDWLRQSURFHVV )LQDOO\WKH&RQFOXVLRQVHFWLRQRIIHUVDVXPPDU\RIWKHZRUNLWVOLPLWDWLRQVDQGZD\V WRJRIRUZDUGLQIXWXUHUHVHDUFKHQGHDYRUV7KHUHDGHUPXVWEHDOHUWHGWRWKHIDFWWKDWWKH SDSHULVIDUIURPEHLQJDIXOO\IOHGJHGHPSLULFDOVWXG\RIWKHVWXGHQWPRYHPHQW7KHGDWD SURYLGHGKHOSVLQHVWDEOLVKLQJOLQNVEHWZHHQWKHWKHRU\WKHPHWKRGRORJ\DQGWKHREMHFWRI VWXG\ IRU WKH VRFLDO VFLHQFHV 7KH &KLOHDQ VWXGHQW PRYHPHQW ZDV FKRVHQ IRU WZR PDLQ UHDVRQV )LUVW VWXGHQW PRYHPHQWV DUH D SUHGRPLQDQW HQJLQH RI /DWLQ $PHULFDQ VRFLHWDO FKDQJH 7KHUHIRUH WKH &KLOHDQ FDVH FRXOG UHVRQDWH ZLWK PDQ\ RWKHU VWXGLHV WKDW DUH FXUUHQWO\ EHLQJ FDUULHG RXW LQ RU RQ WKH UHJLRQ 6HFRQG DOWKRXJK WKH &KLOHDQ VWXGHQW PRYHPHQW HPHUJHG LQ  LWV UDSLG REMHFWLILFDWLRQ DOORZV WR LOOXVWUDWH KRZ WKHRU\ PHWKRGRORJ\DQGGDWDDUHLQWHUWZLQHG   *HQHVLVDQGUHDOL]DWLRQRIWKHFRQFHSW  &RQWUDU\WRFRPPRQXQGHUVWDQGLQJVRIPHWDSK\VLFVDFFRUGLQJWR+HJHODFRQFHSWLVDOZD\V DVRFLDOSURFHVVRIREMHFWLILFDWLRQXSRQZKLFKWKHIRUPDWLRQRIFRQVFLRXVQHVVUHVWV7KH VSLULW²RU FROOHFWLYH PLQG²UDLVHV LWV VHOIDZDUHQHVV WKURXJK FROOHFWLYH DFWLYLW\ &RQVHTXHQWO\WKHZD\VRIWKLQNLQJGHSHQGXSRQV\VWHPVRIDFWLYLW\ZLWKLQDJLYHQVRFLDO IRUPDWLRQ3XWLQRWKHUZRUGVWKHH[LVWHQFHRIDSDUWLFXODUVRFLDOIRUPDWLRQLVFRQWLQJHQWRQ WKHGHYHORSPHQWRIFRQFHSWV7KLVSURFHVVLVGLDOHFWLFDQGUHVWVXSRQRQWRORJLFDOQHJDWLYLW\ LHWKHLGHDOLVFRQWUDVWHGZLWKLWVHOIE\PHDQVRIDQREMHFWDPHGLDWLRQWRROSULPDULO\D ZRUG$V,O\HQNRYVXPPDUL]HVLW  +HJHOHVWDEOLVKHGWKHIDFWWKDWµVSLULW¶EHIRUHLWFRXOGH[DPLQHLWVHOIPXVW VKHGLWVXQEOHPLVKHGSXULW\DQGSKDQWDVPDOQDWXUHDQGPXVWLWVHOIWXUQLQWRDQ REMHFWDQGLQWKHIRUPRIWKLVREMHFWRSSRVHLWVHOIWRLWVHOI$WILUVWLQWKHIRUP RI WKH :RUG LQ WKH IRUP RI YHUEDO µHPERGLPHQW¶ DQG WKHQ LQ WKH IRUP RI LQVWUXPHQWVRIODERXUVWDWXHVPDFKLQHVJXQVFKXUFKHVIDFWRULHVFRQVWLWXWLRQV DQGVWDWHVLQWKHIRUPRIWKHJUDQGLRVHµLQRUJDQLFERG\RIPDQ¶LQWKHIRUPRI WKHVHQVXRXVO\SHUFHSWLEOHERG\RIFLYLOLVDWLRQZKLFKIRUKLPVHUYHVRQO\DVD JODVVLQZKLFKKHFDQH[DPLQHKLPVHOIKLVµRWKHUEHLQJ¶DQGNQRZWKURXJKWKLV H[DPLQDWLRQKLVRZQµSXUHLGHDOLW\¶XQGHUVWDQGLQJKLPVHOIDVµSXUHDFWLYLW\¶

 



7KLV SDWK WR VHOIDZDUHQHVV ERWK UHIOHFWV DQG LV JXLGHG E\ KXPDQNLQG¶V GHVLUH IRU SHUIHFWLRQZKLFKLVWUDYHUVHGE\VXFFHVVLYHREMHFWLILFDWLRQVRILWVXQLYHUVDOIUHHZLOO7KXV +HJHO D  VHHVDQ LPPDQHQW FRQQHFWLRQ DPRQJ WKHLQQHUDQG RXWHUFRKHVLRQ RI VRFLDOIRUPDWLRQVDQGWKHGHYHORSPHQWRIDQDEVROXWHWKDWLVDXQLYHUVDOWUXWKWKURXJKUHDVRQ



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ZKHQKHSRLQWVRXWWKDW³WKHDFWXDOLW\RIWKRXJKWLVOLIHDQG*RGLVWKDWDFWXDOLW\ DQG*RG¶VHVVHQWLDODFWXDOLW\LVOLIHPRVWJRRGDQGHWHUQDO´7UXWKWKHUHIRUHLVWKHRXWFRPH RIUHDVRQQRWEHFDXVHLVWKHUHVXOWRIDQDFFXUDWHFRJQLWLYHSURFHVVEXWEHFDXVHUHDVRQLVWKH H[SUHVVLRQRIYLUWXRXVVRFLDOSUDFWLFHRUVRFLDOMXVWLFH$V+HJHO†DGGLWLRQ SRLQWVRXWLQWKH/RJLFDOLQHRIDUJXPHQWDWLRQZHZLOOVHHDJDLQLQ3KLORVRSK\RI+LVWRU\ 

LW LV RI WKH JUHDWHVW LPSRUWDQFH ERWK IRU FRJQLWLRQ DQG IRU RXU SUDFWLFDO EHKDYLRXUWRRWKDWZHVKRXOGQRWFRQIXVHZKDWLVPHUHO\FRPPXQDOZLWKZKDW LVWUXO\XQLYHUVDO7KHXQLYHUVDOLVDWKRXJKWWKDWWRRNPLOOHQQLDWRHQWHULQWR PHQ¶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7KLV GRFWULQHRUVFLHQFHEHJLQVZLWKWKHDEVWUDFWXQGHUGHYHORSHGVXEMHFWLYHFRQFHSWZKLFKPD\ ZHOOLQFOXGHDVLPSOHVHQVDWLRQJXWIHHOLQJRULQWXLWLRQDQGZLOOWDNHXVDOOWKHZD\XSWR



WKHFRQFUHWHLHWKHDEVROXWHLGHDRUVFLHQFH$V%OXQGHQSRLQWVRXW³WKLQNRI WKHDEVWUDFWFRQFHSWDVDQHZLGHD7KLVQHZDEVWUDFWFRQFHSWFRPHVDVDFRPSOHWHEUHDN ,WLVDEUHDNWKURXJKZKLFKODXQFKHVDQHZVFLHQFHRUSDUDGLJPDQHZPRYHPHQWGUDZLQJ WRJHWKHUDOOWKHWKUHDGVIURPWKHFRQIXVLRQWKDWSUHFHGHVLWGXULQJLWVSHULRGRIJHVWDWLRQ HQXQFLDWLQJ WKH OHVVRQ RI WKH VWRU\´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³QDWXUDO ODZ´ DQG ³KXPDQODZ´³KXPDQGLJQLW\´DQG³HTXDOLW\´.HOO\*URVVL 7KHFRQFHSWRIFKDULW\²DOWKRXJKQRORQJHUH[SUHVVHGDVVXFK²LVDOVRDWWKHFRUHRIODUJH VHFWLRQVRIMXULVSUXGHQFHRQKXPDQULJKWVDQGLQIRUPVVWDWHZHOIDUHSROLF\<HWWKHFRQFHSW ZKHQLQWURGXFHGWR(XURSHLQWKHWK_{FHQWXU\EURNHDZD\IURP5RPDQPRUHVWULJJHULQJ} SURIRXQGVRFLHWDOWUDQVIRUPDWLRQVHVSHFLDOO\GXULQJWKH0LGGOH$JHV 7KHZRUGVDJDSq*UHHNRUFDULWDV/DWLQZKLFKUHIHUUHGDWRQFHWRWKHORYHRI*RG IRUPHQWKHORYHRIPHQIRU*RGDQGWKHORYHEHWZHHQPHQGLGQRWGRWKHMRERQWKHLU RZQIRUWKH\RQO\ZHUHWKHOLQJXLVWLFUHQGLWLRQVRIWKHFRQFHSWRIFKDULW\WKHLQVWDQWLDWLRQV RIWKLVDEVWUDFWRUXQLYHUVDOGHULYHGIURPWKH*RVSHOV7KXVZHDOVRRXJKWWRFRQVLGHUWKH VRFLDOSUDFWLFHVDUWLFXODWHGE\WKHFRQFHSWLHWKHVRFLDOQRUPDWLYLW\WKDWZDVGHYHORSHG ZLWKLQDJLYHQVRFLDOIRUPDWLRQHJ5RPHXQGHU(PSHURU&RQVWDQWLQHRU6SDLQGXULQJWKH ODWHU0LGGOH$JHV,Q+HJHO¶VRZQWHUPVZHPXVWWDNHLQWRFRQVLGHUDWLRQWKHSDUWLFXODU PRPHQWRIWKHFRQFHSW)LQDOO\ZHDOVRPXVWSD\DWWHQWLRQWRWKHVXEMHFWLYHFDVHVLQZKLFK WKH FRQFHSW ZDV VXEVWDQWLDWHG HJ KRZ WKH FRQFHSW JDYH ZD\ WR VSHFLILF RU LQGLYLGXDO LQWHUSUHWDWLRQVRIWKHULJKWVRIWKHLQGLJHQRXVSRSXODWLRQRIWKH:HVW,QGLHVE\WKHMXGLFLDU\ V\VWHPRIWKH6SDQLVK&URZQ

