000			01491nam a22001817a 4500
008			190323b xxu||||| |||| 00| 0 eng d
022			_a0304-405X
245			_aSpillovers from good-news and other bankruptcies: Real effects and price responses / by Nina Baranchuk & Michael J. Rebello _cNina Baranchuk & Michael J. Rebello
260			_aAmsterdam _bElsevier _cAugust 2018
300			_aPages 228-249
440			_aJournal of Financial Economics _v129 (2) _x0304-405X
500			_aAbstract We model debt restructurings that could endogenously end in bankruptcy, and study spillovers to competitors’ operating decisions, profits, restructuring outcomes and security prices. We show that while bankruptcy could cause the firm’s share price to drop, bankruptcy always signals good news about the firm. We identify the conditions under which a bankruptcy also signals good news about competitors. We demonstrate that when a firm’s bankruptcy costs are relatively small, bankruptcy raises its share price while lowering the prices of competitors’ shares and debt as well as boosting the probability that they will enter bankruptcy. When there is little information asymmetry about the firm’s prospects, or the information asymmetry is about industry prospects, bankruptcy raises competitors’ share and debt prices and lowers their probability of bankruptcy.
690			_aRestructuring
690			_aDistress
690			_aSpillover
690			_aFeedback
942			_2lcc _cSE
999			_c361360 _d361360