Shareholder bargaining power and the emergence of empty creditors

• 成果类型: Article
• 署名作者: Colonnello, Stefano; Efing, Matthias; Zucchi, Francesca
• 署名单位: Otto von Guericke University; Leibniz Association; Leibniz Institut fur Wirtschaftsforschung Halle (IWH); Hautes Etudes Commerciales (HEC) Paris; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.04.001
• 发表日期: 2019
• 页码: 297-317
• 关键词: Empty creditors; Credit Default Swaps; Bargaining power; Real effects of financial markets

摘要

Credit default swaps (CDSs) can create empty creditors who potentially force borrowers into inefficient bankruptcy but also reduce shareholders' incentives to default strategically. We show theoretically and empirically that the presence and the effects of empty creditors on firm outcomes depend on the distribution of bargaining power among claimholders. If creditors would face powerful shareholders in debt renegotiation, firms are more likely to face the empty creditor problem. The empirical evidence confirms that more CDS insurance is written on firms with strong shareholders and that CDSs increase the bankruptcy risk of these same firms. The ensuing effect on firm value is negative. (C) 2019 Published by Elsevier B.V.