{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,3,27]],"date-time":"2026-03-27T04:03:02Z","timestamp":1774584182645,"version":"3.50.1"},"reference-count":59,"publisher":"Oxford University Press (OUP)","issue":"6","license":[{"start":{"date-parts":[[2023,4,12]],"date-time":"2023-04-12T00:00:00Z","timestamp":1681257600000},"content-version":"vor","delay-in-days":0,"URL":"https:\/\/creativecommons.org\/licenses\/by\/4.0\/"}],"funder":[{"DOI":"10.13039\/100010663","name":"European Research Council","doi-asserted-by":"publisher","award":["852577"],"award-info":[{"award-number":["852577"]}],"id":[{"id":"10.13039\/100010663","id-type":"DOI","asserted-by":"publisher"}]},{"DOI":"10.13039\/100010663","name":"European Research Council","doi-asserted-by":"publisher","id":[{"id":"10.13039\/100010663","id-type":"DOI","asserted-by":"publisher"}]},{"name":"European Union\u2019s Horizon 2020","award":["740272"],"award-info":[{"award-number":["740272"]}]},{"name":"Funda\u00e7\u00e3o para a Ci\u00eancia e Tecnologia"}],"content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"published-print":{"date-parts":[[2023,11,15]]},"abstract":"<jats:title>Abstract<\/jats:title>\n               <jats:p>We estimate the indirect costs of financial distress due to lost sales by exploiting real estate (RE) shocks and cross-supplier variation in RE assets and leverage. We show that for the same client buying from different suppliers, the client\u2019s purchases from distressed suppliers decline by an additional 13% following a drop in local RE prices. The effect is more pronounced in more competitive industries, manufacturing, durable goods, less-specific goods, and when the costs of switching suppliers are low. Our results suggest that clients reduce their exposure to suppliers in financial distress.<\/jats:p>","DOI":"10.1093\/rof\/rfad014","type":"journal-article","created":{"date-parts":[[2023,4,12]],"date-time":"2023-04-12T09:34:45Z","timestamp":1681292085000},"page":"2233-2270","source":"Crossref","is-referenced-by-count":10,"title":["Indirect Costs of Financial Distress"],"prefix":"10.1093","volume":"27","author":[{"given":"Cl\u00e1udia","family":"Cust\u00f3dio","sequence":"first","affiliation":[{"name":"Imperial College Business School , South Kensington Campus , London, SW7 2AZ,","place":["UK"]},{"name":"ECGI , Brussels,","place":["Belgium"]},{"name":"CEPR , London,","place":["UK"]}]},{"given":"Miguel A","family":"Ferreira","sequence":"additional","affiliation":[{"name":"ECGI , Brussels,","place":["Belgium"]},{"name":"CEPR , London,","place":["UK"]},{"name":"Nova School of Business and Economics , R. da Holanda 1 , Carcavelos, 2775-405,","place":["Portugal"]}]},{"given":"Emilia","family":"Garcia-Appendini","sequence":"additional","affiliation":[{"name":"Norges Bank , Bankplassen 2. PB 1179 , Oslo, NO-0107.","place":["Norway"]},{"name":"University of Zurich , R\u00e4mistrasse 71 , Zurich, 8006,","place":["Switzerland"]}]}],"member":"286","published-online":{"date-parts":[[2023,4,12]]},"reference":[{"key":"2025100616142404200_rfad014-B1","doi-asserted-by":"crossref","first-page":"288","DOI":"10.1016\/j.jfineco.2015.03.005","article-title":"House prices, collateral, and self-employment","volume":"117","author":"Adelino","year":"2015","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B2","author":"Almeida","year":"2018"},{"key":"2025100616142404200_rfad014-B3","doi-asserted-by":"crossref","first-page":"2557","DOI":"10.1111\/j.1540-6261.2007.01286.x","article-title":"The risk-adjusted cost of financial distress","volume":"62","author":"Almeida","year":"2007","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B4","doi-asserted-by":"crossref","first-page":"1443","DOI":"10.1111\/0022-1082.00062","article-title":"How costly is financial (not economic) distress? Evidence from highly leveraged transactions that became distressed","volume":"53","author":"Andrade","year":"1998","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B5","doi-asserted-by":"crossref","first-page":"2907","DOI":"10.1111\/jofi.13077","article-title":"Talent in distressed firms: investigating the labor costs of financial distress","volume":"76","author":"Baghai","year":"2021","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B6","doi-asserted-by":"crossref","first-page":"572","DOI":"10.1093\/restud\/rdt046","article-title":"Do firms want to borrow more? Testing credit constraints