Please use this identifier to cite or link to this item:
http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19625| Title: | A "wreckers theory" of financial distress |
| Keywords: | G12 G14 G33 G34 ddc:330 stock market anomalies default risk private benefits moral hazard limited liability Krisenmanagement Zahlungsunfähigkeit Börsenkurs Kapitalertrag Kreditrisiko Moral Hazard Theorie |
| Issue Date: | 16-Oct-2013 |
| Description: | In recent years, a number of papers have established a new empirical regularity. Stocks of distressed firms vastly underperform those of financially healthy firms. It is not necessary to attribute the negative excess returns of distressed firms to inefficient or irrational markets. We show that negative excess returns are the equilibrium outcome when a subset of participants is able to draw returns "in kind" from distressed companies. For firms close to bankruptcy, non-cash returns to ownership will be the dominant form of return to equity. If markets expect a contest for control, these returns will show up in stock valuation. The governance problem described here creates a link between the financial position of a firm and real allocation that may amplify macroeconomic real or financial shocks. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19625 |
| Other Identifiers: | http://hdl.handle.net/10419/19625 ppn:504774662 RePEc:zbw:bubdp1:4234 |
| Appears in Collections: | EconStor |
Files in This Item:
There are no files associated with this item.
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.