,Q FRQWHPSRUDU\ &KLOH  PDUNHG WKH PLOHVWRQH RI WKH VRFDOOHG 3HQJXLQ 5HYROXWLRQ5HYROXFLyQ3LQJLQD$OORIDVXGGHQKLJKVFKRROVWXGHQWVVWDUWHGPDUFKLQJ VWULNLQJ DQG VHL]LQJ VFKRROV GHPDQGLQJ IUHH WUDQVSRUW SDVVHV LPSURYHPHQWV LQ VFKRRO LQIUDVWUXFWXUH DQG ORZHU IHHV IRU XQLYHUVLW\ HQWUDQFH H[DPLQDWLRQV $FFRUGLQJ WR 6LOYD 3LQRFKHW  DW WKLV VWDJH WKH GHPDQGV UHIOHFWHG D YHU\ VLPSOH EXW YDJXH IHHOLQJ RI GLVDIIHFWLRQ WKDW VRRQ ZDV WUDQVIRUPHG LQWR D FODLP IRU UHSHDOLQJ WKH &RQVWLWXWLRQDO 6WDWXWRU\ /DZ RI (GXFDWLRQ /H\ 2UJiQLFD &RQVWLWXFLRQDO GH (QVHxDQ]D /2&( DQG HVWDEOLVKLQJD³QRWIRUSURILWSXEOLFHGXFDWLRQ´V\VWHPLQWKHFRXQWU\+LJKVFKRROVWXGHQWV PRELOL]HG PDQ\ RWKHU RUJDQL]DWLRQV LQFOXGLQJ WKH &KLOHDQ 6WXGHQW &RQIHGHUDWLRQ &21)(&+ZKLFKZDVFRPSULVHGRIWKHVWXGHQWXQLRQVRIWKHPRVWSUHVWLJLRXV&KLOHDQ XQLYHUVLWLHVDQGVRRQVHL]HGWKHVXSSRUWRIWKHSXEOLFDWODUJHPDQDJLQJWRPRXQWPDVVLYH SURWHVWVRQWKHPDMRUVWUHHWVRI&KLOH¶VFDSLWDO6DQWLDJR$WWKLVSUHFLVHWLPHWKHVWULNHV UDOOLHVDQGPDUFKHVZHUHUHFRJQL]HGDVWKHPDWHULDOGHPRQVWUDWLRQVRIDVRFLDOPRYHPHQW SURSHU $VZHKDYHDOUHDG\VHHQWKHHPHUJHQFHRIWKHFRQFHSWGRHVQRWWDNHSODFHLQWKHPLQG RIDVLQJOHLQGLYLGXDOEXWLQVRFLDOLQWHUDFWLRQVRUHYHQWV,QLWVDEVWUDFWRUVXEMHFWLYHIRUP WKHFRQFHSWLVWKHVLPSOHH[SUHVVLRQRIWKHXQLW\RIWKHXQLYHUVDOSDUWLFXODUDQGLQGLYLGXDO PRPHQWVRIDQLGHD6WXGHQWVGUHZRQOLQJXLVWLFUHVRXUFHVLQWKH6SDQLVKODQJXDJHDQGWKHLU RZQPDWHULDOFRQGLWLRQVWRSXWIRUZDUGDVLPSOHLGHDVXFKDV³IUHHWUDQVSRUWSDVVHV´<HW WKLVUHIOHFWHGDGHHSHUGLVDIIHFWLRQWKDWKDGWREHUHSHDWHGO\VXEMHFWLILHG,QWKH/RJLFWKH



XQLW\RIWKHFRQFHSWLVFRQWDLQHGLQWKHILUVWGLYLVLRQRIWKH7KH'RFWULQHRIWKH&RQFHSW XQGHUWKHKHDGLQJRI7KH6XEMHFWLYH&RQFHSW+HJHO,QWKLVGLYLVLRQ+HJHO PDNHV WKH SRLQW WKDW WKH XQLW\ RI WKHVH WKUHH PRPHQWV GRHV QRW LPSO\ WKDW WKHUH LV QR GLVVRQDQFHDPRQJWKHP$V%OXQGHQSRLQWVRXW³LWLVRQO\LQVRPHLGHDO ZRUOG WKDW DQ LQVWDQFH RI D FRQFHSW ZKHWKHU DQG DFWLRQ RU WKLQJ LV H[KLELWHG LQ VRFLDO SUDFWLFHH[DFWO\DVGHWHUPLQHGLQWKHXQLYHUVDO´7KXVDOWKRXJKWKHVORJDQ³IUHHWUDQVSRUW SDVVHV´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

7KLV EULQJ XV QHDUHU WR WKH UHODWLRQVKLSV WKDW DUH HVWDEOLVKHG EHWZHHQ D VRFLDO PRYHPHQWRUDQHZFRQFHSWDQGWKHVRFLDOWRWDOLW\7KHVRFLDOWRWDOLW\FDQEHLQWHUSUHWHG KHUHDVWKHVRFLDOHVWDEOLVKPHQWRUWKHDFWLYLWLHVDQGLGHDVRIWKHVRFLDOPDLQVWUHDPLHWKH DEVROXWH7KHVHUHODWLRQVKLSVDUHFRQWDLQHGLQWKHVHFRQGGLYLVLRQRI7KH'RFWULQHRIWKH &RQFHSWXQGHUWKHKHDGLQJRI7KH2EMHFW+HJHO:HVKRXOGYLHZWKHQHZ LGHDRUVRFLDOPRYHPHQWDVWKHVXEMHFWDQGWKHVRFLDOZKROHDVWKHREMHFW'HYHORSPHQW WKHUHIRUHLVWKLVVXEMHFWREMHFWLQWHUDFWLRQZKHUHE\WKHDEVWUDFWFRQFHSWUHDFKHVPDWXULW\ DQGEHFRPHVWKHDEVROXWHLGHD+HJHOFRPSDUHVWKHDEVROXWHLGHDWRWKHUHOLJLRXVVWDWHPHQWV XWWHUHG E\ DQ ROG PDQ DV RSSRVHG WR WKH RQHV PDGH E\ D FKLOG )RU WKH ROG PDQ WKH VWDWHPHQWV ³FDUU\ WKH VLJQLILFDQFH RI KLV ZKROH OLIH (YHQ LI WKH FKLOG XQGHUVWDQGV WKH UHOLJLRXVFRQWHQWLWVWLOOFRXQWVIRUKLPRQO\DVVRPHWKLQJRXWVLGHRIZKLFKOLHWKHZKROHRI OLIHDQGWKHZKROHZRUOG´†DGGLWLRQ +HJHODVVHUWVWKUHHIRUPVRILQWHUDFWLRQEHWZHHQVXEMHFWDQGREMHFWWKDWOHDGWRWKH DEVROXWHLGHDPHFKDQLVPFKHPLVPDQGWHOHRORJ\,QPHFKDQLVPWKHVXEMHFWDQGREMHFW ³UHPDLQHTXDOO\LQGHSHQGHQWWKH\RIIHUUHVLVWDQFHDQGDUHH[WHUQDOWRHDFKRWKHU´† 7KXVLIWKHVRFLDOZKROHLVGHDOLQJZLWKDQHZLGHDWKHQHZLGHDZLOOQRWEHDFNQRZOHGJHG QRUJUDVSHG/HWXVJREDFNWRDQGWKHKLJKVFKRROVWXGHQWV¶GHPDQGIRUIUHHSDVVHV 1RRQHXQGHUVWRRGWKDWIUHHSDVVHVGLGQRWOLWHUDOO\PHDQIUHHSDVVHV7KHVRFLDOPDODLVHLW UHSUHVHQWHGKDGPRUHWRGRZLWKFODLPLQJHTXDORSSRUWXQLWLHVIRUDOOWKHVWUHQJWKHQLQJRI VRFLDO ULJKWV DQG VWDWH LQWHUYHQWLRQ 0DQ\ LQWHOOHFWXDOV ZHUH VXPPRQHG E\ PDVV PHGLD RXWOHWVDQGUHVHDUFKRUJDQL]DWLRQVWRH[SODLQZKDWWKHVRFLDOPRYHPHQWPHDQW<HWWKHLU HODERUDWLRQVVHHPHGREVFXUHDQGOHGWRVRPHP\VWLILFDWLRQRQWKHSDUWRIWKHPHGLDDQGWKH SXEOLFDWODUJH$V+HJHOSRLQWVRXWLQPHFKDQLVPZHNQRZWKLQJVLQDPHFKDQLFDOZD\ WKDWLVZHNQRZWKHP³E\URWHLQDVPXFKDVWKHZRUGVUHPDLQZLWKRXWPHDQLQJIRUXVDQG DUHH[WHUQDOWRVHQVHUHSUHVHQWDWLRQDQGWKRXJKWWKHZRUGVDUHLQOLNHPDQQHUH[WHUQDOWR WKHPVHOYHV´† ,QFKHPLVPWKHVXEMHFWDQGLWVREMHFWDUHH[SOLFLWO\GLIIHUHQWLDWHG³KHQFHWKH\DUH WKH DEVROXWH GULYH WR LQWHJUDWH WKHPVHOYHV WKURXJK DQG LQWR RQH DQRWKHU´ † +HJHO E†DOVRSRLQWVRXWWKDWLQWKHFKHPLFDOLQWHUDFWLRQWKHWZRH[WUHPHVGRQRWKDYH DQH[LVWHQFHRIWKHLURZQEXWRQO\DVWKH\RSSRVHRQHDQRWKHU7KHLUXQLW\LV³WKHQHXWUDO 3URGXFWZKLFKFRQVWLWXWHVWKHJURXQGRIWKHLUUHODWLRQDQGRIWKHLUHQWU\LQWRWKLVSURFHVVEXW WKLVXQLW\LVSUHVHQWLQWKHPRQO\DVDQLPSOLFLWUHODWLRQ,WGRHVQRWH[LVWIUHHO\IRULWVHOI DQWHULRUWRWKHSURFHVV7KLVLVWKHFDVHLQ7HOHRORJ\´7KXVLQWHOHRORJ\WKHVXEMHFWDQG WKHREMHFWEHJLQWRPHUJHVHOISURGXFLQJWKHLUSXUSRVH

,Q RUGHU WR LOOXVWUDWH FKHPLVP OHW XV DQDO\]H ZKDW KDSSHQHG ZLWK WKH VWXGHQWV¶ GHPDQGV IURP  RQZDUGV ,Q  XQLYHUVLW\ VWXGHQWV PRELOL]HG WR GHPDQG TXDOLW\ DQG IUHH SXEOLF HGXFDWLRQ IRU DOO +RZHYHU WKLV GHPDQG ZDV GLIILFXOW WR PHHW



EHFDXVHRIWKHFRXQWU\¶VGHHSGLYLGHEHWZHHQWKHSURYLVLRQRIVWDWHDQGSULYDWHHGXFDWLRQ &KLOH¶V HGXFDWLRQ V\VWHP LV D PL[HG RQH ZLWK D ODUJH PDMRULW\ RI SULYDWH SURYLGHUV DW VHFRQGDU\DQGWHUWLDU\OHYHO,WKDVEHHQLPSRVVLEOHWRSURGXFHWKHUHIRUPVWKDWFRXOGDQVZHU WKHPRYHPHQW¶VFDOOIRUHQKDQFLQJVWDWHRQO\SURYLVLRQEHFDXVHRIVHYHUDOIDFWRUV)LUVW WKHUHDUHLPSRUWDQWFRQVWLWXWLRQDOUHVWUDLQWVWKDWOLPLWWKHUROHWKHVWDWHFDQSOD\LQSURYLGLQJ VRFLDOVHUYLFHV7KHSULYDWHVHFWRUFDQFRPSHWHZLWKWKHVWDWHLQDOPRVWDQ\HFRQRPLFDUHD QR PDWWHU KRZ VWUDWHJLF WKDW DUHD PD\ EH 6HFRQG WKH TXRUXP QHHGHG WR UHIRUP WKH &RQVWLWXWLRQ PDNHV FRQVWLWXWLRQDO UHIRUP DOPRVW LPSRVVLEOH 7KLUG WKH UHIRUPV UHTXLUH ODUJHDPRXQWVRISXEOLFIXQGLQJZKLFKFDQRQO\EHSURGXFHGE\UHIRUPLQJWKHFRXQWU\¶V WD[V\VWHPLQWKHILUVWSODFH7KXVPRVWHGXFDWLRQUHIRUPVGLGQRWWRXFKWKRVHNH\IDFWRUV /HJLVODWLRQ FKDQJHV ZHUH LQVXIILFLHQW DQG ZHUH QRW EURDG HQRXJK WR LPSDFW RQ VWDWH HGXFDWLRQ

