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Heightened shareholder interest in firm affairs following the inception of credit default swap trade
Hong, Hyun A.; Ryou, Ji Woo; Srivastava, Anup - 2018
The literature shows that a lender becomes reluctant to aid a distressed client after it receives insurance on its outstanding debt via a credit default swap (CDS). The onset of CDS trade thus accelerates client bankruptcy. We predict that the client firm's shareholders would respond by...
Persistent link: https://www.econbiz.de/10011847772
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Determinants of acquisition and failure : stylized facts and lessons for empirical studies
Köke, F. Jens - 2001
This study provides new stylized facts on the determinants of corporate failure and acquisition in Germany. It also offers important lessons for the design of empirical studies. We show that firms experiencing failure or acquisition are significantly different from surviving firms on a number of...
Persistent link: https://www.econbiz.de/10011446202
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Default Risk in Corporate Yield Spreads
Dionne, Georges - 2010
An important research question examined in the credit risk literature focuses on the proportion of corporate yield spreads attributed to default risk. This topic is reexamined in the light of the different issues associated with the computation of transition and default probabilities obtained...
Persistent link: https://www.econbiz.de/10012717692
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Large Shareholders and Financial Distress
Opp, Christian C. - 2019
I examine large shareholders' externalities on other claim holders when firms are financially distressed. To this end, I develop a tractable dynamic model of the interplay between these blockholders and regular equity holders. Blockholders' information acquisition and investment decisions play a...
Persistent link: https://www.econbiz.de/10012891364
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The Performance of Acquisitions by High Default Risk Bidders
Bruyland, Evy - 2019
We investigate the takeover strategies of high default risk acquirers and their value impact. We find that these bidders select bigger, less profitable and unrelated targets, pursue transactions during recessions, and pay with shares by offering target shareholders high premiums. Their long-term...
Persistent link: https://www.econbiz.de/10012894337
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Corporate Governance and Financial Distress : A Discrete Time Hazard Prediction Model
Li, Zhiyong - 2015
Poor corporate governance can damage the interests of shareholders, and may lead to company collapse. Previous studies in credit risk prediction provide no consensus as to which and how corporate governance variables determine bankruptcy. This paper is the first to apply a discrete time hazard...
Persistent link: https://www.econbiz.de/10013018775
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Forecasting Corporate Defaults in the German Stock Market
Mertens, Richard - 2016
We estimate and test several default risk models using new and unique data on corporate defaults in the German stock market. While defaults were extremely rare events in the 1990s, they have been a characteristic feature of the German stock market since the early 2000s. We apply the structural...
Persistent link: https://www.econbiz.de/10012983935
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Chapter 6. Law and Finance After a Decade of Research
La Porta, Rafael; Lopez-de-Silanes, Florencio; … - 2013
In the last dozen years, economists have produced a considerable body of research suggesting that the historical origin of a country’s laws is highly correlated with a broad range of its legal rules and regulations, as well as with economic outcomes. Much of this research has dealt with rules...
Persistent link: https://www.econbiz.de/10014025558
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Ownership Structure, Revenue Diversification and Insolvency Risk in European Banks
Sanya, Sarah - 2011
, an insight into how the ownership structure of a bank affects investment decisions, performance and ultimately insolvency … risk - the focus of this paper - is crucial. Our results show revenue diversification reduces insolvency risk in banks with … the impact of the latter on insolvency risk in banks. The results also have important policy implications for regulators …
Persistent link: https://www.econbiz.de/10013128385
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An econometric analysis of financial distress determinants from an emerging economy governance perspective
Sewpersadh, Navitha Singh - In: Cogent economics & finance 10 (2022) 1, pp. 1-36
During times of distress, companies are compelled to reassess operational policies and reengineer strategic formulations to discern value maximising uses for limited resources. The executive’s agility to react to financial distress determines the probability of bankruptcy. Proper governance...
Persistent link: https://www.econbiz.de/10013463130