This article analyses the turnaround strategies that can help a company to recover from situation of financial distress. study presents an innovative dynamic approach follows distress lifecycle its beginning resolution while focusing on Spanish context, which differs Anglo-Saxon context traditionally considered in previous studies. The methodology case is employed order explore, in-depth basis,...

Characterizing the dependence in credit spreads and default intensities across companies is a central problem in credit risk. Existing practice typically relies on factor models or simple static Gaussian copula models. We instead use genuinely dynamic copula models which can capture univariate and multivariate non-normalities and asymmetries for large cross-sections of firms. Using weekly data ...

The 2008 financial crisis exemplifies significant uncertainties in corporate financing conditions. We develop a unified dynamic q-theoretic framework where firms have both a precautionary-savings motive and a market-timing motive for external financing and payout decisions, induced by stochastic financing conditions. The model predicts (1) cuts in investment and payouts in bad times and equity ...

Recent research in international trade emphasizes the importance of firms’ extensive margins for understanding overall patterns of trade as well as how firms respond to specific events such as trade liberalization. In this paper, we use detailed US trade statistics to provide a broad overview of how the margins of trade contribute to variation in US imports and exports across trading partners, ...

Using particle system methodologies we study the propagation of financial distress in a network of firms facing credit risk. We investigate the phenomenon of a credit crisis and quantify the losses that a bank may suffer in a large credit portfolio. Applying a large deviation principle we compute the limiting distributions of the system and determine the time evolution of the credit quality ind...

Recent research in international trade emphasizes the importance of firms’ extensive margins for understanding overall patterns of trade as well as how firms respond to specific events such as trade liberalization. In this paper, we use detailed U.S. trade statistics to provide a broad overview of how the margins of trade contribute to variation in U.S. imports and exports across trading partne...

We examine the impact of corporate currency hedging on economic stability by introducing hedging activity in a Mundell-Fleming-Tobin framework for analyzing currency and financial crises. The ratio between hedged and unhedged firms is modelled depending on firm size as well as hedging costs. The results indicate that, with an increasing fraction of hedged firms in an economy, the magnitude of a...

Using particle system methodologies we study the propagation of financial distress in a network of firms facing credit risk. We investigate the phenomenon of a credit crisis and quantify the losses that a bank may suffer in a large credit portfolio. Applying a large deviation principle we compute the limiting distributions of the system and determine the time evolution of the credit quality ind...

We consider the evolution of the euro economies of the northern (creditor) and southern (debtor) countries during the euro crisis in terms of an idealized stocks-and-flows, two-country (North-South) model based on four key actors (banks, firms, households and governments) in each country. Each actor is characterized by a stock of money (box) and money flows (hour glases) to neighbouring actors....

the purpose of this study is presenting a model forecasting financial crisis in tehran stock exchange listed companies. to do this, productive firms that had been accepted in tehran stock exchange between 2002 and 2009, were selected as the study sample. first the independent variables were obtained based on financial ratios and then based on article 141 of the law of commerce, the insolvent an...