Online appendix to Financial distress, stock returns, and the 1978 Bankruptcy Reform Act

  • We study the effect of weakening creditor rights on distress risk premia via a bankruptcy reform that shifts bargaining power in financial distress toward shareholders. We find that the reform reduces risk factor loadings and returns of distressed stocks. The effect is stronger for firms with lower firm-level shareholder bargaining power. An increase in credit spreads of riskier relative to safer firms, in particular for firms with lower firm-level shareholder bargaining power, confirms a shift in bargaining power from bondholders to shareholders. Out-of-sample tests reveal that a reversal of the reform's effects leads to a reversal of factor loadings and returns.

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Metadaten
Author:Dirk Hackbarth, Rainer HaselmannGND, David Schoenherr
URN:urn:nbn:de:hebis:30:3-370877
URL:http://ssrn.com/abstract=2517596
DOI:https://doi.org/10.2139/ssrn.2517596
Document Type:Report
Language:English
Year of Completion:2014
Year of first Publication:2014
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2015/07/27
Tag:financial distress; law and finance; shareholder recovery; stock returns
Issue:October 31, 2014
Page Number:3
Last Page:2
Note:
The paper "Financial Distress, Stock Returns, and the 1978 Bankruptcy Reform Act" to which these Appendices apply is available at the following URL: http://ssrn.com/abstract=1787627
HeBIS-PPN:362914907
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht