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Strategic bankruptcy: A stakeholder management perspective

Listed author(s):
  • James, Sharon D.
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    There has been growing interest in whether and when a Chapter 11 bankruptcy can be a mechanism through which firms make strategic changes that help to preserve value and overcome competitive disadvantages. Using a stakeholder management perspective, this paper examines the influence of firm characteristics on the likelihood of filing for Chapter 11, subsequently emerging from bankruptcy, and the number of years in bankruptcy. Theoretical predictions are tested in a study of publicly traded firms from 1980–99. Intangible assets and assets that can be efficiently sold in bankruptcy positively influence the likelihood that a firm will file for Chapter 11 and reorganize in a shorter number of years. Further, unfavorable executory contracts with primary stakeholders, a previously unexplored area, positively influence a firm's likelihood of both filing and reorganizing in bankruptcy. These findings are consistent with a stakeholder view of strategic bankruptcy.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0148296315002064
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    Article provided by Elsevier in its journal Journal of Business Research.

    Volume (Year): 69 (2016)
    Issue (Month): 2 ()
    Pages: 492-499

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    Handle: RePEc:eee:jbrese:v:69:y:2016:i:2:p:492-499
    DOI: 10.1016/j.jbusres.2015.05.006
    Contact details of provider: Web page: http://www.elsevier.com/locate/jbusres

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