Industry contagion in loan spreads

@article{Hertzel2012IndustryCI,
  title={Industry contagion in loan spreads},
  author={M. Hertzel and M. S. Officer},
  journal={Journal of Financial Economics},
  year={2012},
  volume={103},
  pages={493-506}
}
  • M. Hertzel, M. S. Officer
  • Published 2012
  • Business
  • Journal of Financial Economics
  • Spreads on new and renegotiated corporate loans are significantly higher when the loan originates (or is renegotiated) in the two years surrounding bankruptcy filings by industry rivals. This industry-specific contagion is particularly severe in the middle of industry bankruptcy waves. Furthermore, this contagion in loan spreads is mitigated in concentrated industries, consistent with the hypothesis and evidence in Lang and Stulz (1992) that bankruptcy filings in concentrated industries can… CONTINUE READING
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