Papers Containing Keywords(s): 'liquidation'
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Authors
Nuri Ersahin - 4
Viewing papers 11 through 14 of 14
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Working PaperThe Deaths of Manufacturing Plants
June 2002
Working Paper Number:
CES-02-15
This paper examines the causes of manufacturing plant deaths within and across industries in the U.S. from 1977-1997. The effects of international competition from low wage countries, exporting, ownership structure, product diversity, productivity, geography, and plant characteristics are considered. The probability of shutdowns is higher in industries that face increased competition from lowincome countries, especially for low-wage, labor-intensive plants within those industries. Conditional on industry and plant characteristics, closures occur more often at plants that are part of a multi-plant firm and at plants that have recently experienced a change in ownership. Plants owned by U.S. multinationals are more likely to close than similar plants at non-multinational firms. Exits occur less frequently at multi-product plants, at exporters, at plants that pay above average wages, and at large, older, more productive and more capital-intensive plants.View Full Paper PDF
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Working PaperEfficiency of Bankrupt Firms and Industry Conditions: Theory and Evidence
October 1996
Working Paper Number:
CES-96-12
We show that the incentives to reorganize inefficient firms and redeploy their assets depend on the change in industry output and industry characteristics. We use plant-level data to investigate the productivity of Chapter 11 bankrupt firms and asset-sale and closure decisions. We find no evidence of bankruptcy costs in industries with declining output growth, where most bankruptcies occur. In declining industries, bankrupt firms' plants are not less productive than industry averages and do not decline in productivity while in Chapter 11. In these industries, Chapter 11 appears to be a mechanism for fostering exit of capacity. In high-growth industries, there is some limited evidence of productivity declines while in Chapter 11 for a subsample of firms that remain in Chapter 11 for four or more years. Examining asset sales and closures by bankrupt firms and their competitors, we find that Chapter 11 status is of limited importance in predicting these decisions once industry and plant characteristics are taken into account. More generally, the findings imply that Chapter 11 may involve few real economic costs, and that industry effects and sample selection issues are very important in evaluating the performance of bankrupt firms.View Full Paper PDF
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Working PaperThe Financial Performance of Whole Company LBOs
November 1993
Working Paper Number:
CES-93-16
Using the previously untapped Census Quarterly Financial Report (QFR) file, we explored the financial performance of a large unbiased sample of 209 leveraged buyouts (LBOs) and 48 going private transactions occurring between 1978 and 1989. Our principal findings are: First, we confirm previous work showing that LBOs substantially increase operating performance and reduce taxes. Second, we find that the operating performance gains are sustained for three years. However, there is a significant drop in performance in the fourth and fifth years. Performance in these years is not significantly above the pre- LBO level. Third, total debt to assets displays only a slight insignificant downward trend. Thus, high debt remains after the drop in performance. Fourth, we find evidence that the performance gains decline in the mid- to late 1980s, with the exception of 1989. Fifth, the data suggest that LBOs target typical firms. The only significant pre-LBO firm characteristic was lower bank debt relative to nonbank debt. Sixth, we identify a number of factors that differentiate LBO performance. Performance tends to be higher when pre-LBO performance is low and the firm is classified as a large R&D performer. Conversely, management buyouts and buyouts involving extensive restructuring did not outperform other buyouts. Finally, we observe a clear linkage between debt and performance, since nonleveraging going-private deals have significantly lower performance than LBOs.View Full Paper PDF
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Working PaperLBOs, Debt And R&D Intensity
February 1993
Working Paper Number:
CES-93-03
This paper details the impact of debt on R&D intensity for firms undergoing a leveraged buyout (LBO). We develop seven hypotheses based on capital market imperfection theories and agency theory. To test these hypotheses, we compare 72 R&D performing LBOs with 3329 non-LBO control observations and 126 LBOs with little or no R&D expenditures. The regressions yield four statistically significant major findings. First, pre-LBO R&D intensity is roughly one-half of the overall manufacturing mean and two-thirds of the firm's industry mean. Second, LBOs cause R&D intensity to drop by 40 percent. Third, large firms tend to have smaller LBO- related declines in R&D intensity. Fourth, R&D intensive LBOs outperform both their non-LBO industry peers and other LBOs without R&D expenditures.View Full Paper PDF
