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Costly External Finance, Liquidity Risk, and Default Risk

Yang, Jun - 2011

I use the 2007-2008 financial crisis to gauge how internal financial resources and external financial constraints mitigate or worsen the impact of the crisis on default risk of US industrial firms. I identify heterogeneity in short-term funding needs at the onset of the crisis by exploiting...

Persistent link: https://www.econbiz.de/10013128496

Predicting financial distress through ownership pattern : dynamics of financial resilience of Bangladesh

Alam, Shafiqul; Das, Sumon Kumar; Dipa, Umma Rumman; … - In: Future Business Journal 10 (2024) 1, pp. 1-19

In light of agency and resource dependence theories, we explored the impact of ownership patterns on the likelihood of financial distress using 57 financial institutions (FIs) listed in Dhaka Stock Exchange and 390 firm years from 2016 to 2022. This study observed that 97.94% of the firms are in...

Persistent link: https://www.econbiz.de/10015410712

Liquidity, Systemic Risk, and the Bankruptcy Treatment of Financial Contracts

Mokal, Riz - 2016

Persistent link: https://www.econbiz.de/10013002918

Endogenous Debt Maturity : Liquidity Risk vs. Default Risk

Manuelli, Rodolfo E. - 2019

projects with positive but small net present value, firms may be forced to default in the first phase. We call this liquidity …

Persistent link: https://www.econbiz.de/10012897314

Creditor Rights, Threat of Liquidation, and Labor-Capital Choice of Firms

Alok, Shashwat - 2020

In 2002, a legal reform introduced in India allowed secured creditors to seize and liquidate the defaulter's assets. We study firms' choice between capital and labor in response to these strengthened creditor rights by exploiting variation in their pre-policy proportion of collateralizable...

Persistent link: https://www.econbiz.de/10012850410

Liquidity, Distress Risk and Asset Pricing Implications

Zou, Qiqi - 2016

measure that captures company distress levels more accurately. It is found that liquidity, proxied by a trading noise …-to-default measures. When our new liability and liquidity adjusted measure is used, a clearer picture of distress premium emerges. Our …

Persistent link: https://www.econbiz.de/10012990993

Credit Default Swaps, Exacting Creditors and Corporate Liquidity Management

Subrahmanyam, Marti G. - 2017

We investigate the liquidity management of firms following the inception of credit default swaps (CDS) markets on their … pronounced for CDS firms that do not pay dividends and have a higher marginal value of liquidity. For CDS firms with higher cash … view that CDS-referenced firms adopt more conservative liquidity policies to avoid negotiations with more exacting …

Persistent link: https://www.econbiz.de/10012965176

Stochastic Mortality, Macroeconomic Risks, and Life Insurer Solvency

Hanewald, Katja - 2019

Motivated by a recent demographic study establishing a link between macroeconomic fluctuations and the mortality index kt in the Lee-Carter model, we develop a dynamic asset-liability model to assess the impact of macroeconomic fluctuations on the solvency of a life insurance company....

Persistent link: https://www.econbiz.de/10012906039

The Economic Costs of Financial Distress

Custodio, Claudia; Ferreira, Miguel A.; … - 2022

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...

Persistent link: https://www.econbiz.de/10013492242

Can Creditors Restrict Managerial Investment Behavior in Distressed Firms?

Pryshchepa, Oksana - 2012

Shareholders in distressed firms should profit from shifting to more risky assets, but there is little empirical evidence documenting such behavior. We find that this weak evidence is consistent with creditors being somewhat able to control the investment policies of distressed firms if distress...

Persistent link: https://www.econbiz.de/10013101646