Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5084073 | International Review of Economics & Finance | 2009 | 15 Pages |
Abstract
The paper shows that, in equilibrium, the aggregate debts of the firm are reduced enough to provide a positive expected residual return to the owner-managers, which improves their incentives to efficiently operate the firm and can result in an outcome that is Pareto superior to other bankruptcy procedures. We discuss the efficiency properties of this scheme and its appropriateness to situations of systemic financial distress.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Donald B. Hausch, S. Ramachandran,