Empirical Evidence of Risk Shifting in Financially Distressed Firms

By Assaf Eisdorfer. 2008

345 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/8a1b665c6a3a5aa721a535f2ef16638aafd240d7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Finance

Citations in the corpus

A Market-Based Study of the Cost of Default (2012, result): “Nonetheless, we also find that marginal and ex ante expected risk-adjusted default costs remain small in comparison with the likely tax benefits of debt, consistent with Graham (2000), Elkamhi et al. (2011), and other studies based on AK’s averages.”
Capital structure, executive compensation, and investment efficiency (2013, background): “(2004), Richardson (2006), and Eisdorfer (2011). 4 Most studies measure firm-specific investment intensity by capital expenditures”
The effects of financial reporting and disclosure on corporate investment: A review (2019, background): “34 Jensen and Meckling (1976) and Eisdorfer (2008), among others, argue that shareholders and debtholders have conflicting appetites for risk-taking when a firm is close to financial distress, leading to agency issues such as asset substitution. Some studies have investigated whether financial repor”
Accounting Discretion, Loan Loss Provisioning and Discipline of Banks' Risk-Taking (2012, neutral): “, Eisdorfer (2008), Loktionov (2009)), implying that the effects documented in Table 5”
Corporate Financial and Investment Policies when Future Financing is Not Frictionless (2011, neutral): “See Ferreira and Vilela (2004) for Continental Europe; Nguyen (2005) for Japan; Chang et al.”
Do Firms Engage in Risk-Shifting? Empirical Evidence (2016, background): “Alternatively, Eisdorfer (2008) studies risk-shifting within the context of a real options framework, and finds that, consistent with risk-shifting theory, volatility increases investment by distressed firms.5 However, to my knowledge, my study is the first to use exogenous variation in leverage…”
The Limits of Limited Liability: Evidence from Industrial Pollution (2020, result): “Evidence consistent with the risk-shifting hypothesis has been documented in a variety of settings including banking (Esty, 1997; Landier et al., 2015), venture capital (Denes, 2016), and investments by distressed firms (Eisdorfer, 2008).”
Policy uncertainty, investment, and the cost of capital (2018, neutral): “…uncertainty and corporate investment, see Pindyck and Solimano (1993), Leahy and Whited (1996), Guiso and Parigi (1999), Bond and Cummins (2004), Eisdorfer (2008), and Badertscher et al. (2013). rates will be less effective.4 This sensitivity effect dampens the productivity-enhancing…”