Browsing by Author "Silva, Filipe André Perre da"
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- Contagion intra-industry effects of bankruptciesPublication . Silva, Filipe André Perre da; Bonfim, Diana Carina Ribeiro GuimarãesThis dissertation investigates the effect of bankruptcies on the industry performance, focusing on the bankrupt firm’s competitors. We test whether the market reacts only on the day of the filling to Chapter 7 (as proven in the previous literature) or if the market also reacts on the day of the effective bankruptcy. In industries with a low degree of competition there is a statistically significant decrease in the industry’s returns during a 11 days period (being the 6th day, the day when the firm is delisted from the stock market), with an average daily return of -0.137%. The same happens for industries with a high degree of competition, with an average daily return of -0.081%. Industry 6000 – “Finance, Insurance and Real Estate” presents the best results to provide evidence for the hypothesis that the market reacts on the announcement and on the effective day of the bankruptcy, with an average excess return for the 3 days (being the 2nd day, the day when the firm is delisted from the stock market) of -0.28%.