specify default, renegotiation and reorganization policies. Renegotiation entails a redistribution of social surplus, while … reorganization takes the form of enhanced creditor monitoring. Firms with better contract histories are less likely to default, but … monitoring is too costly, renegotiation leads to reorganization, which resembles actual bankruptcy practice. We calibrate the …

We examine merger activity and its effect on asset pricing in a firm network economy. Mergers create internal capital …. The possibility of a merger increases the equity value of standalone firms. Higher network dep endence generally increases … merger activity but nevertheless causes lower firm equity values. Recession and expansion, as measured by the average debt …

with buyers, location and the use of other MEPA negotiation tools, also emerge as relevant factors of success in the e …