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Is Debt Relief Efficient? Author info | Abstract | Publisher info | Download info | Related research | Statistics SERKAN ARSLANALP
PETER BLAIR HENRY
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When developing countries announce debt relief agreements under the Brady Plan, their stock markets appreciate by an average of 60% in real dollar terms-a $42 billion increase in shareholder value. There is no significant stock market increase for a control group of countries that do not sign Brady agreements. The stock market appreciations successfully forecast higher future resource transfers, investment, and growth. Since the market capitalization of U.S. commercial banks with developing country loan exposure also rises-by $13 billion-the results suggest that both borrower and lenders can benefit from debt relief when the borrower suffers from debt overhang. Copyright 2005 by The American Finance Association.
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Article provided by American Finance Association in its journal The Journal of Finance .
Volume (Year): 60 (2005)
Issue (Month): 2 (04)
Pages: 1017-1051
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Handle: RePEc:bla:jfinan:v:60:y:2005:i:2:p:1017-1051Contact details of provider: Web page: http://www.afajof.org/ More information through EDIRC
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Paper Serkan Arslanalp & Peter Blair Henry, 2004.
"Is Debt Relief Efficient? ,"
NBER Working Papers
10217, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Henry, Peter B. & Arslanalp, Serkan, 2003.
"Is Debt Relief Efficient? ,"
Research Papers
1837, Stanford University, Graduate School of Business.
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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