We argue that the true transition-to-default dynamic in banks' credit portfolios can only be fully described with a multiple-spell discrete-time hazard model. This paper develops such a model for default prediction. The model permits the use of all data available to the bank or to the bank...

An employee's annual earnings fall by 10% the year her firm files for bankruptcy and fall by a 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 “bankruptcy...

Objective – The purpose of this study is to examine the influence of capital on bankruptcy banks. The hypothesis of this research is that capital has an effect on the bankruptcy of a bank.Methodology/Technique – This research examines financial reports between 2005-2014. An econometric model...

I examine large shareholders' externalities on other claim holders when firms are financially distressed. To this end, I develop a tractable dynamic model of the interplay between these blockholders and regular equity holders. Blockholders' information acquisition and investment decisions play a...

This study is motivated by the continuing popularity of the Altman Z-score as a measure of distress risk. Altman first introduced the ‘Z' score in 1968 and 50 years later it is still going strong as a means to predicting bankruptcy. During these 50 years, academicians have studied the...

We investigate the takeover strategies of high default risk acquirers and their value impact. We find that these bidders select bigger, less profitable and unrelated targets, pursue transactions during recessions, and pay with shares by offering target shareholders high premiums. Their long-term...

In the U.S., individuals who file for bankruptcy can protect a certain amount of property from creditor liquidation during the debt settlement process. Our analysis exploits changes in these laws to determine the impact on home mortgage lending. We find that the additional debtor protection...

This paper studies bankruptcy spillover effects onto portfolios of non-bankrupt firms in oil and gas industry. Using hand-collected data on bankruptcy filings in oil and gas industry from 2000 to 2017, I find that, on average, the value-weighted portfolios of non-bankrupt oil and gas firms...

We study the endogenous determination of corporate debt maturity in a setting with default risk. We assume that firms must access the bond market and they issue debt with a flexible structure (coupon, face value, and maturity). Initially, the firm is in a low growth/illiquid state that requires...