0RUHRYHUVRPHSULYDWHKLJKHUHGXFDWLRQSURYLGHUVPDGHWKHDUJXPHQWWKDWWKH\ZHUH SDUWRIWKHSXEOLFVHFWRU7KH\KHOGWKDWWKH\ZHUHSOXUDORSHQLQVWLWXWLRQVZKRVHUHVHDUFK DQG WHDFKLQJ DFWLYLWLHV FRQWULEXWHG WR WKH ZKROH FRXQWU\ (YHQ LI WKH\ ZHUH QRW VWDWH FRUSRUDWLRQV WKH\ FHUWDLQO\ ZHUH SXEOLF RU VR WKH\ DUJXHG 8QDEOH WR SURGXFH D GUDVWLF UHIRUP /DUUDtQ DQG =XULWD 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

2QDUDWKHU+HJHOLDQQRWHWKH2(&'VXPPHGXSWKHGLIILFXOWLHVWKDW&KLOH IDFHV WR SURYLGH D PRUH UHDVRQHG UHVSRQVH WR WKH HGXFDWLRQ UHIRUP FRQXQGUXP ³WKH FRXQWU\¶VFDSDFLW\WRFRQWLQXRXVO\XQLI\WKHVHUHIRUPVLQWRDFRKHUHQWYLVLRQZLOOEHNH\WR WKHVXFFHVVDQGVXVWDLQDELOLW\RIWKHUHIRUPVIURPLPSOHPHQWDWLRQRQZDUG´3XWLQRWKHU ZRUGVWKHFRQFHSWRIIUHHDQGTXDOLW\HGXFDWLRQZLWKLQDQRWIRUSURILWIUDPHZRUNLVIDU IURPEHLQJPHUJHGZLWKWKHLGHDRIHGXFDWLRQSURYLVLRQZLGHO\KHOGE\WKHHVWDEOLVKPHQW MHRSDUGL]LQJWKHYLDELOLW\RIWKHUHIRUPV

1RQHWKHOHVV RQH FRXOG DOVR QRWLFH WKH HPHUJHQFH RI VRPH UHIRUPV WKDW DLP DW SURGXFLQJ D PDVVLYH QRWIRUSURILW SXEOLFEDVHG HGXFDWLRQ SURYLVLRQ DW VHFRQGDU\ OHYHO ZKLFKPD\EHFRQVLGHUHGDVWKHJHUPFHOOVRIWHOHRORJLFDOLQWHUDFWLRQ2QHRIWKHPLVWKH /DZRI3XEOLF(GXFDWLRQSDVVHGLQZKLFKFUHDWHVDQHZFHQWUDOL]HGDGPLQLVWUDWLRQ V\VWHP IRU DOO VWDWHEDVHG VFKRROV &RQJUHVR 1DFLRQDO  7KH IXWXUH RI WHOHRORJLFDO LQWHUDFWLRQOLHVLQWKHHQIRUFHPHQWRIWKLVODZDVZHOOLQDVWKHLQWURGXFWLRQRIFRQVWLWXWLRQDO UHIRUPV

)LQDOO\ WKH WKLUG DQG ODVW GLYLVLRQ RI 7KH 'RFWULQH RI WKH &RQFHSW FRQWDLQV WKH PRYHPHQW RI WKH VXEMHFW DQG WKH REMHFW WRJHWKHU XQGHU WKH KHDGLQJ RI 7KH ,GHD ,Q WKLV VHFWLRQ+HJHOGLVFXVVHVWKHDGHTXDWHQHVVRIWKHFRQFHSWERWKVXEMHFWLYHO\DQGREMHFWLYHO\ +HJHO†SRLQWVRXWWKDW³WKHGHILQLWLRQRIWKH$EVROXWHDVWKH,GHDLVQRZLWVHOI DEVROXWH$OOGHILQLWLRQVJLYHQSUHYLRXVO\UHWXUQLQWRWKLVRQH²7KH,GHDLVWKH7UXWKIRU WUXWKPHDQVWKDWREMHFWLYLW\FRUUHVSRQGVZLWKWKH&RQFHSW´3XWLQRWKHUZRUGVWKHPDWXULW\ RI WKH FRQFHSW²WKHRUHWLFDOO\ VSHDNLQJ²LV UHDFKHG ZKHQ WKHRU\ DQG SUDFWLFH DUH LQ FRPSOHWHFRUUHVSRQGHQFH

 



7KHXQLWRIDQDO\VLV 

$FFRUGLQJWR+HJHOKXPDQIUHHGRPFDQEHGHILQHGDVWKHFRQGLWLRQRILQGHWHUPLQDF\RI WKH ZLOO ZKLFK LV LWV XQLYHUVDO VXEVWDQFH +RZHYHU WKLV LQGHWHUPLQDWHQHVV FDQQRW EH VHFXUHGLIWKHVXEMHFWLYHZLOORIWKHLQGLYLGXDOWXUQVLWVEDFNRQFLYLOVRFLHW\RUWKHZLOORI DQRWKHULQGLYLGXDOIRUDQ\WLPHWKLVLQGHWHUPLQDWHQHVVLVYLRODWHGDVLVWKHFDVHLQDVWDWH RIQDWXUHVDYDJHU\RUVODYHU\DQDUELWUDU\GHWHUPLQDWLRQLVLPSRVHGXSRQWKHSHUVRQ7KXV IRU +HJHO WKH LQGLYLGXDO DSSUHKHQGV WKH QRWLRQ RI IUHHGRP²RU DQ\ RWKHU QRWLRQ WR EH H[DFW²WKURXJK WKH FROOHFWLYH DFWLYLW\ RI FLYLO VRFLHW\ ZKHUH HWKLFDO OLIH LV DVFHUWDLQHG +RZHYHUERWKWKLVVHOIFRQVFLRXVQHVVDQGIUHHGRPDUHIRUPVRIDFWLYLW\UHDOL]HGLQVRPH PDWHULDOHVSHFLDOO\WKHVWDWH

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 DQG VR RQ DQG VR IRUWK $V +HJHO  †

DGGLWLRQSRLQWVRXW³WKHFLYLFFRPPXQLW\LVWKHUHDOPRIGLIIHUHQFHLQWHUPHGLDWHEHWZHHQ

WKHIDPLO\DQGWKHVWDWH,WDVWKHGLIIHUHQFHPXVWSUHVXSSRVHWKHVWDWH´7KHUHIRUHZKHQ DQHZVRFLDOPRYHPHQWRUFRQFHSWHPHUJHVWKHUHDUHLPPHGLDWHFRQVHTXHQFHVLQWKHVRFLDO ZKROHLQGHSHQGHQWO\RIWKH³LPSDFW´LWPD\KDYHRUWKHIRUPLQZKLFKWKHFRQFHSWGHYHORSV IRUWKHVRFLDOZKROHSURGXFHGLWLQWKHILUVWSODFHGUDZLQJRQXQLYHUVDOVDQGRQSUDFWLFH 7KLV XQLW\ RI WKH PRPHQWV LV FRQGHQVHG E\ +HJHO   E\ TXRWLQJ 6RSKRFOHV¶ $QWLJRQH³7KHGLYLQHFRPPDQGVDUHQRWRI\HVWHUGD\QRURIWRGD\QRWKH\OLYHHWHUQDOO\ DQGQRRQHFRXOGVD\ZKHQFHWKH\FDPH´)XUWKHUPRUH³WKHVXEMHFWLYHZLOO²RUSDVVLRQ² LVWKHDFWLYDWLQJDQGUHDOL]LQJSULQFLSOHWKH,GHDLVWKHLQQHUHVVHQFHDQGWKHVWDWHLVWKH UHDOLW\RIWKHHWKLFDOOLIHLQWKHSUHVHQW)RUWKHVWDWHLVWKHXQLW\RIWKHXQLYHUVDOHVVHQWLDO ZLOODQGWKHZLOORIWKHVXEMHFWDQGLWLVWKLVZKLFKFRQVWLWXWHVHWKLFDOOLIH7KHLQGLYLGXDO ZKROLYHVZLWKLQWKLVXQLW\KDVDQHWKLFDOH[LVWHQFHDQGKLVYDOXHFRQVLVWVVROHO\LQWKLV VXEVWDQWLDOLW\´ /HWXVQRZH[DPLQHKRZWKHVWDWHPDWHULDOL]HVXQLYHUVDOIUHHGRPE\FRQGHQVLQJWKH VRFLDO ZKROH HVSHFLDOO\ WKURXJK ODZV +HJHO   FKRRVHV WR DQDO\]H WKLV PDWHULDOL]DWLRQ WKURXJK LWV KLVWRULFDO GHYHORSPHQW VR WKDW WKH LPPDQHQW UHODWLRQVKLS EHWZHHQVWDWHDQGVRFLHW\FDQEHXQFRYHUHG  WKHEHVWVWDWHLVWKDWLQZKLFKWKHJUHDWHVWGHJUHHRIIUHHGRPSUHYDLOV%XWWKLV UDLVHVWKHTXHVWLRQRIZKDWFRQVWLWXWHVWKHUHDOLW\RIIUHHGRP)UHHGRPLVXVXDOO\ WKRXJKWDVDVWDWHLQZKLFKWKHVXEMHFWLYHZLOORIDOOLQGLYLGXDOVLVLQYROYHGLQ WKHPRVWLPSRUWDQWDIIDLUVRIWKHVWDWH,QWKLVFDVHWKHVXEMHFWLYHZLOOLVUHJDUGHG DVWKHXOWLPDWHDQGGHFLVLYHIDFWRU%XWWKHQDWXUHRIWKHVWDWHLVWKHXQLW\RIWKH REMHFWLYHDQGWKHXQLYHUVDOZLOODQGWKHVXEMHFWLYHZLOOLVUDLVHGWRWKHSRLQWDW ZKLFKLWUHQRXQFHVLWVSDUWLFXODULW\7KHFRPPRQFRQFHSWLRQRIWKHVWDWHWHQGV WRPDNHDGLYLVLRQEHWZHHQWKHJRYHUQPHQWRQWKHRQHKDQGDQGWKHSHRSOHRQ WKH RWKHU VR WKDW WKH IRUPHU LV HTXDWHG ZLWK WKH FRQFHQWUDWHG DFWLYLW\ RI WKH XQLYHUVDODQGWKHODWWHUZLWKWKHPDQ\VXEMHFWLYHZLOOVRIWKHLQGLYLGXDOFLWL]HQV 7KXVWKHJRYHUQPHQWDQGSHRSOHDUHWUHDWHGDVVHSDUDWHHQWLWLHV,WLVWKRXJKW WKDWDJRRGFRQVWLWXWLRQLVRQHLQZKLFKWKHWZRHOHPHQWV²WKHJRYHUQPHQWLQ



