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A "wreckers theory" of financial distress

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dc.creator von Kalckreuth, Ulf
dc.date 2005
dc.date.accessioned 2013-10-16T07:05:58Z
dc.date.available 2013-10-16T07:05:58Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/19625
dc.identifier ppn:504774662
dc.identifier RePEc:zbw:bubdp1:4234
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/19625
dc.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.
dc.language eng
dc.relation Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2005,40
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject G12
dc.subject G14
dc.subject G33
dc.subject G34
dc.subject ddc:330
dc.subject stock market anomalies
dc.subject default risk
dc.subject private benefits
dc.subject moral hazard
dc.subject limited liability
dc.subject Krisenmanagement
dc.subject Zahlungsunfähigkeit
dc.subject Börsenkurs
dc.subject Kapitalertrag
dc.subject Kreditrisiko
dc.subject Moral Hazard
dc.subject Theorie
dc.title A "wreckers theory" of financial distress
dc.type doc-type:workingPaper

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