We relate the firm legal structure to the degree of credit advantage of the headquarters. We argue that subsidiary-based firms are born as the outcome of a process of agglomeration around firms with better credit advantage. Therefore, subsidiary based firms have better credit advantage than...

This paper explores the spillover effects of Hurricane Katrina on corporate bonds through the liquidations of bond holdings by property and reinsurance companies exposed to the Katrina shock. We find that the sales of exposed property and reinsurance companies create a persistent negative price...