An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a cumulative present value … liquidated. Compensating wage differentials for this "bankruptcy risk" are approximately 2.3% of firm value for a firm whose … bankruptcy are of sufficient magnitude to be an important consideration in corporate capital structure decisions …

theory, firms with higher bankruptcy costs, i.e., smaller firms and firms with lower asset tangibility, choose capital … structures with higher bankruptcy risk. Further analysis suggests that the capital structures of smaller firms with lower asset … shocks, making them more susceptible to bankruptcy risk …

bankruptcy process. We show that the deadweight costs of bankruptcy can be avoided or substantially reduced through no … bankruptcy process to efficiently allow the renegotiation of labor contracts in certain cases. In sharp contrast to the human …-capital-based theories of optimal capital structure in which the renegotiation of labor contract in bankruptcy is a cost associated with …