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Reassessment of Contagion and Competitive Intra-industry Effects of Bankruptcy Announcements

Paul J. Haensly et al.

Quarterly Journal of Finance and Accounting2016article
ABDC B
Weight
0.50

What the paper says

We investigate the effects of bankruptcy on equity value of the bankrupt firm 's competitors and find that these effects are unclear. Using a sample of bankruptcies with debt over $120 million, Lang and Stulz (1992) find competitive and contagion effects on other firms in the same industry. We replicate their stratification of industry portfolios by concentration and leverage but use a sample of bankruptcy filings from a single legal regime. Our tests do not support their conclusions. Furthermore, use of a debt screen on bankruptcies appears to confound the conclusions, because test significance depends on the debt screen applied.

16 citations

Cite this paper

@article{paul2016,
  title        = {{Reassessment of Contagion and Competitive Intra-industry Effects of Bankruptcy Announcements}},
  author       = {Paul J. Haensly et al.},
  journal      = {Quarterly Journal of Finance and Accounting},
  year         = {2016},
}

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Reassessment of Contagion and Competitive Intra-industry Effects of Bankruptcy Announcements

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.38 × 0.4 = 0.15
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.