Leverage and pricing of debt in LBOs

We show that the structure and pricing of debt in LBOs mostly depend on a single characteristic of the target firm, pre-LBO profitability. We find a positive relationship between pre-LBO profitability and deal leverage that is consistent with a dynamic trade-off theory of capital structure in the presence of adjustment costs. We argue that the wide range of debt tranches used in LBO financing can be folded into two main categories, senior and junior debt, where the pricing of senior and junior debt depends on their relative use and on bankruptcy risk. Our evidence also suggests that senior lenders oversupply cheap credit during hot buyout markets.     

The voluntary provision of a pure public good? Another look at CFC emissions and the Montreal Protocol

Based on their finding of a positive and nearly linear relationshipbetween GNP and reductions of chlorofluorocarbon (CFC) emissionsin the run-up to the Montreal Protocol, Murdoch and Sandler(1997) have argued that the treaty's initial emission targetswere consistent with voluntary provision of abatement ratherthan cooperative behavior. This paper documents that their analysisrelies on largely imputed emission data that overstate emissionreductions compared to emission data that countries reportedto UNEP. The imputation procedure appears to induce a spuriouspositive correlation between income and CFC reductions. In areplication of the econometric analysis using UNEP data, thehypothesis of a positive and linear relationship between thetwo variables is rejected. These findings call for a more cautiousinterpretation of emission targets set by the Montreal Protocoland alert researchers to important limitations of a data setthat has been widely used in empirical studies of this treaty.     

An Observation Station for Culture and Tourism in Vietnam: A Forum for World Heritage and Public Participation

World Heritage is increasingly approached in an international context and it seems appropriate for the protection of World Heritage sites in our globalised world. However, we should question whether or not the global aspects are not over-emphasised, leaving behind local and national interests. Increasing the number of stakeholders in the selection process of World Heritage sites, especially those mostly excluded from any decision-making process, seems to be a promising approach. It enlarges the debate and facilitates consensus at all levels on how to promote and to protect World Heritage. The creation of an observation station, together with a new local selection system of cultural heritage sites, a kind of participatory budget of cultural heritage, would be an important step in integrating more civic perception into World Heritage policy.     

Sustainable Tourism Development in Developing Countries: Some Aspects of Energy Use

Tourism has, in recent years, received increasing attention as a low-impact, non-consumptive development option, in particular for developing countries. This positive view contrasts with the fact that major parts of the tourist industry have remained harmful to the environment and that some aspects, like the use of energy and its global consequences have virtually been excluded from the discussion on sustainable tourism development. In this article, the evolution of tourism paradigms is reviewed with a focus on developing countries. It is shown that tourism has become of prime economic importance for many developing countries, in particular small island states. However, as the cash income generated by tourism is mainly derived from visitors coming from industrialised countries, who have to rely on air travel to arrive at their destination, the issue of energy use is analysed from an ecological perspective. It is shown that the tourism-related use of fossil fuels is significant and has detrimental environmental consequences. Afforestation programmes are discussed as a strategy to overcome the negative effects associated with the emission of greenhouse gases. Overall, it is claimed that energy use is an issue that urgently needs to be integrated into the discourse on sustainable tourism development.