We investigate the relationship between bankruptcy risk and expected future sales growth for Norwegian non-listed firms for the period 1988-2007. We find that firms with high bankruptcy risk also have high expected future growth. Financial ratios characterizing firms with high bankruptcy risk...

We study the impact of the COVID-19 recession on capital structure of publicly listed U.S. firms. Our estimates suggest leverage (Net Debt/Asset) decreased by 5.3 percentage points from the pre-shock mean of 19.6 percent, while debt maturity increased moderately. This de-leveraging effect is...

We show how to measure the welfare effects arising from increased data availability. When lenders have more data on prospective borrower costs, they can charge prices that are more aligned with these costs. This results in an increase in total social welfare, and a transfer of surplus from...

We document the importance of a financial sponsor when a borrower violates a covenant, providing creditors the opportunity to enforce debt contracts. We identify private-equity (PE) sponsored borrowers in the Shared National Credit Program (SNC) data and find PE-sponsored borrowers violate...

PurposeThis paper aims to study the effect of the establishment of bankruptcy courts on bond issuance market. This paper helps to predict that the introduction of bankruptcy courts in China can mitigate price distortions caused by the implicit government guarantees and promote the development of...

This study investigates the inter-relationship between audit committee effectiveness, bank efficiency and risk-taking in seven ASEAN countries for the period 2010-2019. By using three-stage least squares (3SLS) method, we contribute to literature the relationship between audit committee...

We document the importance of a financial sponsor when a borrower violates a covenant, providing creditors the opportunity to enforce debt contracts. We identify private-equity (PE) sponsored borrowers in the Shared National Credit Program (SNC) data and find PE-sponsored borrowers violate...

This paper aims to develop a credit-risk model in which firms face rollover risk, and the markets for defaulted assets are segmented due to entry costs. The paper shows that reducing the entry costs in this economy may decrease the total surplus of the economy. This outcome can arise because...

In the context of stock markets, the financial economics literature has developed the concept of “operational efficiency” which is known to be essential in performing their economic role. Operationally efficient (liquid) markets allow investors to get their orders executed quickly and as...

In 2008, AIG found itself on the brink of failure and required the Federal Reserve to step in with billions of dollars of taxpayer money. The causes of AIG's collapse have been described in numerous articles and official reports since then. Albeit some nuances, all analyzes point to AIG's credit...