using a directed lending program","volume":"81","author":"Banerjee","year":"2014","journal-title":"Review of Economic Studies"},{"key":"2025100616142404200_rfad014-B7","doi-asserted-by":"crossref","first-page":"2507","DOI":"10.1111\/j.1540-6261.2008.01403.x","article-title":"Buyer\u2013supplier relationships and the stakeholder theory of capital structure","volume":"63","author":"Banerjee","year":"2008","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B8","doi-asserted-by":"crossref","first-page":"1543","DOI":"10.1093\/qje\/qjw018","article-title":"Input specificity and the propagation of idiosyncratic shocks in production networks","volume":"131","author":"Barrot","year":"2016","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B9","first-page":"14","article-title":"Agency costs, net worth, and business fluctuations","volume":"79","author":"Bernanke","year":"1989","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B10","doi-asserted-by":"crossref","first-page":"1341","DOI":"10.1016\/S1574-0048(99)10034-X","volume-title":"Handbook of Macroeconomics","author":"Bernanke","year":"1999"},{"key":"2025100616142404200_rfad014-B11","doi-asserted-by":"crossref","first-page":"1339","DOI":"10.1093\/rfs\/hhn044","article-title":"Forecasting default with the Merton distance to default model","volume":"21","author":"Bharath","year":"2008","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B12","first-page":"93","article-title":"A theory of predation based on agency problems in financial contracting","volume":"80","author":"Bolton","year":"1990","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B13","doi-asserted-by":"crossref","first-page":"507","DOI":"10.1111\/jofi.12367","article-title":"Boarding a sinking ship? An investigation of job applications to distressed firms","volume":"71","author":"Brown","year":"2016","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B14","doi-asserted-by":"crossref","first-page":"611","DOI":"10.1016\/j.jfineco.2021.06.021","article-title":"Do real estate values boost corporate borrowing? Evidence from contract-level data","volume":"144","author":"Campello","year":"2022","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B15","doi-asserted-by":"crossref","first-page":"2381","DOI":"10.1257\/aer.102.6.2381","article-title":"The collateral channel: how real estate shocks affect corporate investment","volume":"102","author":"Chaney","year":"2012","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B16","first-page":"703","article-title":"Capital-market imperfections and countercyclical markups: theory and evidence","volume":"86","author":"Chevalier","year":"1996","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B17","doi-asserted-by":"crossref","first-page":"2017","DOI":"10.1111\/jofi.12430","article-title":"Financing constraints and workplace safety","volume":"71","author":"Cohn","year":"2016","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B18","doi-asserted-by":"crossref","first-page":"2690","DOI":"10.1093\/rfs\/hhu035","article-title":"Real estate prices and firm capital structure","volume":"27","author":"Cvijanovi\u0107","year":"2014","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B19","first-page":"245279","article-title":"Ensuring sales: a theory of inter-firm credit","volume":"3","author":"Daripa","year":"2011","journal-title":"American Economic Journal: Microeconomics"},{"key":"2025100616142404200_rfad014-B20","doi-asserted-by":"crossref","first-page":"1029","DOI":"10.1111\/j.1540-6261.1995.tb04049.x","article-title":"Performance changes following top management dismissals","volume":"50","author":"Denis","year":"1995","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B21","doi-asserted-by":"crossref","first-page":"163","DOI":"10.1111\/jofi.12215","article-title":"Urban vibrancy and corporate growth","volume":"70","author":"Dougal","year":"2015","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B22","doi-asserted-by":"crossref","first-page":"4201","DOI":"10.1093\/rfs\/hhab128","article-title":"The geography of value creation","volume":"35","author":"Dougal","year":"2022","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B23","doi-asserted-by":"crossref","first-page":"62","DOI":"10.1016\/j.jfineco.2012.02.005","article-title":"The cost and timing of financial