• DOI:10.1111/J.1540-6261.1994.TB00086.X
Corpus ID: 154392137

Financial Distress and Corporate Performance

@article{Opler1994FinancialDA,
  title={Financial Distress and Corporate Performance},
  author={T. Opler and S. Titman},
  journal={Journal of Finance},
  year={1994},
  volume={49},
  pages={1015-1040}
}

• T. Opler, S. Titman
• Published 1994
• Economics
• Journal of Finance

This study finds that highly leveraged firms lose substantial market share to their more conservatively financed competitors in industry downturns. Specifically, firms in the top leverage decile in industries that experience output contractions see their sales decline by 26 percent more than do firms in the bottom leverage decile. A similar decline takes place in the market value of equity. These findings are consistent with the view that the indirect costs of financial distress are significant… Expand

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