Meier, J-M and Servaes, H (2019) The Bright Side of Fire Sales. Review of Financial Studies, 32 (11). pp. 4228-4270. ISSN 0893-9454
Abstract
Firms that buy assets in fire sales earn excess returns that are two percentage points higher than in regular acquisitions. The mechanism behind this result is the reduced bargaining power of the seller. We find no difference in real effects or in the combined returns for buyers and sellers between fire sales and regular acquisitions, suggesting that the quality of the match is similar in both types of transactions. The externalities of fire sales for other stakeholders are limited. These results indicate that the welfare losses associated with fire sales are smaller than previously thought.
More Details
Item Type: | Article |
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Subject Areas: | Finance |
Additional Information: |
© 2019 Oxford University Press and Society for Financial Studies.
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Date Deposited: | 15 Feb 2019 19:23 |
Date of first compliant deposit: | 15 Feb 2019 |
Subjects: |
Capital markets Financial risk |
Last Modified: | 05 Nov 2024 02:32 |
URI: | https://lbsresearch.london.edu/id/eprint/1049 |