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We examine the within-firm resource allocation and restructuring effects of creditor intervention and their relationship to performance gains at firms violating covenants in private credit agreements. By linking firms to establishment-level data from the U.S.
Census Bureau, we demonstrate that covenant violations are followed by large reductions in employment and more frequent establishment sales and closures. These cuts are concentrated in violating firms? noncore business lines and underperforming establishments. We conclude that refocusing operations and improving productive efficiency are important channels through which creditors enhance violating firms? performance.
Many companies have recently been following the so-called corporate purpose concept that is recommended by leading management scholars. To this end,...
Over more than forty years, the European Union (formerly the European Community) has enacted a large number of directives aimed at harmonising company...
Alibaba, the e-commerce giant that completed a record-setting IPO in the United States in 2014 and was valued at over $700 billion in early 2021, is one of...