Bankruptcy as a planned business strategy? Evidence from the stock market

IF 3.1 Q2 MANAGEMENT
Luís Miguel Serra Coelho
{"title":"Bankruptcy as a planned business strategy? Evidence from the stock market","authors":"Luís Miguel Serra Coelho","doi":"10.1108/mrr-11-2022-0771","DOIUrl":null,"url":null,"abstract":"<h3>Purpose</h3>\n<p>This paper aims to investigate how the US stock market deals with the announcement of a strategic Chapter 11, a special type of corporate bankruptcy in which companies seek the protection of the law not as a last resort but as a planned business decision.</p><!--/ Abstract__block -->\n<h3>Design/methodology/approach</h3>\n<p>An event study is conducted by using data concerning a group of US publicly traded companies that entered Chapter 11 for both strategic and nonstrategic reasons. Regression analysis is also used for robustness purposes.</p><!--/ Abstract__block -->\n<h3>Findings</h3>\n<p>This study reveals that initiating both strategic and nonstrategic Chapter 11 proceedings results in negative and statistically significant abnormal stock returns before and at the bankruptcy announcement date. However, in the period following the filing, the market gradually views strategic bankruptcy cases as positive news, whereas nonstrategic Chapter 11 filings continue to be perceived as distinctly negative.</p><!--/ Abstract__block -->\n<h3>Originality/value</h3>\n<p>To the best of the author’s knowledge, this is the first paper that documents an asymmetric market reaction to the announcement of Chapter 11, suggesting that, in certain circumstances, managers can add value by filing a strategic bankruptcy.</p><!--/ Abstract__block -->","PeriodicalId":47769,"journal":{"name":"Management Research Review","volume":"63 1","pages":""},"PeriodicalIF":3.1000,"publicationDate":"2024-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Management Research Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/mrr-11-2022-0771","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0

Abstract

Purpose

This paper aims to investigate how the US stock market deals with the announcement of a strategic Chapter 11, a special type of corporate bankruptcy in which companies seek the protection of the law not as a last resort but as a planned business decision.

Design/methodology/approach

An event study is conducted by using data concerning a group of US publicly traded companies that entered Chapter 11 for both strategic and nonstrategic reasons. Regression analysis is also used for robustness purposes.

Findings

This study reveals that initiating both strategic and nonstrategic Chapter 11 proceedings results in negative and statistically significant abnormal stock returns before and at the bankruptcy announcement date. However, in the period following the filing, the market gradually views strategic bankruptcy cases as positive news, whereas nonstrategic Chapter 11 filings continue to be perceived as distinctly negative.

Originality/value

To the best of the author’s knowledge, this is the first paper that documents an asymmetric market reaction to the announcement of Chapter 11, suggesting that, in certain circumstances, managers can add value by filing a strategic bankruptcy.

破产是一种有计划的商业策略?来自股票市场的证据
本文旨在研究美国股市如何应对战略破产保护的宣布,战略破产保护是一种特殊类型的公司破产,公司寻求法律保护并非不得已而为之,而是一项有计划的商业决策。设计/方法/方法本文使用一组因战略和非战略原因而进入破产保护程序的美国上市公司的数据进行了一项事件研究。研究结果本研究揭示,战略性和非战略性破产保护程序的启动会导致在破产宣布日之前和破产宣布日的股票回报率出现负值,且在统计上有显著的异常。原创性/价值 据作者所知,这是第一篇记录市场对宣布破产保护的非对称反应的论文,表明在某些情况下,管理者可以通过申请战略性破产来增加价值。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
CiteScore
6.00
自引率
7.70%
发文量
71
期刊介绍: Management Research Review publishes a wide variety of articles outlining the latest management research. We emphasize management implication from multiple disciplines. We welcome high quality empirical and theoretical studies, literature reviews, and articles with important tactical implications. Published 12 times a year, the journal prides itself on quick publication of the very latest research in general management. The key issues featured include: Business Ethics and Sustainability Corporate Finance Entrepreneurship and Small Business Management Industrial Relations Information and Knowledge Management International Business Human Resource Management Organizational Theory and Behaviour Production and Operations Management Strategic Management and Leadership
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信