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Firms under Judicial Protection: A Profitable Investment?

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  • Xavier Bredart

Abstract

The objective of this article is to observe stock prices of firms around their filing for liquidation or reorganization procedure. Through a methodology developed for this purpose, we compare the stock returns of these firms with that of ¡°similar¡± companies but not affected by this type of event. The results report higher average market profitability for firms under protection of the American bankruptcy code for a holding period of between 1 and 5 months after the announcement date.

Suggested Citation

  • Xavier Bredart, 2014. "Firms under Judicial Protection: A Profitable Investment?," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 14-22, September.
    • Handle: RePEc:jfr:rwe111:v:5:y:2014:i:2:p:14-22
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    References listed on IDEAS

    as
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