This study theoretically examines under what circumstances economic cycles advance or deter corporate defaults. We find that an ongoing catastrophe dominates other macroeconomic conditions and forces corporate failures. In contrast, when a catastrophe is unlikely, a constant economy permits...

In this study we theoretically simulate default risk scenarios under various economic noises. We find that firms default more quickly with stronger economic shocks but simultaneously expose higher default probabilities during their deterioration, offering traders better visibility. When the...

This article explores the correlation between exchange rate exposure and multinationals' credit risk. Existing credit risk models do not distinguish between domestic and multinational companies, thus excluding the unique implications of exchange rate exposure on multinationals' credit risk....

In this study we contrast bankruptcy section 363 Sales with the traditional path of chapter 11 reorganization. We find that the likelihood to find a potential purchaser, the level of asymmetric information between shareholders and creditors, the extent of corporate sustainability, profitability,...

We examine corporate exit resolutions, including the decisions to merge, to be acquired, and to file for bankruptcy, as a result of long-term deployment of generic competitive strategies among rival firms. We construct a theory that forecasts diverse exit outcomes and demonstrate its predictions...

In this paper we theorize how bondholders and shareholders negotiate debt covenants after a firm has already filed for bankruptcy. This event triggers unique turmoil in the transfer of control rights between shareholders and creditors, and it further opens a window of opportunity for...

Purpose – This study seeks to explore developments in corporate creditworthiness before and after ownership events. Design/methodology/approach – The paper uses the Blockholders database of Dlugosz, Fahlenbrach, Gompers, and Metrick, and three credit quantities, and deploys a standard event...