LWVXQLYHUVDOIXQFWLRQDQGWKHSHRSOHLQLWVVXEMHFWLYHZLOO²DUHVHFXUHGDJDLQVW RQH DQRWKHU WKH WZR DUH WKXV H[SHFWHG WR LPSRVH PXWXDO UHVWUDLQWV RQ RQH DQRWKHU7KLVIRUPRIFRQVWLWXWLRQGRHVLQGHHGKDYHLWVSODFHLQKLVWRU\EXWWKH RSSRVLWLRQLWFRQWDLQVLVRYHUFRPHLQWKHFRQFHSWRIWKHVWDWH7KHUHLVVRPHWKLQJ SHUYHUVH DERXW VXFK FRQWUDVWV EHWZHHQ WKH SHRSOH DQG WKH JRYHUQPHQW D PDOLFLRXV DUWLILFH GHVLJQHG WR LPSO\ WKDW WKH SHRSOH GLYRUFHG IURP WKH JRYHUQPHQW WKHPVHOYHV FRQVWLWXWH WKH ZKROH 6R ORQJ DV VXFK LGHDV DUH FRXQWHQDQFHGLWFDQQRWEHVDLGWKDWWKHVWDWH²ZKLFKLVWKHXQLW\RIWKHXQLYHUVDO DQGWKHSDUWLFXODUZLOO²LVUHDOO\SUHVHQW2QWKHFRQWUDU\WKHVWDWHVWLOOKDVWR EHFUHDWHG  7KHKLVWRULFDOGHYHORSPHQWGHSLFWHGDERYHJRHVIURPFKHPLVP³WKHJRYHUQPHQWLQ LWVXQLYHUVDOIXQFWLRQDQGWKHSHRSOHLQLWVVXEMHFWLYHZLOO´WRWHOHRORJ\³WKHRSSRVLWLRQLW FRQWDLQVLVRYHUFRPHLQWKHFRQFHSWRIWKHVWDWH´7KHVWDWHLVWKHPDWHULDOLQVWDQWLDWLRQRI WKHVRFLDOZKROHDQGWKHVRFLDOZKROHLVWKHVWDWH&LYLOVRFLHW\³WKHSHRSOH´ZLWKLQZKLFK RQHWHQGVWRORFDWHVRFLDOPRYHPHQWVFDQQRWH[LVWZLWKRXWWKHVWDWH ,Q)LJXUHZHKDYHVXPPDUL]HGWKH+HJHOLDQFRQFHSWVVHHQVRIDU)RU+HJHOWKH REMHFWLILFDWLRQSURFHVVRIWKHFRQFHSWLVWKHGHYHORSPHQWRIUHDVRQWKURXJKWLPHWKDWLV KLVWRU\+RZHYHUWKLVFDQQRWEHDFKLHYHGZLWKRXWWKHVWDWHIRULWVPDWHULDOPHGLDWLRQLVWKH RQO\ZD\WRJXDUDQWHHWKDWWKHSDUWLFXODUDQGREMHFWLYHZLOOVPHHW,QRWKHUZRUGVIUHHGRP LVRQO\SRVVLEOHWKURXJKSDUWLFLSDWLRQZLWKLQWKHVWDWH7KLVLVZKDWPDNHV+HJHO DVVHUWWKDWIUHHGRPLVWKHE\SURGXFWRIWKHFUHDWLRQRIWKHDEVROXWHPRGHUQVWDWH³7KDWWKH (DVWHUQQDWLRQVNQHZRQO\WKDWRQHLVIUHHWKH*UHHNDQG5RPDQZRUOGRQO\WKDWVRPHDUH IUHHZKLOHZHNQRZWKDWDOOPHQDEVROXWHO\PDQDVPDQDUHIUHH´   )LJXUH&RQFHSWREMHFWLILFDWLRQSURFHVVDFFRUGLQJWR+HJHO   1RZLWLVWLPHWRVHHKRZVRFLDOPRYHPHQWVWXGLHVFDQRYHUFRPHWKHUHLILFDWLRQRI WKHPRPHQWVRIWKHVRFLDOZKROHVXFKDVIDPLO\FLYLOVRFLHW\DQGVWDWH$FFRXQWLQJIRUWKH LQWHUDFWLRQRIVXEMHFWREMHFWSUHVHQWVPDQ\SUREOHPVXQGHUFRQWHPSRUDU\WKHRULHVRIVRFLDO PRYHPHQWV$IWHUUHYLHZLQJIHZVHOHFWHGFULWLTXHVHJ)RZHUDNHU&URVVOH\ 



6QRZ6RXOHDQG.ULHVLDJHQHUDOSLFWXUHFDQEHGUDZQ2QWKHRQHKDQGVRFLRORJLFDO DQG SKLORVRSKLFDOKLVWRULF PHWKRGRORJLHV WKDW GUDZ RQ +HJHOLDQ RU 0DU[LVW GLDOHFWLFV DUJXDEO\KDGDQLQDGHTXDWHXQGHUVWDQGLQJRIWKHUHDOL]DWLRQSURFHVVRIWKHFRQFHSWDWDNLQJ WKHQHZPRYHPHQWDVVRPHWKLQJRSSRVLWHWRWKHVRFLDOV\VWHPWKHUHIRUHH[WHUQDOWRWKH VRFLDOZKROHRUWKHVWDWHEGHSOR\LQJFDWHJRULHVGHYHORSHGIRUDQDO\]LQJPRGHUQVRFLHW\ RUPRGHUQVRFLDOV\VWHPVLQDGHTXDWHIRUJLYLQJDQDFFRXQWRISRVWPRGHUQPRYHPHQWV HVSHFLDOO\ WKRVH LQ WKH GHYHORSLQJ ZRUOG RU F VLPSO\ JURXQGLQJ WKH VWXG\ RQ WKH SDUWLFXODULWLHVRIWKHVRFLDOPRYHPHQWZLWKRXWUHDFKLQJXQLYHUVDOFDWHJRULHV

0RVWRIWKHVHSUREOHPVDUHDGGUHVVHGWKHRUHWLFDOO\PHWKRGRORJLFDOO\DQGHPSLULFDOO\ LQ 6DOD]DU¶V UHVHDUFK RQ &KLOH¶V VRFLDO PRYHPHQWV ZKLFK LV IUDPHG XQGHU WKH KLVWRULRJUDSKLFWUDGLWLRQNQRZQDVVRFLDOKLVWRU\,Q6DOD]DU¶VUHVHDUFKWKHQRWLRQDQGUROH RI WKH VWDWH SUHVHQW PDQ\ DPELJXLWLHV DQG FRQWUDGLFWLRQV SURGXFLQJ FRQIXVLRQ DW PDQ\ OHYHOV,QIDFW6DOD]DUVHHPVWRODFNDQDSSURSULDWHDQGXQLILHGWKHRU\RIWKHVRFLDOWRWDOLW\ /HWXVVHHIHZLQVWDQFHVRIKRZWKHPLVFRQFHSWLRQVRIWKHVRFLDOZKROHFUHDWHXQVROYDEOH DQDO\WLFDOWHQVLRQV 'UDZLQJRQ0HOXFFL6DOD]DUDVVHUWVWKDWLQWKHSRVWPRGHUQ GHYHORSHGZRUOGVRFLDOPRYHPHQWVGRQRWQHFHVVDULO\VHHNWRSURGXFHXQLYRFDOUHIRUPVRI WKHVWDWH¶VSROLWLFDODSSDUDWXVRULQVWLWXWLRQV6RFLDOPRYHPHQWVZLOOEULQJQHZFRQWHQWVWR WKHLQVWLWXWLRQDOGHEDWHZLWKRXWFKDQJLQJWKHIRUPRIWKHLQVWLWXWLRQV+RZHYHUWKLVGRHV QRWDSSO\WRVRFLDOPRYHPHQWVLQ/DWLQ$PHULFDZKHUHERWKWKHODFNRILQGXVWULDOL]DWLRQ DQGRIDVWURQJVRFLDOZHOIDUHVWDWHDQGWKHSUHGRPLQDQFHRIQHROLEHUDOSROLFLHVFDOOIRU FKDQJHVLQVWDWHVWUXFWXUH8QIRUWXQDWHO\6DOD]DU¶VSRVLWLRQVHHPVXQVXVWDLQDEOHIRUQRW RQO\VRFLDOPRYHPHQWVLQGHYHORSLQJFRXQWULHVVHHNFKDQJHVLQVWDWHVWUXFWXUH3RVWPRGHUQ VRFLDO PRYHPHQWV VXFK DV IHPLQLVP JHQGHU HTXDOLW\ PRYHPHQWV DQG HQYLURQPHQWDO PRYHPHQWV GR VHHN WR SURGXFH VWUXFWXUDO FKDQJH ,Q IDFW WKH\ KDYH SURGXFHG QHZ LQVWLWXWLRQV DQG GUDPDWLF FKDQJHV LQ IDPLO\ ULJKWV DFURVV PDQ\ LQGXVWULDOL]HG QDWLRQV &KDQJHVLQIDPLO\ULJKWVHQYLURQPHQWDOULJKWVGLVFULPLQDWLRQODZHWFDUHDVWDWHPDWWHU

$FFRUGLQJWR6DOD]DUZKDWVHHPVWRFKDUDFWHUL]HQHZVRFLDOPRYHPHQWV LVWKHLUDXWRQRP\YLVjYLVWKHVWDWH³WKHUHYROXWLRQDU\SURFHVVWKDWDVRFLDOPRYHPHQWPD\ WULJJHULVQRWGHILQHGVRPXFKIRUWKHGHVWUXFWLYHDFWLRQWKDWSURMHFWVRYHUWKHV\VWHPWKDW VXSSUHVV LW EXW IRU WKH EURDGHQLQJ FDSDFLW\ RI WKH DOWHUQDWLYH VRFLDO PRGHO WKDW DOUHDG\ LQIRUPVLWIURPZLWKLQ´)RU6DOD]DUVLQFHWKHEHJLQQLQJRIWKHVWKH QHROLEHUDO VWDWH WULJJHUHG D UHSUHVHQWDWLRQ FULVLV LQ &KLOH OHDYLQJ WKH JRYHUQDQFH RI WKH QDWLRQWRWKHPDUNHW,QFRQVHTXHQFHQRZDGD\VWKHVXFFHVVRIDVRFLDOPRYHPHQWGHSHQGV XSRQ LWV FDSDFLW\ WR JHQHUDWH ³VRFLDO FDSLWDO´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WKHVWDWHZLOOEHFRPHLUUHOHYDQWLQZKLFKFDVHFLYLOVRFLHW\ZLOOFROODSVHDV ZHOO RU E WKH WUDQVIRUPDWLRQ ZLOO EH VZLIW DQG FDWDVWURSKLF D UHYROXWLRQ RU F WKH WUDQVIRUPDWLRQZLOOEHVZLIWDQGFDWDVWURSKLFEXWLQUHDFWLRQWRWKHROGVWDWHDFRXQWHU UHYROXWLRQ :KLOH6DOD]DUUHPDUNVRQWKHSHULSKHUDOUROHRIWKHQHROLEHUDOVWDWHLQIRVWHULQJRU FRQVROLGDWLQJWKHVRFLDOFKDQJHHQJLQHHUHGE\QHZVRFLDOPRYHPHQWVKHGRHVQRWGLVPLVV WKHVWXG\RILWVUROH,QIDFWKHQRWRQO\DQDO\]HVWKHUROHRIWKHOLEHUDODQGQHROLEHUDOVWDWH LQWKHHPHUJHQFHRIKLVWRULFDORUVRFLDOVXEMHFWVRULGHQWLWLHVHJVRFLDOVWUDWDVRFLDOFODVVHV RU VRFLDO PRYHPHQWV PHUFKDQWV HQWUHSUHQHXUV FDSLWDOLVWV ODERUHUV XQLRQLVWV HWF



