Firms under Judicial Protection: A Profitable Investment?

Xavier Brédart ()

Research in World Economy, 2014, vol. 5, issue 2, 14-22

Abstract: The objective of this article is to observe stock prices of firms around their filing for liquidation or reorganization procedure. Through a methodology developed for this purpose, we compare the stock returns of these firms with that of ¡°similar¡± companies but not affected by this type of event. The results report higher average market profitability for firms under protection of the American bankruptcy code for a holding period of between 1 and 5 months after the announcement date.

Keywords: bankruptcy; Chapter 7; Chapter 11; price index (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:rwe111:v:5:y:2014:i:2:p:14-22

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