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Authors
Advisor(s)
Abstract(s)
Based on a consideration of the whole process from reorganization filing to confirmation, this paper examines the impact of corporate reorganiza- tion on both filing firms and industry rivals, and how it changes the competitive landscape of the industry. Results show that there exist intra-industry informa- tion transfers throughout the whole course of the reorganization proceedings that result in an incessant downward revaluation of the rival firms’ values. Specifically, the market reassesses the prospects of not only the filer but also of its industry rivals simultaneously. Results also show that whether a rival firm has a contagious or a competitive reaction is largely decided by firm-specific rather than industry-specific characteristics.
Description
Keywords
Corporate valuation Corporate reorganization Reorganization filing to confirmation Contagion effect Competitive effect
Pedagogical Context
Citation
Tseng-Chung, Tang (2010). "The information content of reorganization procedures : contagion or competitive effects?". Portuguese Economic Journal, 9(2):141-161
Publisher
Springer Verlag