Corporate Bankruptcies, Liquidation Costs and the Role of Banks
This paper develops a reputation model to discuss the role of banks in the corporate bankruptcy process. Financially distressed firms either default on their current obligations or liquidate themselves voluntarily. Banks, who interact repeatedly in the debt market, either reduce the obligations of troubled firms or pursue liquidation. The strategy of banks is determined by a trade-off between acquiring a reputation for being tough against financially distressed firms (but incurring liquidation costs) and reducing firms' obligations so as to increase the proportion of repayment (but weakening the position against future defaults). The model shows that small firms are more likely to be liquidated when they are in financial distress than larger firms. Copyright 1996 by Blackwell Publishers Ltd and The Victoria University of Manchester
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 64 (1996)
Issue (Month): 0 (Suppl.)
|Contact details of provider:|| Postal: |
Phone: (0)161 275 4868
Fax: (0)161 275 4812
Web page: http://www.socialsciences.manchester.ac.uk/disciplines/economics/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:bla:manch2:v:64:y:1996:i:0:p:104-19. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.