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The bank as grim reaper : debt composition and bankruptcy thresholds

Carey, Mark S.; Gordy, Michael B. - 2016

We offer a model and evidence that private debtholders play a key role in setting the endogenous asset value threshold below which corporations declare bankruptcy. The model, in the spirit of Black and Cox (1976), implies that the recovery rate at emergence from bankruptcy on all of the firm's...

Persistent link: https://www.econbiz.de/10011578370

Confronting the zombies : policies for productivity revival

Andrews, Dan; McGowan, Muge Adalet; Millot, Valentine - 2017

much scope to improve the design of insolvency regimes in order to reduce the barriers to restructuring of weak firms and … the personal costs associated with entrepreneurial failure. Insolvency regime reform can not only address the … markets. As the zombie firm problem may partly stem from bank forbearance, complementary reforms to insolvency regimes are …

Persistent link: https://www.econbiz.de/10011779088

Flexible prices and leverage

D'Acunto, Francesco; Liu, Ryan; Pflueger, Carolin; … - 2017

The frequency with which firms adjust output prices helps explain persistent differences in capital structure across firms. Unconditionally, the most exible-price firms have a 19% higher long-term leverage ratio than the most sticky-price firms, controlling for known determinants of capital...

Persistent link: https://www.econbiz.de/10011597779

The real effects of bank distress : evidence from bank bailouts in Germany

Bersch, Johannes; Degryse, Hans; Kick, Thomas; Stein, Ingrid - 2019

How does bank distress impact their customers' probability of default and trade credit availability? We address this question by looking at a unique sample of German firms from 2000 to 2011. We follow their firm-bank relationships through times of distress and crisis, featuring the different...

Persistent link: https://www.econbiz.de/10012108717

Quality of institutions, credit markets and bankruptcy

Hainz, Christa - 2004 - August, 2004 - draft

The number of firm bankruptcies is surprisingly low in economies with poor institutions. We study a model of bank-firm relationship and show that the bank's decision to liquidate bad firms has two opposing effects. First, the bank gets a payoff if a firm is liquidated. Second, it loses the rent...

Persistent link: https://www.econbiz.de/10010440454

Equilibrium theory of banks' capital structure

Gale, Douglas; Gottardi, Piero - 2017

We study an environment where the capital structure of banks and firms are jointly determined in equilibrium, so as to balance the benefits of the provision of liquidity services by bank deposits with the costs of bankruptcy. The risk in the assets held by firms and banks is determined by the...

Persistent link: https://www.econbiz.de/10011688427

Debt restructuring with multiple bank relationships

Baglioni, Angelo; Colombo, Luca; Rossi, Paola - 2019

When the debt of firms in distress is dispersed, a restructuring agreement is difficult to reach because of free riding. We develop a repeated game in which banks come across each other frequently, allowing them to threaten a punishment in case of free riding. As the number of lending banks...

Persistent link: https://www.econbiz.de/10011962128

Bank-firm relationships and the performance of non-financial firms during the financial crisis 2008 - 09 : microeconometric evidence from large-scale firm-level data

Abildgren, Kim; Buchholst, Birgitte Vølund; Staghøj, Jonas - 2011

Utilising a unique data set with annual accounts from around 37,000 Danish non-financial firms spanning one and a half decade or so, we offer microeconometric evidence on bankfirm relationships and the performance of non-financial firms during the financial crisis 2008-09. Two major conclusions...

Persistent link: https://www.econbiz.de/10009301082

Multiple lenders and corporate distress : evidence on debt restructuring

Brunner, Antje; Krahnen, Jan Pieter - 2006 - This version: June 2006

In the recent theoretical literature on lending risk, the coordination problem in multi-creditor relationships have been analyzed extensively. We address this topic empirically, relying on a unique panel data set that includes detailed credit-file information on distressed lending relationships...

Persistent link: https://www.econbiz.de/10009767665

Creditor passivity : the effects of bank competition and institutions on the strategic use of bankruptcy filings

Hainz, Christa - 2007

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information about a firm's type to its competitors. Thereby,...

Persistent link: https://www.econbiz.de/10003951440

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