Shareholder bargaining power and the emergence of empty creditors : fifth draft / Stefano Colonnello, Matthias Efing, Francesca Zucchi
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Discovery
1023111586
URN
urn:nbn:de:gbv:3:2-92319
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, May 17, 2018
Umfang
1 Online-Ressource (III, 67 Seiten, 1,47 MB) : Diagramme
Ausgabevermerk
This draft: May 17, 2018
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
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. Firms are more likely to have empty creditors if these would face powerful shareholders in debt renegotiation. 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.
Schriftenreihe
IWH-Diskussionspapiere ; 2016, no. 10 (June 2016) [rev.] ppn:837399270