| Chapter 1 examines the performance of distressed firms and relates it to main bank relationship and group affiliation in Japan. Distressed firms that are more dependent on their main banks have lower sales growth and lower return-on-assets in the three years following the distress during 1993-1999. The duration of distress is longer as well for those firms. The results contrast to those in the 1978-1992, suggesting that bank's ability or willingness to help distressed client firms is impaired in the later period when the banking industry is in trouble. Furthermore, main bank's health is positively related to the firm's post-distress sales growth, ROA and recovery from distress. The positive role of group affiliation in helping distressed firms appears strong in the later period.;Chapter 2 examines whether, and how, leveraged buyouts from the most recent wave of public to private transactions created value. For a sample between 1990 and 2006, we show that these deals are somewhat more conservatively priced and lower levered than their predecessors from the 1980s. For the subsample of deals with post-buyout data available, median market adjusted returns to pre- and post-buyout capital invested are 78% and 36%, respectively. In contrast, gains in operating performance are either comparable to or slightly exceed those observed for benchmark firms. We examine the relative contribution of several potential determinants of returns; in addition to gains in operating performance, returns are strongly related to increases in industry valuation multiples. Overall, our results provide insights into how transactions from the most recent wave of leveraged buyouts created value.;Chapter 3 examines the relation between diversification, analyst coverage, and firm values. I show that diversification is negatively related to analyst coverage. More analyst coverage is associated with higher excess value. The effect of analyst coverage on firm value is (weakly) stronger for non-diversified firms than diversified firms. After controlling for the difference in analyst coverage, the diversification discount documented in Berger and Ofek (1995) decreases by about 39-76% in magnitude. |
