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The Economics of Bankruptcy : An Introduction to the Literature

Morrison, Edward R. - 2016

This essay surveys important contributions to the economics of bankruptcy. It is an introductory chapter for a forthcoming volume (from Edward Elgar Press) that compiles the work of legal scholars as well as economists working in the field of corporate finance. The essay begins with the...

Persistent link: https://www.econbiz.de/10013008997

The Economic Costs of Financial Distress

Custodio, Claudia - 2020

We estimate the economic costs of financial distress by exploiting cross-supplier variation in real estate assets and leverage, and the timing of real estate shocks. We show that for the same client buying from different suppliers, its purchases from distressed suppliers decline by an additional...

Persistent link: https://www.econbiz.de/10012850487

Industrial Policy, Productivity and Zombie Firms

Huang, Shaoqing; Xie, Weisi; Xu, Xiaoshu - 2021

We analyze the causal impact of the industrial policy structure on the formation of zombie firms, using a rich data set of manufacturing firms in China between 1998 and 2007. We find that selective industrial policy schemes increase zombie shares in skill intensive sectors, because as subsidized...

Persistent link: https://www.econbiz.de/10013233829

The Leverage Externalities of Credit Default Swaps

Li, Jay Y. - 2015

This paper provides the first empirical evidence of the externalities of credit default swaps (CDS). We find that a firm's leverage is lower when a larger proportion of its revenue is derived from CDS-referenced customers. This finding is robust to alternative samples and measures, placebo...

Persistent link: https://www.econbiz.de/10013032003

The Leverage Externalities of Credit Default Swaps

Li, Jay Y. - 2014

This paper provides the first empirical evidence of the externalities of credit default swaps (CDS). We find that a firm's leverage is lower when a larger proportion of its revenue derives from customers referenced by CDS. This finding is robust to alternative samples and measures, placebo...

Persistent link: https://www.econbiz.de/10013062471

Financial and economic determinants of firm default

Bottazzi, Giulio; Grazzi, Marco; Secchi, Angelo; … - 2021

The study of firms' default has attracted wide interest among both practitioners and scholars. However, attention has often been limited to a relatively small set of financial variables. In this work, we try to increase the scope of analysis extending the investigation to other possible...

Persistent link: https://www.econbiz.de/10013314625

The aggregate consequences of default risk : evidence from firm-level data

Besley, Timothy; Roland, Isabelle; Van Reenen, John - 2020

This paper studies the implications of perceived default risk for aggregate output and productivity. Using a model of credit contracts with moral hazard, we show that a firm's probability of default is a sufficient statistic for capital allocation. The theoretical framework suggests an aggregate...

Persistent link: https://www.econbiz.de/10012241111

Estimating Dynamic Models with Aggregate Shocks and an Application to Mortgage Default in Colombia

Carranza, Juan Esteban; Navarro, Salvador - 2010

We estimate a dynamic model of mortgage default for a cohort of Colombian debtors between 1997 and 2004. We use the estimated model to study the effects on default of a class of policies that affected the evolution of mortgage balances in Colombia during the 1990's. We propose a framework for...

Persistent link: https://www.econbiz.de/10014194037

Exit, Sunk Costs and the Selection of Firms

Garella, Paolo G.; Richelle, Yves - 2000

This paper aims to identify the cost characteristics of exiting firms whenever firms are playing an infinite horizon supergame with time-invariant cost and demand functions. With more than two firms, the problem of which firms exit is quite similar to a coalition formation one. Solving this...

Persistent link: https://www.econbiz.de/10014194821

Changes in and Insights on Potential Industry and Enterprise Insolvency in the Manufacturing Sector

Oh, Young-Seok; Park, Sung Keun - 2023

This paper takes the spectrum approach to identify possible industrial and enterprise insolvency and goes on to conduct … a composite analysis of both the potential industry insolvency spectrum and enterprise insolvency spectrum. Recently …, the proportion of industries and enterprises showing signs of insolvency in Korea’s manufacturing sector has been on the …

Persistent link: https://www.econbiz.de/10014263110