Asset Allocation in Bankruptcy

• 成果类型: Article
• 署名作者: Bernstein, Shai; Colonnelli, Emanuele; Iverson, Benjamin
• 署名单位: National Bureau of Economic Research; University of Chicago; Brigham Young University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12740
• 发表日期: 2019
• 页码: 5-53
• 关键词: CHILD PROTECTION; fire sales; auctions; reorganization; reallocation; liquidation; assignment; EMPLOYMENT; outcomes; finance

摘要

This paper investigates the consequences of liquidation and reorganization on the allocation and subsequent utilization of assets in bankruptcy. Using the random assignment of judges to bankruptcy cases as a natural experiment that forces some firms into liquidation, we find that the long-run utilization of assets of liquidated firms is lower relative to assets of reorganized firms. These effects are concentrated in thin markets with few potential users and in areas with low access to finance. These findings suggest that when search frictions are large, liquidation can lead to inefficient allocation of assets in bankruptcy.