Inter-Firm Linkages and the Wealth Effects of Financial Distress Along the Supply Chain

  title={Inter-Firm Linkages and the Wealth Effects of Financial Distress Along the Supply Chain},
  author={M. Hertzel and Z. Li and M. S. Officer and K. Rodgers},
  journal={Journal of Financial Economics},
  • M. Hertzel, Z. Li, +1 author K. Rodgers
  • Published 2008
  • Economics
  • Journal of Financial Economics
  • Extant research examines the extent to which bankruptcy has intra-industry valuation consequences. This study broadens the investigation by examining the wealth effects of distress and bankruptcy filing for suppliers and customers of filing firms. On average, important wealth effects occur prior to and at bankruptcy filings and extend beyond industry competitors along the supply chain. Specifically, distress related to bankruptcy filings is associated with negative and significant stock price… CONTINUE READING
    413 Citations

    Tables from this paper

    Supply Chain Concentration and Cost of Capital
    • Highly Influenced


    Contagion and competitive intra-industry effects of bankruptcy announcements
    • 769
    • Highly Influential
    • PDF
    Financial Distress and Corporate Performance
    • 1,325
    The wealth effect of merger activity and the objective functions of merging firms
    • 541
    An analysis of contagion and competitive effects at commercial banks
    • 163
    Sources of Gains in Horizontal Mergers: Evidence from Customer, Supplier, and Rival Firms
    • 497
    • PDF
    The determinants of leveraged buyout activity : Free cash flow vs. financial distress costs
    • 454
    The effect of capital structure on a firm's liquidation decision☆
    • 1,310
    • PDF
    Do Banking Shocks Affect Borrowing Firm Performance? An Analysis of the Japanese Experience
    • 319