HVSHFLDOO\ E\ SRLQWLQJ RXW LWV FHQWUDO UROH LQ WKH SURGXFWLRQ RI D YDVW DUUD\ RI KLVWRULFDO DQRPLHVEXWHYHQXSKROGVFRQVWLWXWLRQDOFKDQJHVIURPDKLVWRULFDOSHUVSHFWLYHHJ6DOD]DU 6DOD]DU¶VWKHVLVLVWKDWWKHFRQVWUXFWLRQRIWKH&KLOHDQVWDWHKDV EHHQLQWHUUXSWHGDQGUHSODFHGWKURXJKWKHLPSRVLWLRQE\IRUFHRIFRQVWLWXWLRQDOODZVWKDW RYHUZURWHWKHOHJLWLPDWHFRQVWLWXHQWSRZHURIWKHSHRSOH7KXVHYHQLILQ6DOD]DU¶VDQDO\VLV WKHUHLVRSSRVLWLRQEHWZHHQWKHFLYLOSROLWLFDOFODVVDQGWKHFLYLOPRYHPHQWVWKHLQWHJUDWLQJ SULQFLSOHLVFRQVWLWXHQWSRZHUIRUWKLV³LVWKHRQHWKDWFDQDQGPXVWEHH[HUFLVHGE\WKH

SHRSOH WKHPVHOYHV²DV VRYHUHLJQ FLWL]HQV²WR FRQVWUXFW DFFRUGLQJ WR LWV GHOLEHUDWHG DQG

IUHHO\ H[SUHVVHG ZLOO WKH VWDWH WRJHWKHU WKH PDUNHW DQG WKH FLYLO VRFLHW\ WKDW LW GHHPV QHFHVVDU\DQGFRQYHQLHQWIRULWVRZQGHYHORSPHQWDQGZHOOEHLQJ´6DOD]DU7KHUH LVQRSUREOHPZLWK6DOD]DU¶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

/HWXVOHDYH6DOD]DU¶VDSSURDFKIRUDPRPHQWDQGIRFXVRXUDWWHQWLRQRQRWKHUWKHRULHV DQGPHWKRGRORJLHVRIDQDO\]LQJWKHREMHFWLILFDWLRQSURFHVVRIDQHZVRFLDOPRYHPHQWRU FRQFHSW HVSHFLDOO\ WKRVH WKDW YLHZ LW DV D IRUP RI LQVWLWXWLRQDOL]DWLRQ 6RPH HPSLULFDO DSSURDFKHV KDYH UHOLHGRQ WKH LGHQWLILFDWLRQ DQG DQDO\VLV RI WKH FRQVWLWXWLYH HOHPHQWV RI VRFLDOPRYHPHQWVKRSLQJWRSURGXFHDJHQHUDOWKHRU\RIQRQV\VWHPLFGHYLDQWDQGHYHQ LUUDWLRQDOEHKDYLRUVXFKDVLVWKHFDVHZLWKWKHQRWLRQVRI³VRFLDODFWLRQ´DQG³FROOHFWLYH EHKDYLRU´HJ6PHOVHURUVWXG\WKHPRELOL]DWLRQRIVHYHUDOSROLWLFDOUHVRXUFHVHJ 7RXUDLQH0HOXFFL+RZHYHUWKHVHDSSURDFKHVVHHPWRRYHUORRNWKHIDFWWKDW REMHFWLILFDWLRQLVDORQJSURFHVVLQZKLFKWKHFRQFHSWDWWKHEHJLQQLQJORRNVSULPDIDFLH LUUDWLRQDO²DV LW LV WKH H[SUHVVLRQ RI D VLPSOH LPPHGLDWH UHSUHVHQWDWLRQ WKDW UHTXLUHV HODERUDWLRQ²EXWLWVURRWVXVXDOO\GLJGHHSLQWRDYDOLGXQLYHUVDO,QFRQWUDVWLIWKHFRQFHSW LVQRWUHDVRQDEOHLWZLOOEHVKRUWOLYHG

(\HUPDQDQG-DPLVRQDVVHUWWKDWPRYHPHQWLQWHOOHFWXDOVSOD\DNH\UROHLQWKH IRUPDWLRQRIFHUWDLQVRFLDOPRYHPHQWV,QIDFWWKH\SRLQWRXWWKDWWKHYHU\H[LVWHQFHRID PRYHPHQW GHSHQGV RQ WKH GHYHORSPHQW RI FRQFHSWXDO V\VWHPV VRPHWKLQJ WKH\ GXE FRJQLWLYHSUD[LVDSURFHVVWKDWFRXOGEHXQGHUVWRRGDVDIRUPRIFROOHFWLYHOHDUQLQJZKLFK FUHDWHV K\EULG LGHQWLWLHV 0RUHRYHU-DPLVRQ  DVVHUWV WKDW WKH SURFHVV RI FRJQLWLYH SUD[LV²UHJDUGLQJDWOHDVWWKHLQWHUDFWLRQEHWZHHQVRFLDOPRYHPHQWVDQGVFLHQFH²UHVWVRQ ZDYHV RI DSSURSULDWLRQ LQ ZKLFK WKHRUHWLFDO LQQRYDWLRQV DUH LQVWLWXWLRQDOL]HG WKURXJK GLVFRXUVHZKLOVWSUDFWLFDOLQQRYDWLRQVDUHLQVWLWXWLRQDOL]HGWKURXJKWKHFUHDWLRQRIQRYHO RUJDQL]DWLRQV HJ 5HIRUPDWLRQ3DUDFHOVLVP (QJOLVK &LYLO :DU5R\DO 6RFLHW\ (QOLJKWHQPHQW6ZHGLVK$FDGHP\RI6FLHQFH)UHQFK5HYROXWLRQeFROH3RO\WHFKQLTXH³,Q UHJDUGWRVRFLDOPRYHPHQWV´-DPLVRQSRLQWVRXW³LWLVLQWHUHVWLQJWRQRWHWKDW WKHSHULRGVLQEHWZHHQWKHZDYHVWKHSHULRGVPDUNHGE\HFRQRPLFVWDJQDWLRQDQGGHFOLQH ZHUHDOVRSHULRGVFKDUDFWHUL]HGE\UDWKHULQWHQVHFXOWXUDODQGVRFLDOSURWHVWDFWLYLW\´.RVtN DOVRDGGUHVVHVWKHSUREOHPRIKRZSUDFWLFHFUHDWHVUHDOLW\LQKLVWRULFDOWLPHWKURXJK KLV QRWLRQ RI ³RQWRIRUPDWLYLW\´ .QRZOHGJH LV REMHFWLILHG EXW WKLV SURFHVV JHQHUDWHV GLVFLSOLQDU\QRUPDWLYLW\ZKLFKLQWXUQEHFRPHVWKHEDVLVIRUIXUWKHUSUDFWLFH%UHQGHFNH  KDV D VLPLODU VWDQFH ZKHQ KH DQDO\VHV WKH LQVWLWXWLRQDOL]DWLRQ RI WKH HPSLULFDO NQRZOHGJHSURGXFHGE\WKHSROLWLFDODSSDUDWXVLQFKDUJHRI6SDQLVKFRORQLDOUXOHGXULQJWKH WK_FHQWXU\



7KHTXHVWLRQWKHUHIRUHLVKRZWRGHYHORSDODQJXDJHRIGHVFULSWLRQRIWKHWUDMHFWRU\ RI FRJQLWLYH SUD[LV RU FRQFHSWXDO REMHFWLYDWLRQ DORQJ WKHLU PDWHULDOL]DWLRQ 'UDZLQJ RQ +HJHOZHSURSRVHWRSD\DWWHQWLRQRQWKHRQHKDQGWRWKHGLVFXUVLYHSUDFWLFHVRIWKHQHZ VRFLDOPRYHPHQWDVLWPDWHULDOL]HVDQGPHGLDWHVWKHXQLYHUVDOLQDOONLQGVRIVHPLRVLVGXULQJ LWVH[LVWHQFHHJSODFDUGVSDSHUERDUGVLJQVSKRWRJUDSK\HWFEXWPRVWLPSRUWDQWO\LQ ZRUGV 7KLV HQWDLOV DQ H[HJHVLV RI WKH FRUH DVSHFWV RI VHPLRVLV LQFOXGLQJ GLVFXUVLYH YHUEDOL]DWLRQVIRUWKH\DUHDV\HWLPPDWXUH2QWKHRWKHUKDQGZHSURSRVHWRSD\DWWHQWLRQ WR WKH REMHFWLILFDWLRQ SURFHVV WKDW HPHUJHV GXULQJ WKH VRFLDO LQVWLWXWLRQDOL]DWLRQ RI WKH PRYHPHQWHVSHFLDOO\WKURXJKWKHFUHDWLRQRIVWDWHODZV²LQFOXGLQJDVDPDWWHURIFRXUVH EXGJHWFRQVWLWXWLRQDOODZDQGWKHH[HUFLVHRIMXULVSUXGHQFHE\FRXUWV,QWKLVUHJDUGRQH PXVWXQGHUVWDQGWKDWFRUHDFWLYLWLHVRIWKHPRYHPHQWWHQGWRGLVDSSHDUDQGDUHHPERGLHGLQ RWKHUPRYHPHQWVRULQLQVWLWXWLRQVHJSROLWLFDOSDUWLHV1*2VFROOHFWLYHVDVVRFLDWLRQV WKLQNWDQNV UHVHDUFK FHQWHUV DFDGHPLF FKDLUV DQG VXEMHFWV XQLYHUVLW\ GHSDUWPHQWV PLQLVWULHV HWF RU LQ PRQXPHQWV PHPRULDOV PXVHXPV HWF <HW VWDWH ODZ DQG LWV LQWHUSUHWDWLRQ E\ WKH FRXUWV DUH VWLOO WKH PRVW UHOLDEOH LQGLFDWRUV RI REMHFWLILFDWLRQ 7KH REMHFWLILFDWLRQ SURFHVV SURSHU FDQ EH GHVFULEHG XVLQJ +HJHO¶V QRWLRQV RI PHFKDQLVP FKHPLVPWHOHRORJ\RURUJDQLVPDVLWLVDOVRNQRZQDQGLGHDDWZKLFKSRLQWLWLVQRORQJHU DPRYHPHQWEXWVRFLHW\LQJHQHUDOLHWKHUHLILFDWLRQRIWKHVRFLDOZKROH   $QDO\]LQJWKHREMHFWLILFDWLRQSURFHVV  ,QWKLVVHFWLRQZHZLOODQDO\]HWKHREMHFWLILFDWLRQSURFHVVERWKIURPWKHVXEMHFW¶VSHUVSHFWLYH LH WKH WUDMHFWRU\ RI WKH VWXGHQW PRYHPHQW DQG IURP WKH SHUVSHFWLYH RI WKH VWDWH LQ SDUWLFXODUWKHWUDMHFWRU\RIVWDWHODZ,WLVWKHFRPELQDWLRQRIERWKSHUVSHFWLYHVWKDWZLOO DOORZXVWRDVVHVVDFWXDOFRQFHSWREMHFWLILFDWLRQ/HWXVEHJLQZLWKWKHVXEMHFW¶VSHUVSHFWLYH

