Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 16, 2022 erstellt
Description:
This paper examines the intra-industry effects of bond defaults on corporate cash holdings. The staggered difference-in-differences regression results find that corporate cash holdings decrease following the first default within each industry, and the results are driven by firms with more severe financial constraints. Moreover, industry peers’ defaults significantly improve external monitoring, leading to a drop in the firm’s excess cash holdings and an increase in cash value. Our results support that the market-wide credit events may alleviate agency problems but also exacerbate the financial constraints of firms in poor financial conditions