Corporate debt maturity and future firm performance volatility

We propose a simple idea that corporate debt maturity should serve as a good indicator of future firm performance volatility. We show in a simple two-period model that the riskiness of corporate investment is a decreasing function of corporate debt maturity. If “observable” corporate debt maturity and ex ante “unobservable” corporate risk-taking is highly correlated, corporate debt maturity should be highly correlated with “ex post” realized firm performance volatility in following years. Using data on firms in 10 developing and developed countries during 1991−2013, we find that corporate debt maturity is negatively associated with future firm operating performance volatility but is not associated with future firm value volatility

The impact of the banking sector on economic structure and growth

In this paper, we study the impact of banking sector development on changes in economic structure and growth. We argue that banking sector development has differential effects on industrial sector development and agricultural sector development. We test whether economic structure and growth foster banking sector development. To test our hypotheses, we construct a panel sample of all countries in the world during 1960−2016. We find that banking sector development has a negative effect on agricultural sector development but exerts no effect on industrial sector development. The negative effect of banking sector development on agricultural sector development is only observed for countries with high degrees of banking sector development. Our results further show that agricultural sector development exerts a negative effect on banking sector development while industrial sector development has a positive effect on banking sector development

Bank systemic risk and corporate investment: Evidence from the US

In this paper, we use three measures that arguably capture two dimensions of “bank systemic risk”, namely, (1) bank funding maturity and (2) bank asset commonality, to empirically test whether bank systemic risk has a positive effect on corporate investment. We document that in a sample of publicly listed firms in the United States over the period 1991-2013, bank systemic risk is positively associated with the firm-level investment ratio after controlling for a large set of country-level and firm-level variables. In addition, we show that a firm’s leverage strengthens the positive effect of bank systemic risk on corporate investment, suggesting that more financially constrained firms experience a larger effect of bank systemic risk on corporate investment than less financially constrained firms

Systolic Function in the Fontan Circulation Is Exercise, but Not Preload, Recruitable

Background - Fontan circulatory failure with impaired systolic function is well documented; however, its mechanisms are not fully understood. The aim of this study was to explore myocardial functional reserve in adolescent patients with Fontan circulation in response to exercise or acute preload increase. Methods - The study included 32 patients (median age, 16.7 years; range, 15.4–17.9 years; 12 female patients) with Fontan circulation. Echocardiographic imaging was performed during exercise using a recumbent cycle ergometer and during heart catheterization with a rapid infusion of 0.9% saline infusion at 5 mL/kg body weight. Myocardial peak longitudinal strain (LS) was measured in a four-chamber view during specific time intervals before, during, and after exercise (LSstress) and volume load (LScath). During catheterization, central venous pressure and ventricular end-diastolic pressure were simultaneously recorded. A control group of 16 healthy individuals participated in the exercise test. Results - Mean LSstress was less negative for patients than for control subjects (P ≤ .001 at all stages); however, it significantly improved from −18.4 ± 5.5% at baseline to −22.0 ± 6.5% (P = .004) at maximal loading. LSstress at maximal loading did not correlate with changes in heart rate. During catheterization, mean LScath was −19.6 ± 6.0% at baseline and did not improve significantly at 1.00 to 2.00 minutes and at 4.00 to 6.00 minutes after saline infusion. In more than half of the patients, LScath worsened or improved by less than −2% after saline infusion. Worsening of LScath correlated with central venous pressure and ventricular end-diastolic pressure in all conditions (P ≤ .017). There was no difference in LSstress or LScath between the morphologic right ventricle and the morphologic left ventricle. Conclusions - Patients with Fontan circulation demonstrate systolic myocardial functional reserve that can be recruited with exercise stress but not with an acute increase in preload

Corporate governance and financial stability in US banks: Do indirect interlocks matter?

In the context of the Depository Institution Management Interlocks Act of 1978 (Interlocks Act), we investigate the structure and implications of the professional connections among bank directors. Based on a hand-collected unique dataset for a sample of 168 US commercial banks listed continuously from 2009 to 2015, we find that the barriers set out in the Interlocks Act have been circumvented by the establishment of indirect interlocks that allow for mass professional connections among bank directors. Our evidence suggests that bank well-connectedness through indirect interlocks has a significant impact on financial stability. In particular, we find, in support of the extended resource-based view (RBV), that well-connected banks mitigate their credit and insolvency risks but, contrary to our expectation, lower bank capitalisation. Our evidence suggests that the Interlocks Act and bank governance reforms need to consider the role of professional communications among bank directors to fully achieve their intended goals