This paper analyzes whether the financial distress of a firm affects the investment decisions of non-distressed competitors. On average, firms in distress impose indirect costs to non-distressed competitors by increasing costs of credit in the industry and hence restricting credit access and...

We estimate the economic costs of financial distress due to lost sales, 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...

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...