Document Type
Article
Keywords
institutional investors; corporate finance; corporate bankruptcy; stocks; organizational performance; stockholders; asset acquisitions; bankruptcies; bankrupt; net buyers
Identifier Data
2158-3625
Publisher
North American Business Press
Publication Source
Journal of Accounting and Finance
Abstract
We analyze investment behavior of institutional managers who hold and trade shares of firms that file for bankruptcy. We find that during the five-year period preceding a bankruptcy filing, institutional investors (except those managing investment companies) are net buyers with a positive abnormal net number of shares traded during the period. Institutional managers start to sell shares of bankrupt firms sooner in some firms than in others; these earlier sales are of smaller firms with weaker operating performance, and lower equity risk. We do not find evidence that institutional stockholders trade strategically and avoid material price declines before they occur.
Included in
Accounting Commons, Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance and Financial Management Commons
