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Costs of Financial Distress: The German Evidence

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Reimund, C., Schwetzler, B., Zainhofer, F. Costs of Financial Distress: The German Evidence. Credit and Capital Markets – Kredit und Kapital, 42(1), 93-123. https://doi.org/10.3790/kuk.42.1.93
Reimund, Carsten; Schwetzler, Bernhard and Zainhofer, Florian "Costs of Financial Distress: The German Evidence" Credit and Capital Markets – Kredit und Kapital 42.1, 2009, 93-123. https://doi.org/10.3790/kuk.42.1.93
Reimund, Carsten/Schwetzler, Bernhard/Zainhofer, Florian (2009): Costs of Financial Distress: The German Evidence, in: Credit and Capital Markets – Kredit und Kapital, vol. 42, iss. 1, 93-123, [online] https://doi.org/10.3790/kuk.42.1.93

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Costs of Financial Distress: The German Evidence

Reimund, Carsten | Schwetzler, Bernhard | Zainhofer, Florian

Credit and Capital Markets – Kredit und Kapital, Vol. 42 (2009), Iss. 1 : pp. 93–123

4 Citations (CrossRef)

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Dr. Carsten Reimund, c/o Handelshochschule Leipzig (HHL), Lehrstuhl Finanzmanagement und Banken, Jahnallee 59, D-04109 Leipzig.

Prof. Dr. Bernhard Schwetzler, c/o Handelshochschule Leipzig (HHL), Lehrstuhl Finanzmanagement und Banken, Jahnallee 59, D-04109 Leipzig.

Dr. Florian Zainhofer, c/o Handelshochschule Leipzig (HHL), Lehrstuhl Finanzmanagement und Banken, Jahnallee 59, D-04109 Leipzig.

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Abstract

Costs of Financial Distress: The German Evidence

In this paper we aim to verify the existence of costs of financial distress (cfd) for a sample of German CDAX firms using an ex-post approach originally due to Opler/Titman (1994). In contrast to this US-based study we do not find a significant interaction between high leverage and distress for German firms: firms in distressed industries with high ex ante leverage do not display lower sales growth than their ex-ante lower levered counterparts. (JEL G32, G33)