An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a cumulative present value of 67% over seven years. This effect is more pronounced in thin labor markets and among small firms that are ultimately liquidated. Compensating wage differentials for this...

We document the valuation effects of bankruptcy announcements through technological relatedness. The average value of firms that intensively cite the technologies of a bankrupt firm decreases by 1% around the time of the bankruptcy announcement. The effects are not attributable to other economic...

Arguments that worker unionization leads to changes in productivity, employment, or business survival find little support in the literature. While unionization may have limited impact in good states, unionized workers are entitled to special treatment in bankruptcy court. This shift in...

This paper investigates how lending relationships attenuate the conflict of interest between creditors and shareholders that arises from CEO compensation contracts. We find that lending relationships mitigate the influence of CEO risk-taking incentives on loan spreads, especially for...

This paper investigates the impact of a firm's annual report readability and ambiguous tone on its borrowing costs. We find that firms with larger 10-K file sizes and a higher proportion of uncertain and weak modal words in 10-Ks have stricter loan contract terms and greater future stock price...

This paper quantifies the “human costs of bankruptcy” by estimating employee wage losses induced by the bankruptcy filing of employers using employee-employer matched data from the U.S. Census Bureau's LEHD program. We find that employee wages begin to deteriorate one year prior to...

This study explores the impact of state anti-takeover laws on the governance role of conditional accounting conservatism. Passage of these laws introduced an exogenous shock to the takeover threats faced by firms and constitutes a natural experiment for investigating the relation between...

This paper finds significant predictability in stock returns across technology-linked firms. Using patent-holding information to identify firms' technological linkage, we show that a long–short equity trading strategy sorted on lagged returns of technology-linked firms yields monthly alphas of...

This paper examines how credit risk spillovers affect corporate financial flexibility. We construct separate empirical proxies to disentangle the two channels of credit risk spillovers—credit risk contagion (CRC), where one firm's default increases the distress likelihood of another; and...

This study examines the effect of technology spillovers on firms' cash holdings. It finds that firms facing greater technology spillovers hold higher cash balances. This effect is more pronounced among financially constrained firms and for firms that are likely to benefit more from diffused...