Theory suggests that corporate and sovereign bonds are fundamentally different, also because sovereign debt has no bankruptcy mechanism and is hard to enforce. We show empirically that the two assets are more similar than you think, at least when it comes to high-yield bonds over the past 20...

The aim of this work is to analyze the factors that help companies avoid liquidation following the spirit of the Spanish insolvency law. This work focuses on the phase starting when companies file for bankruptcy and ending with the completion of the common phase. We apply the agency theory to...

I develop a banking model with monopolistic competition to analyze the effect of reserve rate policy on bank insolvency risk, when banks are constrained by a zero lower bound on deposit rates. When binding, the lower bound compresses the solvency relevant deposit spread and causes it to be a...

Our investigation examined the impact of ESG (Environmental, Social, and Governance) activities on corporate financial distress. This research utilised data from companies listed in the FTSE All-Share index from 2014 to 2022 from the Refinitiv EIKON database. We incorporated year- and...

Theory suggests that corporate and sovereign bonds are fundamentally different, also because sovereign debt has no bankruptcy mechanism and is hard to enforce. We show empirically that the two assets are more similar than you think, at least when it comes to high-yield bonds over the past 20...

We develop a simple model of financial intermediation with search and matching frictions between banks and firms. The model links credit market tightness -encapsulating the abundance of credit- to the search and opportunity costs of credit intermediation. Search costs generate lending to...

Healthcare firms are filing for Chapter 11 bankruptcy at record rates. We find that bankruptcies increase healthcare staff turnover, worsen care, and ultimately harm patients. Using a difference-in-differences design, we estimate that a bankruptcy filing immediately increases staff turnover...

Die Anzahl der Unternehmensinsolvenzen in Deutschland steigt derzeit kräftig, und ein Ende des Anstiegs ist noch nicht absehbar. Der fast zwei Jahrzehnte währende Abwärtstrend, der in einem Einbruch der gemeldeten Insolvenzen in der Covid-19-Pandemie kulminierte, ist damit gebrochen worden....

This study investigates the influences of financial performance and economic determinants (inflation rate and economic growth) on financial distress (FD) in the MENA region in the context of the contagion effect theory and Minsky's financial instability theory. This paper examines the...

We develop a simple model of financial intermediation with search and matching frictions between banks and firms. The model links credit market tightness - encapsulating the abundance of credit - to the search and opportunity costs of credit intermediation. Search costs generate lending to...

The COVID-19 pandemic triggered widespread economic disruptions, raising concerns about surging bankruptcy rates globally. Italy, one of the hardest-hit countries, faced significant risks of business insolvency. This paper empirically investigates the short-term impact of government...

This study investigates carbon pricing-induced credit risk, the potential negative impact of carbon pricing on firms' ability to meet their financial obligations. Applying a well-established credit assessment model to a novel data set combining financial statements and emissions data, we subject...

Research on government procurement emphasizes its positive impacts, while paying insufficient attention to the risks posed by government arrears. We show that the implementation of China's Special Supervision Action for Repaying Government Arrears significantly enhances employee treatment,...

Background: Corporate bonds are crucial for corporations as they provide a flexible and often less costly alternative to equity financing. However, rising corporate debt levels, along with rating downgrades and economic uncertainty, can cause corporations to face financial distress, exacerbating...

Using linked employer-employee data combined with administrative data on debt enforcement, we analyze the impact of job loss on debt problems in Finland, where even 50% of income may be subject to wage garnishment for up to 25 years. Our results show that job loss, defined by plant closures and...

We examine the 2025 U.S. debt limit episode through the lens of financial markets. First, we document an increase in trading activity in the U.S. sovereign CDS market, and we infer a probability of default from CDS premiums. We find that default risk reached 1% by the November 6 Presidential...

European insolvency frameworks have improved considerably over recent years. However, they still lag best practice in terms of both creditor recovery and the ability to restructure complex firms. Moreover, they tend to push restructuring out of court or to foreign jurisdictions and potentially...

This paper assesses whether fintech mortgage lenders align pricing with borrower risk using conforming 30-year mortgages (2012-2020). We estimate default probabilities using machine learning (logit, random forest, gradient boosting, LightGBM, XGBoost), finding that non-fintech lenders achieve...

This paper documents a new consequence of market integration: local reallocation, i.e., the exit of some workers from production even though employment increases in the same area and industry. Thanks to new data on over 150,000 personal bankruptcies combined with detailed microcensus data from...

This study advances research on the nexus of business insolvency and entrepreneurs' well-being. We broadly build upon the Conservation of Resources Theory (COR) and explore the severity of the impact of firm insolvency on subjective well-being, stress hormones, and physiological recovery. To...

Well-being is important to entrepreneurs, yet entrepreneurship does not necessarily foster well-being. Stressful work conditions such as venture distress might put entrepreneurs' well-being under pressure. Drawing upon self-determination theory, we investigate the conditions that enhance...