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Insolvency regimes, technology diffusion and productivity growth : evidence from firms in OECD countries

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

This paper explores the link between the design of insolvency regimes across countries and laggard firms’ multi …-factor productivity (MFP) growth, using new OECD indicators of the design of insolvency regimes. Firm-level analysis shows that reforms to … insolvency regimes that lower barriers to corporate restructuring are associated with higher MFP growth of laggard firms. These …

Persistent link: https://www.econbiz.de/10011823606

Optimal capital structure and bankruptcy choice : dynamic bargaining vs liquidation

Antill, Samuel; Grenadier, Steven R. - 2018

We model a firm's optimal capital structure decision in a framework in which it may later choose to enter either Chapter 11 reorganization or Chapter 7 liquidation. Creditors anticipate equityholders' ex-post reorganization incentives and price them into the ex-ante credit spreads. Using a...

Persistent link: https://www.econbiz.de/10011873038

Pre-emptive sovereign debt restructuring and holdout litigation

Anand, Kartik; Gai, Prasanna - 2018

We offer an analytical framework for studying "pre-emptive" debt exchanges. Countries can tailor a sovereign bankruptcy framework by choosing provisions (or "haircuts") ex ante, but must contend with the market discipline of holdout litigation ex post. Secondary markets play a role in shaping...

Persistent link: https://www.econbiz.de/10011874276

Pricing default risk : the good, the bad, and the anomaly

Ferreira Filipe, Sara; Grammatikos, Theoharry; Michala, … - 2014

While empirical literature has documented a negative relation between default risk and stock returns, the theory suggests that default risk should be positively priced. We provide an explanation for this "default anomaly", by calculating monthly probabilities of default (PDs) for a large sample...

Persistent link: https://www.econbiz.de/10011861135

Group affiliation and default prediction

Beaver, William H.; Cascino, Stefano; Correia, Maria; … - 2018

Using a large sample of business groups from more than one hundred countries around the world, we show that group information matters for parent and subsidiary default prediction. Group firms may support each other when in financial distress. Potential group support represents an off-balance...

Persistent link: https://www.econbiz.de/10011864989

Strategic default in financial networks

Allouch, Nizar; Jalloul, Maya - 2018

This paper investigates a model of strategic interactions in financial networks, where the decision by one agent on whether or not to default impacts the incentives of other agents to escape default. Agents' payoffs are determined by the clearing mechanism introduced in the seminal contribution...

Persistent link: https://www.econbiz.de/10011812108

The use of insolvency law based re-organisation proceedings by small and medium-sized enterprises

Kranzusch, Peter; Icks, Annette - 2018

Sanierungswege, z. B. das eigenverwaltete Schutzschirmverfahren vor der Insolvenz und die Eigenverwaltung während des …With the introduction of the ESUG law, German insolvency legislation was reformed in 2012. It offers new proceedings … for enterprise re-organisation, both before insolvency and between the application for insolvency and the start of the …

Persistent link: https://www.econbiz.de/10011813213

Can machine learning models capture correlations in corporate distresses?

Christoffersen, Benjamin; Matin, Rastin; Mølgaard, Pia - 2018

Accurate probability-of-distress models are central to regulators, firms, and individuals who need to evaluate the default risk of a loan portfolio. A number of papers document that recent machine learning models outperform traditional corporate distress models in terms of accurately ranking...

Persistent link: https://www.econbiz.de/10011919300

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

Financial frictions, real estate collateral, and small firm activity in Europe

Banerjee, Ryan; Blickle, Kristian - 2018

We observe significant heterogeneity in the correlation between changes in house prices and the growth of small firms across certain countries in Europe. We find that, overall, the correlation is far greater in Southern Europe than in Northern Europe. Using a simple model, we show that this...

Persistent link: https://www.econbiz.de/10011904686