7KHUH ZHUH PDQ\ LQVWDQFHV WKDW FRQWULEXWHG WR WKH DFFHOHUDWLRQ RI FRQFHSW REMHFWLILFDWLRQLQWKHFDVHRIWKHVWXGHQWPRYHPHQW0RVWLPSRUWDQWO\VWXGHQWVZHUHQRW RQO\SDUWLFLSDWLQJLQVWXGHQWXQLRQVEXWLQZLGHUUHDFKLQJVWXGHQWFROOHFWLYHVVXFKDVWKH &RRUGLQDWLQJ$VVHPEO\RI+LJK6FKRRO6WXGHQWV$&(6WKH1DWLRQDO&RRUGLQDWRURI+LJK 6FKRRO6WXGHQWV&21(6RWKHUFURVVVHFWLRQDOFROOHFWLYHVRISHRSOH¶VVHOIHGXFDWLRQDQG VLQFHWKH&RRUGLQDWLQJ$VVHPEO\RI8QLYHUVLW\DQG+LJK6FKRRO6WXGHQWV$&(86 )DXUp   DVVHUWVWKHVH FROOHFWLYHV LQKHULWHGWKHLUHWKRV IURP WKH SHRSOH¶VVHOI HGXFDWLRQRUJDQL]DWLRQVWKDWHPHUJHGWRILJKWDJDLQVWWKHUHSUHVVLRQRI*HQHUDO3LQRFKHW¶V GLFWDWRUVKLS  6WXGHQW RUJDQL]DWLRQV IRVWHUHG DVVHPEO\ SROLWLFV KRUL]RQWDO GHFLVLRQPDNLQJDQGFROOHFWLYHVHOIHGXFDWLRQ$V6LOYD3LQRFKHWSRLQWVRXWWKHVH RUJDQL]DWLRQVJURXSHGWRJHWKHUDZLGHFURVVVHFWLRQRIVWXGHQWVIURPGLIIHUHQWKLJKVFKRROV DQG VRFLDO EDFNJURXQGV 7KH\ KHOSHG LQ HVWDEOLVKLQJ IOH[LEOH QHWZRUNV RI LQWHUHVWV WKDW LPSRVHGKRUL]RQWDOZD\VRISROLWLFDOSDUWLFLSDWLRQRQWRVWXGHQWXQLRQV

6WXGHQWV QRW RQO\ UHDG SROLWLFDO WKHRU\ UHVHDUFK DQG ZKLWH SDSHUV RQ HGXFDWLRQ LQFOXGLQJVWXGLHVRQVRFLDOPRYHPHQWVEXWSURGXFHGWKHLURZQNQRZOHGJHDQGSUDFWLFHV $V)DXUpSRLQWVRXWWKH\OLQNHGWKHLUDFWLYLWLHVZLWKWKRVHRIXQLYHUVLW\ VWXGHQWVUHVHDUFKHUVDQGSURIHVVRUVLQYROYHGLQWKHSHRSOH¶VVHOIHGXFDWLRQPRYHPHQWVDQG ZLWKSHRSOH¶VVHOIHGXFDWLRQRUJDQL]DWLRQVWHDFKHUXQLRQVDQGSROLWLFDOSDUWLHV&RQFHSW VXEMHFWLILFDWLRQUHVWHGXSRQWKHFRQVWUXFWLRQRIDQHZVWXGHQWFLWL]HQDK\EULGLGHQWLW\WKDW GLG QRW UHVHPEOH WKH LGHQWLW\ RI IRUPHU VWXGHQWV ZKR KDG D PRUH DPHQDEOH YLHZ RI UHSUHVHQWDWLYHGHPRFUDF\DQGVRFLHW\DQGSOD\HGE\WKHUXOHV7KHQHZLGHQWLW\ZDVKDUGWR JUDVSRXWVLGHWKHPRYHPHQWDOWKRXJKWKHJHQHUDOSRSXODWLRQVXSSRUWHGWKHPRYHPHQW¶V JRDOV7KXVWKHPRYHPHQWGUHZRQYDULRXVV\VWHPVRIWKRXJKWDQGSUDFWLFHVLQFOXGLQJ VRFLDOKLVWRU\DVVHPEO\SROLWLFVVHOIHGXFDWLRQDQGFULWLFDOSHGDJRJ\



7KHNQRZOHGJHDQGSUDFWLFHVRIWKHVWXGHQWPRYHPHQWZHUHH[WHQVLYHO\GLVWULEXWHG DQG KHOSHG WKHP WR FDSWXUH WKH LPDJLQDWLRQ RI ZLGHU VHJPHQWV RI VRFLHW\ $V )DODEHOOD   SRLQWV RXW ³VWXGHQWV LQWURGXFHG D QHZ ODQJXDJH D QHZ GLVFRXUVH RQ KRZ WR RUJDQL]HSURWHVWGLVFXVVDQGKRZWRPDNHGHPRFUDF\7KH\TXHVWLRQHGFRPPRQVHQVH DQG GHQDWXUDOL]HG ZKDW LV FRQVLGHUHG QRUPDO VXFK DV WKH VRFLDO VHJPHQWDWLRQ RI WKH HGXFDWLRQV\VWHPSURILWPDNLQJDQGGHUHJXODWLRQRIWKHSULYDWHHGXFDWLRQVHFWRUVFKRRO IHHVWKH368>XQLYHUVLW\HQWUDQFHH[DPLQDWLRQV@DQGWUDQVSRUW>IDUHV@´2QHRIWKHKLJK VFKRROVWXGHQWVFLWHGLQ)DODEHOOD¶VSDSHULVDJRRGH[DPSOHRIWKHVWXGHQWV¶DUWLFXODWLRQRI WKHPRYHPHQW¶VFRQFHSWWKURXJKGLVFRXUVH  :KDWZHZDQWLVIRUWKHULFKDQGWKHSRRURUYXOQHUDEOHWRKDYHDQHYHQKDQGHG HGXFDWLRQV\VWHP<RXQJSHRSOHDUHWLUHGRIILQGLQJWKDWWKH\GLGQRWGRZHOODW WKH368>XQLYHUVLW\HQWUDQFHH[DP@FRPSDUHGWRWKHUHVXOWVREWDLQHGE\DODG IURPDSULYDWHVFKRRO7KH\DUHWLUHGRIFDUU\LQJRQWKHLUVKRXOGHUVWKHIHHOLQJ RI³ZK\GLGWKH*RYHUQPHQWQRWJLYHPHWKHHGXFDWLRQ,GHVHUYHGRUWKHRQH, ZDQWHG´,WLVWLPHWRXQGHUVWDQGWKDWZHDUHILJKWLQJIRUWKHULJKWWRHGXFDWLRQ DQGQRWIRUDSULYLOHJH0DUtD+XHUWD-XQHFLWHGLQ)DODEHOOD   3UHVLGHQW%DFKHOHW¶VDGPLQLVWUDWLRQZKLFKDWWKHEHJLQQLQJGLGQRWSD\ DWWHQWLRQWRVWXGHQWV¶GHPDQGVDQGUHSUHVVHGVWXGHQWSURWHVWVVRRQKDGWRHQJDJHLQSROLWLFDO QHJRWLDWLRQV EHFDXVH RI PRXQWLQJ VRFLDO SUHVVXUH 3ROLWLFLDQV ZKR ZHUH SDUW RI WKH JRYHUQPHQW¶VFRDOLWLRQSDUWLHVLHWKH&KULVWLDQ'HPRFUDWVWKH6RFLDOLVW3DUW\WKH3DUW\ IRU'HPRFUDF\DQGWKH5DGLFDO3DUW\DPRQJPDQ\RWKHUPLQRUFDPSVRSHQHGWKHGRRUV RIWKH1DWLRQDO&RQJUHVVDQGKRVWHGGLVFXVVLRQVZLWKWKHPRYHPHQWVSRNHVSHUVRQVDVWKH\ ZHUHDIUDLGRIEHFRPLQJLUUHOHYDQWSROLWLFDODQGVRFLDODFWRUV6RFLDOERGLHVRUJDQL]DWLRQV DQGLQVWLWXWLRQVZLOOLQJO\RUQRWZHUHDOOWUDQVIRUPLQJFRQFUHWL]LQJWKHFRQFHSWRI³QRW IRUSURILWSXEOLFHGXFDWLRQ´ZKLOHDWWKHVDPHWLPHWKH\ZHUHWU\LQJWRPDNHVHQVHRIWKH PRYHPHQW¶VJRDOVVFRSHDQGSUDFWLFHV

,Q  WKH PRYHPHQW UHHPHUJHG EXW WKLV WLPH XQGHU WKH OHDGHUVKLS RI XQLYHUVLW\ VWXGHQW XQLRQV &21)(&+ SOD\HGDNH\ UROHLQGHPDQGLQJ ³IUHH DQG TXDOLW\ HGXFDWLRQ´ 8QLRQV¶ VSRNHVSHUVRQV KDG WDONV ZLWK VWDWH PLQLVWHUV RI 3UHVLGHQW 3LxHUD¶V DGPLQLVWUDWLRQ  DQGHYHQ IRUFHG WKH RXVWLQJ RIWZR FRQVHFXWLYH PLQLVWHUV RI HGXFDWLRQ -RDTXtQ /DYLQ DQG )HOLSH %XOQHV )HUQiQGH] /DEEp  VXPPDUL]HV WKH FKDUDFWHULVWLFV RI WKH PRYHPHQW¶V GLVFRXUVH DW WKLV WLPH WDNLQJ LQWR DFFRXQW WKH SUHVV UHOHDVHVDQGSXEOLFFRPPXQLTXHVRI&21)(&+$&(6DQG&21(6



)LUVWLWPRYHVIURPDGHPDQGLQVSHFLILFDUHDVWRDJHQHUDOTXHVWLRQLQJDWWKH KHDUW RI WKH HFRQRPLFVRFLDO PRGHO 6HFRQG WKLV PRYH LV PDGH KDYLQJ WKH H[SHULHQFHRIWKH3HQJXLQ0RYHPHQWDVDKLVWRULFUHIHUHQFHOHDUQLQJIURP LWV OHVVRQV $ WKLUG NH\ HOHPHQW LV WKH HODERUDWLRQ RI D VLPSOH DQG GLUHFW GLVFRXUVH EXW EDVHG XSRQ VROLG LQIRUPDWLRQ GDWD UHVHDUFK DQG VFLHQWLILF LQTXLULHVZKLFKDOORZVWKHPWRVSHDNQRWRQO\IURPWKHNQRZOHGJHRIWKHLURZQ H[SHULHQFH²VXEMHFWLYHO\²EXWIURPDSODFHZKHUHUHDOLW\LVREMHFWLILHGZKLFK PDNHVLWKDUGHUWRGHQ\LW



 ³ILQDQFLQJ´ ³GHPRFUDWL]DWLRQ´ ³HTXDO DFFHVV´ DQG ³TXDOLW\ >HGXFDWLRQ@´ ZHUHWKHRUJDQL]LQJHOHPHQWVRIWKHPRELOL]LQJGLVFRXUVHWKHVWXGHQWVGHSOR\HG JDWKHULQJ YDVW VXSSRUW IURP WKH SRSXODWLRQ 7KH FULWLTXH ZHQW PXFK IXUWKHU GRZQV\QWKHVL]LQJWKHTXHVWLRQLQJRIWKHPRGHOZLWKWKHVORJDQ³1RWRSURILW´

