The real effects of forced sales of corporate bonds

• 成果类型: Article
• 署名作者: Aslan, Hadiye; Kumar, Praveen
• 署名单位: University System of Georgia; Georgia State University; University of Houston System; University of Houston
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2018.02.004
• 发表日期: 2018
• 页码: 1-17
• 关键词: Forced sales; Corporate bonds; Subprime mortgage crisis; Capital investment; Product markets

摘要

What are the real effects of forced sales of corporate securities? Our theoretical analysis shows that model uncertainty can generate distorted negative (positive) capital investment effects during price declines (reversals) in equilibrium when there is information feedback from financial markets. Empirically, we find that forced sales of corporate bonds by financial institutions had a significant negative impact on the capital investment and product market competitiveness measured by market shares and price-cost margins of exposed firms during the financial crisis. These adverse real effects on exposed firms were also vertically transmitted to their suppliers and customers. (C) 2018 Elsevier B.V. All rights reserved.