In this paper, we present a model of defensive mergers and merger waves. We argue that mergers and merger waves can occur when managers prefer that their firms remain independent rather than be acquired. We assume that managers can reduce their chance of being acquired by acquiring another firm...

Many firms have stockholders who face severe restrictions on their ability to sell their shares and diversify the risk of their personal wealth. We study the costs of these liquidity restrictions on stockholders using a continuous-time portfolio choice framework. These restrictions have major...

Agency problems in firms are prevalent because of a scarcity of wealthy principals with corporate governance ability, whom we call “restructuring specialists.” We investigate how this scarce resource, “agency cost-free capital,” is allocated. We show that the restructuring specialists...

Die vorliegende Arbeit untersucht über den Zeitraum von 1994 bis 2004 die kommunale Finanzsituation der Stadt Potsdam. Anhand eines Kennzahlensystems, das aus den Daten der entsprechenden kommunalen Haushaltspläne entwickelt wurde, konnten Aussagen über die Entwicklung der Einnahmen und...

Many firms emerging from a debt restructuring remain highly leveraged, continue to invest little, perform poorly, and often reenter financial distress. The existing literature interprets these findings as inefficiencies arising from coordination problems among many creditors or an inefficient...

This paper follows the process of financial distress from its onset to its resolution for a sample of 95 firms. Only about one-third of the firms survive as independent companies. A firm's short-run and long-run survival probability is positively affected by its operating performance, but its...

Many firms have stockholders who face severe restrictions on their ability to sell their shares and diversify the risk of their personal wealth. We study the costs of these liquidity restrictions on stockholders using a continuous-time portfolio choice framework. The economic cost of these...