How Costly is Financial (Not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed
研究31笔高杠杆交易，这些交易陷入财务困境而非经济困境。结果显示，从交易前到困境解决，价值略有增加，表明1980年代末的高杠杆交易整体创造了价值。财务困境成本估计为企业价值的10%至20%，但未遭受经济冲击的子样本中成本可忽略。
This paper studies thirty‐one highly leveraged transactions (HLTs) that become financially, not economically, distressed. The net effect of the HLT and financial distress (from pretransaction to distress resolution, market‐ or industry‐adjusted) is to increase value slightly. This finding strongly suggests that, overall, the HLTs of the late 1980s created value. We present quantitative and qualitative estimates of the (direct and indirect) costs of financial distress and their determinants. We estimate financial distress costs to be 10 to 20 percent of firm value. For a subset of firms that do not experience an adverse economic shock, financial distress costs are negligible.