 

6RPH RI WKH VSRNHVSHUVRQV RI WKH VWXGHQW XQLRQV DQG DVVHPEOLHV ZHUH HOHFWHG IRU &RQJUHVV D IHZ \HDUV ODWHU HJ *LRUJLR -DFNVRQ &DPLOD 9DOOHMR .DURO &DULROD DQG *DEULHO %RULF PDUNLQJ WKH VWDWH LQVWLWXWLRQDOL]DWLRQ RI WKH PRYHPHQW *LRUJLR -DFNVRQ IRXQGHG'HPRFUDWLF5HYROXWLRQ5HYROXFLyQ'HPRFUiWLFDDSROLWLFDOJURXSWKDWZRUNHG ZLWK DQG ZLWKLQ %DFKHOHW¶V VHFRQG DGPLQLVWUDWLRQ  WR DGYDQFH HGXFDWLRQ UHIRUPV7KHLUZRUNKRZHYHUZDVFXWVKRUWDVGLIIHUHQFHVZLWKJRYHUQPHQWRIILFLDOVEHJDQ WR VXUIDFH ,Q  FRQJUHVVSHUVRQV -DFNVRQ DQG %RULF IRUPHG D FRDOLWLRQ RI SROLWLFDO SDUWLHVDQGRUJDQL]DWLRQVFDOOHG)UHQWH$PSOLR%URDG)URQWXQGHUWKHKHJHPRQ\RIWKH QRZ OHJDOO\ LQFRUSRUDWHG 'HPRFUDWLF 5HYROXWLRQ 7KH PRYHPHQW ZDV WUDQVIRUPLQJ WKH FRXQWU\¶VSROLWLFDOODQGVFDSH0RVWRI)UHQWH$PSOLR¶VGLVFRXUVHRQVWDWHLQWHUYHQWLRQLQ HGXFDWLRQ KHDOWK SHQVLRQV HFRQRP\ LQGXVWULDOL]DWLRQ HWF FDQ EH WUDFHG EDFN WR WKH GLVFRXUVHRIWKHVWXGHQWPRYHPHQW$OWKRXJK)UHQWH$PSOLRLVRQO\RQHDPRQJPDQ\RWKHU RSSRVLWLRQJURXSVWKHLUGLVFRXUVHLVFXUUHQWO\IUDPLQJWKHGLVFRXUVHRIWKHRSSRVLWLRQDVD ZKROH DQG VKDSLQJ SXEOLF GLVFXVVLRQ DQG SROLWLFDO GHEDWH 1RQHWKHOHVV DFFRUGLQJ WR &DPSRV&DPSRVWKHFRDOLWLRQKDVEHHQWKHWDUJHWRIPDQ\FULWLTXHVDERXWWKHZD\LW FRQGXFWVLWVEXVLQHVV6RPHYRLFHVZLWKLQVRPHVHFWRUVRIWKHFRDOLWLRQVXFKDVIHPLQLVW DQGUHJLRQDOJURXSVEHOLHYHWKDW)UHQWH$PSOLRLVUXQE\DFORVHGDQGFHQWUDOL]HGHOLWHRI \RXQJ XSSHUHFKHORQ SROLWLFLDQV LQ 6DQWLDJR 7KHUH LV WKH EHOLHI WKDW WKH FRDOLWLRQ KDV VRPHKRZ EHWUD\HG WKH FXOWXUH RI KRUL]RQWDO UHODWLRQVKLSV DQG WKH JUDVVURRW RULJLQV WKDW ZHUHWKHWUDGHPDUNVRIWKHVWXGHQWPRYHPHQW

/HW XV LQWURGXFH QRZ WKH VWDWH GLPHQVLRQ $VLGH IURP WKH WUDQVIRUPDWLRQV RI KLJK VFKRROVWXGHQWDVVHPEOLHVXQLRQVFROOHFWLYHVGHPRQVWUDWLRQVDQGVWULNHVLQWRWKHDFWLYLWLHV FDUULHGRXWE\XQLYHUVLW\VWXGHQWXQLRQVSROLWLFDOSDUWLHVDQGVRIRUWKDVXUYH\RI&KLOHDQ VWDWHODZUHYHDOVWKDWWKHVWDWHZDVDOUHDG\HQJDJHGLQSURYLGLQJIUHHWXLWLRQDWVHFRQGDU\ OHYHOIRUDOOVWXGHQWVEHIRUHWKHHPHUJHQFHRIWKH3HQJXLQ5HYROXWLRQ,QIDFWOHJLVODWLRQ ZDV DOUHDG\ SDVVHG WR PDNH VHFRQGDU\ HGXFDWLRQ PDQGDWRU\ DQG IUHH EDFN LQ  &RQJUHVR1DFLRQDO7KHUHIRUHRQHFRXOGDUJXHWKDWWKHHPHUJHQFHRIWKHPRYHPHQW ZDVQRWVRSUHFLSLWRXVQRUVRVXUSULVLQJEXWLWVLPSRUWDQFHOLHGLQFDSWXULQJWKHVSLULWRID ZKROHDJH ,QWKHVRFDOOHG,QFOXVLRQ/DZIRUEDGHSURILWPDNLQJVFKRROVIURPUHFHLYLQJ VWDWHIXQGVHQVXUHGDQHJDOLWDULDQVFKRRODGPLVVLRQV\VWHPDQGVXSSUHVVHGSULYDWHVWDWH MRLQWSURYLVLRQ&RQJUHVR1DFLRQDOD3ULYDWHVFKRROVZHUHQRORQJHUDEOHWRUHFHLYH SXEOLF IXQGLQJ DQG FKDUJH IRU DGPLVVLRQ DQG WXLWLRQ IHHV WR VWXGHQWV DW WKH VDPH WLPH DOWKRXJKWKH\KDYHLQIDFWNHSWFKDUJLQJIHHVE\LQGLUHFWPHDQV$OVRDVZHDOUHDG\KDYH VHHQWKHSXEOLFEXGJHWOHJLVODWLRQRIWKDW\HDUSURYLGHGIUHHHGXFDWLRQIRUWKHSRRUHVW RIXQLYHUVLW\VWXGHQWV&RQJUHVR1DFLRQDOE+RZHYHUEXGJHWODZVDUHWUDQVLHQWDQG WKHEXGJHWODZRIUHIOHFWHGERWKWKHUXVKDQGWKHGLIILFXOWLHVWKHJRYHUQPHQWKDGLQ SDVVLQJ D PRUH GXUDEOH OHJLVODWLRQ ,Q  WR XQLI\ WKH SXEOLF SULPDU\ DQG VHFRQGDU\ HGXFDWLRQ D QHZ SXEOLF HGXFDWLRQ V\VWHP ZDV FUHDWHG LQ RUGHU WR WDNH EDFN WKH DGPLQLVWUDWLRQRIVFKRROVWKDWZHUHXQGHUWKHFRQWURORIPXQLFLSDOFRUSRUDWLRQVDWFHQWUDO VWDWHOHYHO&RQJUHVR1DFLRQDO)LQDOO\LQ&RQJUHVVSDVVHGDODZWKDWIRUEDGH SURILWPDNLQJ FRUSRUDWLRQV IURP DGPLQLVWHULQJ XQLYHUVLWLHV &RQJUHVR 1DFLRQDO  1RQHWKHOHVV$UWLFOHZKLFKGHDOWSUHFLVHO\ZLWKWKHLVVXHRISURILWPDNLQJFRUSRUDWLRQV ZDVFRQVLGHUHGXQFRQVWLWXWLRQDOE\&KLOH¶VFRQVWLWXWLRQDOFRXUWDQGWKHDUWLFOHZDVUHSHDOHG 7ULEXQDO&RQVWLWXFLRQDO

/HJLVODWLRQFRXUWUXOLQJVDQGJHQHUDOSUDFWLFHUHYHDOWKDWVXEMHFWREMHFWLQWHUDFWLRQV DUHIRUWKHPRVWSDUWFKHPLFDOVOLSSLQJEDFNWRPHFKDQLFDOIURPWLPHWRWLPH%DVLFDOO\WKH UHIRUPV DUH IDU IURP SURGXFLQJ DQ HJDOLWDULDQ VWDWHEDVHG RU D QRWIRUSURILW ³SXEOLF´ HGXFDWLRQV\VWHP+RZHYHUWKHFRQVWLWXWLRQDOVWDWXVTXRLVQRWDEOHWRSURGXFHDFRPSOHWH



PDUNHWEDVHGHGXFDWLRQV\VWHPHLWKHU7KXVDVVRRQDVWKHFRQFHSWRIHJDOLWDULDQQRWIRU SURILWHGXFDWLRQVWDUWHGWRPHUJHXQGHUWKHQRWLRQRI³SXEOLF´RU³SXEOLFJRRG´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

,Q VXPPDWLRQ PXFK PRUH WLPH LV QHHGHG WR DFWXDOO\ VHH WHOHRORJLFDO LQWHUDFWLRQ KDSSHQLQJDVDFRQVHTXHQFHRIDVRFLDOPRYHPHQWDQGRQHKDVWRUHO\RQKLVWRU\WRKDYHD WDVWHRIZKDWLVDOODERXWVXFKDVWKDWZKLFKRFFXUUHGZLWKWKH&KULVWLDQFRQFHSWRIFDULWDV :HUH WKH &DWKROLF FKXUFK DQG DOO &KULVWLDQLW\ WR GLVDSSHDU WKH FRQFHSW ZRXOG DOUHDG\ RXWOLYHDQ\SDUWLFXODULQVWLWXWLRQIRULWLVSUHVHQWLQPXFKRIWKHVWDWHODZDQGODZPDNLQJ VFLHQFHRIPDQ\QDWLRQVLQWKH:HVWHUQDQGQRQ:HVWHUQZRUOGDQGLQWKHOLIHRIPLOOLRQV RISHRSOH  &RQFOXVLRQ 

'UDZLQJ RQ +HJHO¶V SKHQRPHQRORJ\ RI WKH FRQFHSW ZH KDYH IRUZDUGHG ERWK D XQLW RI DQDO\VLVDQGDODQJXDJHRIGHVFULSWLRQRIVRFLDOPRYHPHQWVWKDWFDQFDSWXUHDQGH[SODLQWKH IXOOFRPSOH[LW\RIDVRFLDOPRYHPHQW¶VGHYHORSPHQWEXWLVQDUURZHQRXJKWRIDFLOLWDWHLWV UHVHDUFK 7KH SURSRVHG XQLW RI DQDO\VLV FRPSULVHV ERWK WKH VXEMHFWLYH DQG REMHFWLYH GLPHQVLRQVRIWKHGHYHORSPHQWRIDFRQFHSW7KLVDPRXQWVWRSD\LQJDWWHQWLRQRQWKHRQH KDQGWRWKHVRFLDOPRYHPHQW¶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¶V FDWHJRUL]DWLRQ RI VXEMHFW REMHFWLQWHUDFWLRQVPHFKDQLVPFKHPLVPDQGWHOHRORJ\ :HDOVRKDYHGHSOR\HGLQWHQWDWLYHIDVKLRQWKHXQLWRIDQDO\VLVWRZDUGWKH&KLOHDQ VWXGHQWPRYHPHQWRIWKHVW_{FHQWXU\2QWKHVXEMHFWLYHGLPHQVLRQZHFDQVD\WKDWDPRUH} DGHTXDWHDQGUREXVWZD\RIDSSURDFKLQJWKHDQDO\VLVRIWKHVRFLDOPRYHPHQW¶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

