The Agglomeration of Bankruptcy

• 成果类型: Article
• 署名作者: Benmelech, Efraim; Bergman, Nittai; Milanez, Anna; Mukharlyamov, Vladimir
• 署名单位: Northwestern University; National Bureau of Economic Research; Tel Aviv University; Organisation for Economic Co-operation & Development (OECD); Georgetown University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy114
• 发表日期: 2019
• 页码: 2541
• 关键词: contagion; externalities; industry

摘要

This paper identifies a new channel through which bankrupt firms undergoing liquidation impose negative externalities on their nonbankrupt peers. The liquidation of a retail chain weakens the economies of agglomeration in any given local area, reducing the attractiveness of retail centers for remaining stores and leading to contagion of financial distress. We find that firms with greater geographic exposure to bankrupt retailers are more likely to close stores in affected areas. We further show that the effect of these externalities on nonbankrupt peers is higher when affected stores are smaller and are operated by firms in financial distress.