as a reduction in bankruptcy-related costs. This trend raises the question as to what drives the frequency with which … default decreases with bankruptcy costs and it increases with the frequency of strategic default – that is, default by firms … which could have honored their obligations. When bankruptcy costs decrease, creditors obtain higher recovery rates out …

value of assets. The costs vary from 14.7% for bond renegotiations to 30.5% for bankruptcies, and are substantially higher …

This paper examines bankruptcy costs using market prices of equity and put options during the financial crisis. Our … approach avoids the downward selection bias and the upward bias when using the tradeoff theory to estimate bankruptcy costs …. While the average bankruptcy cost is about 20%, we find wide variation across and within industries. Costs are related …

This paper studies the effects of making corporate sector assets eligible as collateral for central bank borrowing …. Banks are willing to pay collateral premia on assets if they become eligible as collateral. Collateral premia make debt … collateral supply, firm responses also have a negative effect: higher debt issuance makes corporate bonds riskier in future …

-exempt assets are liquidated. Entrepreneurs can undo this “insurance” by posting collateral. The opportunity cost of doing so is … exemption increases, collateral becomes a more effective sorting device. As a result, an entrepreneur's decision to post … collateral improves access to credit and reduces the cost of credit to a greater extent the larger the exemption is. Econometric …