Flexibility costs of debt: Danish exporters during the cartoon crisis

被引:5
作者
Friedrich, Benjamin U. [1 ,2 ]
Zator, Michal [3 ]
机构
[1] Northwestern Univ, Kellogg Sch Management, 2211 Campus Dr, Evanston, IL 60208 USA
[2] Aarhus Univ, Dept Econ & Business Econ, Fuglesangs Alle 4, DK-8210 Aarhus, Denmark
[3] Univ Notre Dame, Mendoza Coll Business, Notre Dame, IN 46556 USA
关键词
Flexibility; Capital structure; Product markets; Consumer boycott; PRODUCT MARKET BEHAVIOR; CAPITAL STRUCTURE; FINANCING CONSTRAINTS; TRADE EVIDENCE; INTERNATIONAL-TRADE; CORPORATE-FINANCE; CASH FLOW; INVESTMENT; FIRMS; DISTRESS;
D O I
10.1016/j.jfineco.2023.03.001
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We study how firms respond to an unexpected demand shock, exploiting the 2006 boycott of Danish products after publication of Muhammad caricatures. On average, affected firms lose the majority of their exports to Muslim countries and experience a significant decrease in total sales. However, firms with low financial leverage redirect sales to new and existing product-destination markets in non-Muslim countries, which allows them to fully offset their losses. In contrast, high-leverage firms do not enter new markets and instead actively downsize. Our results highlight the importance of financial flexibility in times of crisis, consistent with declarations of practitioners.(c) 2023 Elsevier B.V. All rights reserved.
引用
收藏
页码:91 / 117
页数:27
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