(YHQDIWHUWDNLQJWKHDERYHVKRUWFRPLQJVLQWRDFFRXQWRXUVWXG\KDVVKRZQWKDWWKH GLVUXSWLYHHPHUJHQFHRIWKHVWXGHQWPRYHPHQWZDVQRWVXUSULVLQJLIRQHWRRNLQWRDFFRXQW WKHOHJLVODWLYHDFWLYLW\RIWKHILUVWGHFDGHRIWKHV$OWKRXJKWKHPHFKDQLVWDQGFKHPLVW



SKDVHVRIWKHREMHFWLILFDWLRQSURFHVVFDPHUDSLGO\WKHFRQFHSWKDVKDGLPSRUWDQWVHWEDFNV 5HDFKLQJWKHWHOHRORJLFDOSKDVHPD\UHTXLUHPDQ\PRUH\HDUVSHUKDSVGHFDGHVSURYLGHG WKHPRYHPHQWDQGLWVREMHFWLILFDWLRQVWLOOOLYHVRQ7KHPDLQREVWDFOHLVWKHGLIILFXOW\RI UHIRUPLQJ WKH QHROLEHUDO &RQVWLWXWLRQ RI  ZKLFK SUHYHQWV UHDFKLQJ D FRQFHSWXDO V\QWKHVLV RI SXEOLFSULYDWH HGXFDWLRQ SURYLVLRQ 7KH FRQFHSW RI HFRQRPLF HJDOLWDULDQLVP UXQVDJDLQVWWKHFRQFHSWRIHFRQRPLFIUHHGRP7KXVWKHVROXWLRQVLPSOHPHQWHGVRIDUWR VDWLVI\ WKH VWXGHQW PRYHPHQW¶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

 ³0HWDSK\VLFV´ ,Q 7KH FRPSOHWH ZRUNV RI $ULVWRWOH - %DUQHV HG 3ULQFHWRQ 1HZ-HUVH\3ULQFHWRQ8QLYHUVLW\3UHVV

%/81'(1$QG\

&RQFHSWVDFULWLFDODSSURDFK&KLFDJR+D\PDUNHW%RRNV %5(1'(&.($UQGW

 7KH HPSLULFDO HPSLUH 6SDQLVK FRORQLDO UXOH DQG WKH SROLWLFV RI NQRZOHGJH %HUOLQ'H*UX\WHU2OGHQERXUJ

&$0326&RQVXHOR

 )UHQWH $PSOLR &KLOH HO VXHxR GHOD UXSWXUD GHPRFUiWLFD SRWHQFLDOLGDGHV \

FUtWLFDVVREUHXQSURFHVRHPHUJHQWH8QSXEOLVKHGPDVWHUGLVVHUWDWLRQSS

%DUFHORQD8QLYHUVLGDG$XWyQRPDGH%DUFHORQD &21*5(621$&,21$/

 /H\ 1R  5HIRUPD FRQVWLWXFLRQDO TXH HVWDEOHFH OD REOLJDWRULHGDG \

JUDWXLGDGGHODHGXFDFLyQPHGLD6DQWLDJRGH&KLOH'LDULR2ILFLDO

D /H\ 1R  GH LQFOXVLyQ HVFRODU TXH UHJXOD OD DGPLVLyQ GH ORV \ ODV

HVWXGLDQWHV HOLPLQD HO ILQDQFLDPLHQWR FRPSDUWLGR \ SURKLEH HO OXFUR HQ HVWDEOHFLPLHQWRVHGXFDFLRQDOHVTXHUHFLEDQDSRUWHVGHO(VWDGR 6DQWLDJRGH&KLOH'LDULR2ILFLDO E/H\1RGHSUHVXSXHVWRGHOVHFWRUS~EOLFRFRUUHVSRQGLHQWHDODxR 6DQWLDJRGH&KLOH'LDULR2ILFLDO /H\1R&UHDHOVLVWHPDGHHGXFDFLyQS~EOLFD6DQWLDJR GH&KLOH'LDULR2ILFLDO /H\1RVREUHHGXFDFLyQVXSHULRU6DQWLDJRGH&KLOH'LDULR 2ILFLDO &5266/(<1LFN 0DNLQJVHQVHRIVRFLDOPRYHPHQWV%XFNLQJKDP2SHQ8QLYHUVLW\3UHVV  

 (<(50$15RQDQG$QGUHZ-DPLVRQ

 6RFLDO PRYHPHQWV $ FRJQLWLYH DSSURDFK 8QLYHUVLW\ 3DUN 3$ 3HQQ 6WDWH 8QLYHUVLW\3UHVV

)$85e'DQLHO

³/DVSUiFWLFDVGHDXWRHGXFDFLyQSRSXODUHQ&KLOHSRVWGLFWDGXUD\ODSURSXHVWD GHOµ&RQWURO&RPXQLWDULR¶´(GXFDFLyQGH$GXOWRV\3URFHVRV)RUPDWLYRV 6DQWLDJRGH&KLOH

3UiFWLFDV DXWRHGXFDWLYDV GH OD MXYHQWXG XUEDQR SRSXODU HQ HO &KLOH

SRVWGLFWDWRULDO VDEHUHV FRQWURO FRPXQLWDULR \ SRGHU SRSXODU WHUULWRULDO 6DQWLDJR  8QSXEOLVKHG GRFWRUDO WKHVLV 6DQWLDJR GH &KLOH

8QLYHUVLGDGGH&KLOH )$/$%(//$$OHMDQGUD

 ³µ'HPRFUDFLD D OD FKLOHQD¶ 8Q DQiOLVLV GHO PRYLPLHQWR HVWXGLDQWLO \ VX GHVHQODFH´'RFHQFLD6DQWLDJRGH&KLOHSS

)(51È1'(=/$%%e-XDQ

 ³0RYLPLHQWR HVWXGLDQWLO HQ &KLOH  UHSHUWRULRV GH DFFLyQ PDUFRV GH DFFLyQFROHFWLYDLPSDFWRV\GHVDItRVSDUDODSROtWLFDS~EOLFD´&LUFXQVWDQFLD 0DGULG;, )2:(5$.(5-RH 7KHRUL]LQJVRFLDOPRYHPHQWV/RQGRQ3OXWR3UHVV *5266,3DROR $KLVWRU\RI(XURSHDQODZ/+RRSHUWUDQVO&KLFKHVWHU:HVW6XVVH[:LOH\ %ODFNZHOO +(*(/*HRUJ:LOKHOP)ULHGULFK 7KHSKLORVRSK\RIKLVWRU\0LQHROD1<'RYHU

/HFWXUHV RQ WKH SKLORVRSK\ RI ZRUOG KLVWRU\ ,QWURGXFWLRQ &DPEULGJH &DPEULGJH8QLYHUVLW\3UHVV D³7KHVFLHQFHRIODZVPRUDOVDQGUHOLJLRQ)RUWKHORZHUFODVV´,Q7KH SKLORVRSKLFDOSURSDHGHXWLF2[IRUG%DVLO%ODFNZHOO E³7KHVFLHQFHRIWKHFRQFHSW)RUWKHKLJKHUFODVV´,Q7KHSKLORVRSKLFDO SURSDHGHXWLF2[IRUG%DVLO%ODFNZHOO 7KHHQF\FORSDHGLDORJLFSDUW,RIWKHHQF\FORSDHLDRISKLORVRSKLFDOVFLHQFHV ZLWK WKH ]XVlW]H 7) *HUDHWV DQG :$ 6XFKWLQJ WUDQVO ,QGLDQDSROLV&DPEULGJH+DFNHWW 3KLORVRSK\RIULJKW6:'\GHWUDQVO1HZ<RUN3URPHWKHXV%RRNV ,,/<(1.29(YDOG9DVLO\HYLFK

 7KH LGHDO LQ KXPDQ DFWLYLW\ 3DFLILFD &$ 0DU[LVWV ,QWHUQHW $UFKLYHV 3XEOLFDWLRQV -$0,621$QGUHZ ³6RFLDOPRYHPHQWVDQGVFLHQFHFXOWXUDODSSURSULDWLRQVRIFRJQLWLYHSUD[LV´ 6FLHQFHDV&XOWXUH/RQGRQSS .(//<-RKQ0 $VKRUWKLVWRU\RI:HVWHUQOHJDOWKHRU\2[IRUG2[IRUG8QLYHUVLW\3UHVV .26Ë..DUHO 'LDOHFWLFVRIWKHFRQFUHWH$VWXG\RQSUREOHPVRI0DQDQGZRUOGYROXPH,, 'RUGUHFKW'5HLGHO /$55$Ë1&KULVWLDQDQG6DOYDGRU=XULWD ³7KHQHZVWXGHQWORDQV\VWHPLQ&KLOH¶VKLJKHUHGXFDWLRQ´+LJKHU(GXFDWLRQ 1HZ<RUNSS  

 0(/8&&,$OEHUWR

 &KDOOHQJLQJ FRGHV FROOHFWLYH DFWLRQ LQ WKH LQIRUPDWLRQ DJH &DPEULGJH &DPEULGJH8QLYHUVLW\3UHVV

2(&'

 (GXFDWLRQ LQ &KLOH UHYLHZV RI QDWLRQDO SROLFLHV IRU HGXFDWLRQ 3DULV 2(&' 3XEOLVKLQJ

6$/$=$5*DEULHO

 &RQVWUXFFLyQ GH (VWDGR HQ &KLOH 'HPRFUDFLD GH ORV SXHEORV PLOLWDULVPR

FLXGDGDQRJROSLVPRROLJiUTXLFR6DQWLDJRGH&KLOH(GLWRULDO6XGDPHULFDQD

(QHOQRPEUHGHOSRGHUSRSXODUFRQVWLWX\HQWH&KLOHVLJOR;;,6DQWLDJRGH &KLOH/20(GLFLRQHV

 0RYLPLHQWRV VRFLDOHV HQ &KLOH WUD\HFWRULD KLVWyULFD \ SUR\HFFLyQ SROtWLFD 6DQWLDJRGH&KLOH8TEDU(GLWRUHV

6,/9$3,12&+(7%HDWUL]

 /D 5HYROXFLyQ 3LQJLQD \ HO FDPELR FXOWXUDO HQ &KLOH %XHQRV $LUHV /DWLQ $PHULFDQ&RXQFLORI6RFLDO6FLHQFLHV&/$&62 60(/6(51HLO- 7KHRU\RIFROOHFWLYHEHKDYLRU1HZ<RUN)UHH3UHVV 612:'DYLG$6DUDK$6RXOHDQG+DQVSHWHU.ULHVL ³0DSSLQJWKHWHUUDLQ´,Q7KH%ODFNZHOOFRPSDQLRQWRVRFLDOPRYHPHQWV'$ 6QRZ6$6RXOHDQG+.ULHVLHGV2[IRUG%ODFNZHOO 7285$,1($ODLQ 6RFLRORJLHGHODFWLRQ3DULV6HXLO 75,%81$/&2167,78&,21$/ 6HQWHQFLDGHO7ULEXQDO&RQVWLWXFLRQDO1R6DQWLDJRGH&KLOH 7ULEXQDO&RQVWLWXFLRQDO  1DQ]DQ8QLYHUVLW\