Badly Hurt? Natural Disasters and Direct Firm Effects
Finance Research Letters,
We investigate firm outcomes after a major flood in Germany in 2013. We robustly find that firms located in the disaster regions have significantly higher turnover, lower leverage, and higher cash in the period after 2013. We provide evidence that the effects stem from firms that already experienced a similar major disaster in 2002. Overall, our results document a positive net effect on firm performance in the direct aftermath of a natural disaster.
Shareholder Bargaining Power and the Emergence of Empty Creditors
Journal of Financial Economics,
Credit default swaps (CDSs) can create empty creditors who potentially force borrowers into inefficient bankruptcy but also reduce shareholders’ incentives to default strategically. We show theoretically and empirically that the presence and the effects of empty creditors on firm outcomes depend on the distribution of bargaining power among claimholders. If creditors would face powerful shareholders in debt renegotiation, firms are more likely to face the empty creditor problem. The empirical evidence confirms that more CDS insurance is written on firms with strong shareholders and that CDSs increase the bankruptcy risk of these same firms. The ensuing effect on firm value is negative.
Four Research Clusters ...
Members & Research Doctoral Students Annika Backes ; Doctoral thesis project: tba Dmitri Bershadskyy ; Doctoral thesis project: "Experimental Analysis...
IWH Bankruptcy Research
IWH Bankrupcty Research The Bankrupcty Research Unit of the Halle Institute for...
Wage and Employment Effects of Insolvencies
Wage and employment effects of bankruptcies Although the consequences of...
Centre for Evidence-based Policy Advice
Centre for Evidence-based Policy Advice (IWH-CEP) ...
Does Extended Unemployment Benefit Duration Ameliorate the Negative Employment Effects of Job Loss? ...