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| Author: | Akhigbe, A. Madura, J. |
| Title: | Intra-industry effects of voluntary corporate liquidations |
| Journal: | Journal of Business Finance and Accounting
1996 : SEP, VOL. 23:7, p. 915-930 |
| Index terms: | INTRA-INDUSTRY TRADE COMPETITION LIQUIDATION |
| Language: | eng |
| Abstract: | Asymmetric information about firms in an industry may be disclosed as a result of corporate liquidations. Using the theory of Lang and Stulz (1992) on corporate liquidations may signal contagion effects throughout the industry. A counter-argument is that liquidations enhance the competitive position of rivals within the industry. Our analysis finds negative valuation effects for rival portfolios in aggregate, which suggests that signals of adverse industry conditions dominate perceived changes in competitive positions. By partitioning the sample according to unique characteristics of liquidating firm or corresponding industry, we find that the intra-industry effects vary among industries. |
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