Snow and leverage

Using a sample of highly (over-)leveraged Austrian ski hotels undergoing debt restructurings, we show that reducing a debt overhang leads to a significant improvement in operating performance (return on assets, net profit margin). In particular, a reduction in leverage leads to a decrease in overhead costs, wages, and input costs, and to an increase in sales. Changes in leverage in the debt restructurings are instrumented with Unexpected Snow, which captures the extent to which a ski hotel experienced unusually good or bad snow conditions prior to the debt restructuring. Effectively, Unexpected Snow provides lending banks with the counterfactual of what would have been the ski hotel's operating performance in the absence of strategic default, thus allowing to distinguish between ski hotels that are in distress due to negative demand shocks ("liquidity defaulters") and ski hotels that are in distress due to debt overhang ("strategic defaulters")

Does Corporate Governance Matter in Competitive Industries?

By reducing the fear of a hostile takeover, business combination (BC) laws weaken corporate governance and create more opportunity for managerial slack. Using the passage of BC laws as a source of identifying variation, we examine if such laws have a different effect on firms in competitive and non-competitive industries. We find that while firms in non-competitive industries experience a substantial drop in operating performance, firms in competitive industries experience virtually no effect. Though consistent with the general notion that competition mitigates managerial agency problems, our results are, in particular, supportive of the stronger Alchian-Friedman-Stigler hypothesis that managerial slack cannot exist, or survive, in competitive industries. When we examine which agency problem competition mitigates, we find evidence in favor of a “quiet-life” hypothesis. While capital expenditures are unaffected by the passage of BC laws, input costs, wages, and overhead costs all increase, and only so in non-competitive industries. We also conduct event studies around the dates of the first newspaper reports about the BC laws. We find that while firms in non-competitive industries experience a significant decline in their stock prices, firms in competitive industries experience a small and insignificant price impact

Capital and Labor Reallocation within Firms

We document how a positive shock to investment opportunities at one plant (“treated plant”) spills over to other plants within the same firm, but only if the firm is financially constrained. To provide the treated plant with resources, the firm's headquarters withdraws capital and labor from other plants, especially plants that are relatively less productive, not part of the firm's core industries, and located far away from headquarters. As a result of the resource reallocation, aggregate firm-wide productivity increases. We do not find evidence of capital or labor spillovers among plants of financially unconstrained firms

Does Corporate Governance Matter in Competitive Industries?

By reducing the threat of a hostile takeover, business combination (BC) laws weaken corporate governance and increase the opportunity for managerial slack. Consistent with the notion that competition mitigates managerial slack, we find that while firms in non-competitive industries experience a significant drop in operating performance after the laws' passage, firms in competitive industries experience no significant effect. When we examine which agency problem competition mitigates, we find evidence in support of a "quiet-life" hypothesis. Input costs, wages, and overhead costs all increase after the laws' passage, and only so in non-competitive industries. Similarly, when we conduct event studies around the dates of the first newspaper reports about the BC laws, we find that while firms in non-competitive industries experience a significant stock price decline, firms in competitive industries experience a small and insignificant stock price impact.

Snow and Leverage

Using a sample of highly (over-)leveraged Austrian ski hotels undergoing debt restructurings, we show that reducing a debt overhang leads to a significant improvement in operating performance (return on assets, net profit margin). In particular, a reduction in leverage leads to a decrease in overhead costs, wages, and input costs, and to an increase in sales. Changes in leverage in the debt restructurings are instrumented with Unexpected Snow , which captures the extent to which a ski hotel experienced unusually good or bad snow conditions prior to the debt restructuring. Effectively, Unexpected Snow provides lending banks with the counterfactual of what would have been the ski hotel’s operating performance in the absence of strategic default, thus allowing to distinguish between ski hotels that are in distress due to negative demand shocks (“liquidity defaulters”) and ski hotels that are in distress due to debt overhang (“strategic defaulters”).

Does Corporate Governance Matter in Competitive Industries?

By reducing the fear of a hostile takeover, business combination (BC) laws weaken corporate governance and create more opportunity for managerial slack. Using the passage of BC laws as a source of identifying variation, we examine if such laws have a different effect on firms in competitive and non-competitive industries. We find that while firms in non-competitive industries experience a substantial drop in operating performance, firms in competitive industries experience virtually no effect. Though consistent with the general notion that competition mitigates managerial agency problems, our results are, in particular, supportive of the stronger Alchian-Friedman-Stigler hypothesis that managerial slack cannot exist, or survive, in competitive industries. When we examine which agency problem competition mitigates, we find evidence in favor of a “quiet-life” hypothesis. While capital expenditures are unaffected by the passage of BC laws, input costs, wages, and overhead costs all increase, and only so in non-competitive industries. We also conduct event studies around the dates of the first newspaper reports about the BC laws. We find that while firms in non-competitive industries experience a significant decline in their stock prices, firms in competitive industries experience a small and insignificant price impact

