| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w6145 |
| 来源ID | Working Paper 6145 |
| How Costly is Financial (not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed | |
| Gregor Andrade; Steven N. Kaplan | |
| 发表日期 | 1997-08-01 |
| 出版年 | 1997 |
| 语种 | 英语 |
| 摘要 | This paper studies thirty-one highly leveraged transactions (HLTs) of the 1980s that subsequently became financially distressed. At the time of distress, all sample firms have operating margins that are positive and in the majority of cases greater than the median for the industry. Therefore, we consider these firms financially distressed, not economically distressed. The net effect of the HLT and financial distress is a slight increase in value -- from pre-transaction to distress resolution, the sample firms experience a marginally positive change in (market- or industry-adjusted) value. This finding strongly suggests that, overall, the HLTs of the late 1980s succeeded in creating value. We also present quantitative and qualitative estimates of the (direct and indirect)costs of financial distress and their determinants. Our preferred estimates of the costs of financial distress are 10% of firm value. Our most conservative estimates do not exceed 23% of firm value. Operating margins of the distressed firms increase immediately after the HLT, decline when the firms become distressed and while they are distressed, but then rebound after the distress is resolved. Consistent with some costs of financial distress, we find evidence of unexpected cuts in capital expenditures, undesired asset sales, and costly managerial delay in restructuring. To the extent they occur, the costs of financial distress that we identify are heavily concentrated in the period after the firms become distressed, but before they enter Chapter 11. |
| URL | https://www.nber.org/papers/w6145 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/563654 |
| 推荐引用方式 GB/T 7714 | Gregor Andrade,Steven N. Kaplan. How Costly is Financial (not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed. 1997. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w6145.pdf（835KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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