Firms under Judicial Protection: A Profitable Investment?

Xavier Bredart

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.

Full Text: PDF DOI: 10.5430/rwe.v5n2p14

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

Research in World Economy
ISSN 1923-3981(Print) ISSN 1923-399X(Online)

 

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