Transmyocardial laser revascularisation in acutely ischaemic myocardium

Objective: Although recent experience suggests that transmyocardial laser revascularisation (TMLR) relieves angina, its mechanism of action remains undefined. We examined its functional effects and analysed its morphological features in an animal model of acute ischaemia. Methods: A total of 15 pigs were randomised to ligation of left marginal arteries (infarction group, n=5), to TMLR of the left lateral wall using a holmium:yttrium-aluminium garnet (Ho:YAG) laser (laser group, n=5), and to both (laser-infarction group, n=5). All the animals were sacrificed 1 month after the procedure. Haemodynamics and echocardiography with segmental wall motion score were carried out at both time intervals (scale 0-3: 0, normal; 1, hypokinesia; 2, akinesia; 3, dyskinesia). Histology of the involved area was analysed. Results: Laser group showed no change of the segmental wall motion score of the involved area 30 min after the laser channels were made (score: 0±0). Infarction and laser-infarction groups both showed a persistent and definitive increase of the segmental wall motion score (at 30 min: 1.6±0.3 and 2±0, respectively; at 1 month: 1.8±0.2 and 1.8±0.4, respectively). These increases were all statistically significant in comparison with baseline values (P<0.5), however comparison between infarction and laser-infarction groups showed no significant difference. On macroscopic examination of the endocardial surface, no channel was opened. On histology, there were signs of neovascularisation around the channels in the laser group, whereas in the laser-infarction group the channels were embedded in the infarction scar. Conclusions: In this acute pig model, TMLR did not provide improvement of contractility of the ischaemic myocardium. To the degree that the present study pertains to the clinical setting, the results suggest that mechanisms other than blood flow through the channels should be considered, such as a laser-induced triggering of neovascularisation or neural destructio

Impact of duration of chest tube drainage on pain after cardiac surgery

Objective: This study was designed to analyze the duration of chest tube drainage on pain intensity and distribution after cardiac surgery. Methods: Two groups of 80 cardiac surgery adult patients, operated on in two different hospitals, by the same group of cardiac surgeons, and with similar postoperative strategies, were compared. However, in one hospital (long drainage group), a conservative policy was adopted with the removal the chest tubes by postoperative day (POD) 2 or 3, while in the second hospital (short drainage group), all the drains were usually removed on POD 1. Results: There was a trend toward less pain in the short drainage group, with a statistically significant difference on POD 2 (P=0.047). There were less patients without pain on POD 3 in the long drainage group (P=0.01). The areas corresponding to the tract of the pleural tube, namely the epigastric area, the left basis of the thorax, and the left shoulder were more often involved in the long drainage group. There were three pneumonias in each group and no patient required repeated drainage. Conclusions: A policy of early chest drain ablation limits pain sensation and simplifies nursing care, without increasing the need for repeated pleural puncture. Therefore, a policy of short drainage after cardiac surgery should be recommende

Hemodynamics optimization during off-pump coronary artery bypass: the ‘no compression' technique

Objective: Heart manipulation during OPCAB may cause hemodynamical instability in particular for access to the posterior and lateral walls. The ‘no compression' technique involves enucleation of the heart without any compression on the cavities, and stabilization of the target area with a suction device. The impact of this technique on hemodynamics is assessed. Methods: In order to analyze a homogeneous group, 26 consecutive patients with triple grafts, one to each side of the heart in the same sequential order (posterior, lateral and anterior wall successively) were selected. Heart rate (HR), mean pulmonary arterial pressure (PAP, mmHg), pulmonary capillary wedge pressure (PCWP, mmHg), mean arterial pressure (MAP, mmHg), cardiac output index (COI, l/min per m2), and central venous saturation (SvO2,%) were monitored. A coronary shunt was used for all the anastomoses. Results: HR was stable with baseline value of 60±10 and the highest value for the anterior wall, 63.6±8 (P=0.23). PAP and PCWP exhibited their highest increase, when compared with baseline, for the lateral wall, 23.9±4.7 vs. 20.7±6.2 (P=0.06), and 17.2±4.7 vs. 14.9±5.6 (P=0.16), respectively. MAP, COI and SvO2, exhibited their largest drop, when compared with baseline, for the lateral wall too, 73.1±9.1 vs. 77.1±7.5 (P=0.12), 1.99±0.47 vs. 2.26±0.55 (P=0.09), and 70.5±8.4 vs. 74.8±9.3 (P=0.12), respectively. Conclusions: None of the hemodynamical parameter differed significantly from baseline value for all three territories. While hemodynamics was perfectly maintained during the posterior and anterior walls revascularization, exposure of the lateral wall led to marginal changes onl

High prevalence of unsuspected abdominal aortic aneurysms in patients hospitalised for surgical coronary revascularisation

Objectives: Prevalence of abdominal aortic aneurysms (AAA) is not exactly known among patients with coronary artery disease (CAD) who are considered for surgical revascularisation. We evaluated the value of screening AAA among coronary patients admitted in our cardiovascular surgery unit. Methods: Over a 24-month period, an abdominal echography was proposed to male patients aged 60 or more while hospitalised for surgical coronary revascularisation. Patients with previous investigation of the aorta were excluded. The aorta was considered aneurysmal when the anterior-posterior diameter was of 30 mm or more. Results: Three hundred and ninety-five consecutive patients all accepted a proposed abdominal echographic screening for AAA. Forty unsuspected AAA were detected (10.1%). The mean diameter was 38.9±1.3 mm. Four AAA were larger than 50 mm and considered for surgery after the CABG procedure. Surveillance was proposed to the other 36, especially the 10 patients with an AAA larger than 40 mm. Patients with AAA were significantly older than those without AAA (71.3±0.8 vs. 69.4±0.3 years, P<0.05). Smoking history (P<0.05) and hypertension (P<0.05) were also associated more frequently with AAA. More than 16% of the patients being smokers and suffering hypertension presented with unsuspected AAA. Conclusions: In-hospital screening of AAA is very efficient among patients with coronary artery disease. Therefore, patients with CAD may be considered for routine AAA screenin