Do Asset Fire Sales Exist? An Empirical Investigation Of Commercial  

Oleh:

Pulvino, Todd

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 53 no. 3 (Jun. 1998), page 939-978.
Topik: Fire Sales Exis; Empirical Investigation; the capital; liquidation of assets; transactions aircraft
Fulltext: p 939.pdf (455.99KB)

Isi artikel

This paper uses commercial aircraft transactions to determine whether capital constraints cause firms to liquidate assets at discounts to fundamental values. Results indicate that financially constrained airlines receive lower prices than their unconstrained rivals when selling used narrow-body aircraft. Capital constrained airlines are also more likely to sell used aircraft to industry outsiders, especially during market downturns. Further evidence that capital constraints affect liquidation prices is provided by airlines’ asset acquisition activity. Unconstrained airlines significantly increase buying activity when aircraft prices are depressed; this pattern is not observed for financially constrained airlines.

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