Strategic bankruptcy: A stakeholder management perspective
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.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
- Preston, Lee E. & Sapienza, Harry J., 1990. "Stakeholder management and corporate performance," Journal of Behavioral Economics, Elsevier, vol. 19(4), pages 361-375.
- Barker, Vincent III & Barr, Pamela S., 2002. "Linking top manager attributions to strategic reorientation in declining firms attempting turnarounds," Journal of Business Research, Elsevier, vol. 55(12), pages 963-979, December.
- Becchetti, Leonardo & Ciciretti, Rocco & Hasan, Iftekhar & Kobeissi, Nada, 2012. "Corporate social responsibility and shareholder's value," Journal of Business Research, Elsevier, vol. 65(11), pages 1628-1635.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Espen Eckbo, B. & Thorburn, S. Karin, 2008. "Automatic bankruptcy auctions and fire-sales," Journal of Financial Economics, Elsevier, vol. 89(3), pages 404-422, September.
- Paul Asquith & Robert Gertner & David Scharfstein, 1994. "Anatomy of Financial Distress: An Examination of Junk-Bond Issuers," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 625-658.
- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
- Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
- Freeman, R. Edward, 1994. "The Politics of Stakeholder Theory: Some Future Directions," Business Ethics Quarterly, Cambridge University Press, vol. 4(04), pages 409-421, October.
- John, Kose & Ofek, Eli, 1995. "Asset sales and increase in focus," Journal of Financial Economics, Elsevier, vol. 37(1), pages 105-126, January.
- Evans, Jocelyn & Borders, Aberdeen Leila, 2014. "Strategically Surviving Bankruptcy during a Global Financial Crisis: The Importance of Understanding Chapter 15," Journal of Business Research, Elsevier, vol. 67(1), pages 2738-2742.
- Richard A. D'Aveni, 1989. "Dependability and Organizational Bankruptcy: An Application of Agency and Prospect Theory," Management Science, INFORMS, vol. 35(9), pages 1120-1138, September.
- Branch, Ben, 2002. "The costs of bankruptcy: A review," International Review of Financial Analysis, Elsevier, vol. 11(1), pages 39-57.
- S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
- Thorburn, Karin S., 2000. "Bankruptcy auctions: costs, debt recovery, and firm survival," Journal of Financial Economics, Elsevier, vol. 58(3), pages 337-368, December.
When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:69:y:2016:i:2:p:492-499. 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: (Dana Niculescu)
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.