distress","volume":"105","author":"Elkamhi","year":"2012","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B24","doi-asserted-by":"crossref","first-page":"1195","DOI":"10.1257\/aer.100.3.1195","article-title":"What causes industry agglomeration? Evidence from coagglomeration patterns","volume":"100","author":"Ellison","year":"2010","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B25","doi-asserted-by":"crossref","first-page":"366","DOI":"10.2307\/2555717","article-title":"A \u201csignal-jamming\u201d theory of predation","volume":"17","author":"Fudenberg","year":"1986","journal-title":"RAND Journal of Economics"},{"key":"2025100616142404200_rfad014-B26","doi-asserted-by":"crossref","first-page":"709","DOI":"10.1016\/j.jfineco.2006.06.007","article-title":"Collateral, debt capacity, and corporate investment: evidence from a natural experiment","volume":"85","author":"Gan","year":"2007","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B27","doi-asserted-by":"crossref","first-page":"547","DOI":"10.1016\/j.jfineco.2012.06.007","article-title":"Geographic dispersion and stock returns","volume":"106","author":"Garcia","year":"2012","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B28","doi-asserted-by":"crossref","first-page":"785","DOI":"10.1257\/aer.20150248","article-title":"Inflation dynamics during the financial crisis","volume":"107","author":"Gilchrist","year":"2017","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B29","doi-asserted-by":"crossref","first-page":"271","DOI":"10.1093\/qje\/qjw035","article-title":"Firm leverage, consumer demand, and employment losses during the great recession","volume":"132","author":"Giroud","year":"2017","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B30","doi-asserted-by":"crossref","first-page":"1909","DOI":"10.1093\/rfs\/hhq009","article-title":"New evidence on measuring financial constraints: moving beyond the KZ Index","volume":"23","author":"Hadlock","year":"2010","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B31","doi-asserted-by":"crossref","first-page":"245","DOI":"10.1016\/S0304-405X(98)00012-9","article-title":"Debt and the terms of employment","volume":"48","author":"Hanka","year":"1998","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B32","doi-asserted-by":"crossref","first-page":"841","DOI":"10.2307\/2118350","article-title":"A theory of debt based on the inalienability of human capital","volume":"109","author":"Hart","year":"1994","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B33","doi-asserted-by":"crossref","first-page":"1248","DOI":"10.1093\/rfs\/hht006","article-title":"Indirect costs of financial distress in durable goods industries: the case of auto manufacturers","volume":"26","author":"Hortacsu","year":"2013","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B34","doi-asserted-by":"crossref","first-page":"5","DOI":"10.1257\/jel.47.1.5","article-title":"Recent developments in the econometrics of program evaluation","volume":"47","author":"Imbens","year":"2009","journal-title":"Journal of Economic Literature"},{"key":"2025100616142404200_rfad014-B35","doi-asserted-by":"crossref","first-page":"321","DOI":"10.1016\/j.jfineco.2005.12.007","article-title":"Corporate capital structure and the characteristics of suppliers and customers","volume":"83","author":"Kale","year":"2007","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B36","doi-asserted-by":"crossref","first-page":"169","DOI":"10.1162\/003355397555163","article-title":"Do investment-cash flow sensitivities provide useful measures of financing constraints?","volume":"112","author":"Kaplan","year":"1997","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B37","doi-asserted-by":"crossref","first-page":"1413","DOI":"10.1257\/aer.98.4.1413","article-title":"Tracing the impact of bank liquidity shocks: evidence from an emerging market","volume":"98","author":"Khwaja","year":"2008","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B38","author":"Kim","year":"2018"},{"key":"2025100616142404200_rfad014-B39","doi-asserted-by":"crossref","first-page":"790","DOI":"10.1093\/rfs\/hhw092","article-title":"Impact of financial leverage on the incidence and severity of product failures: evidence from product recall","volume":"30","author":"Kini","year":"2017","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B40","doi-asserted-by":"crossref","first-page":"211","DOI":"10.1086\/262072","article-title":"Credit cycles","volume":"105","author":"Kiyotaki","year":"1997","journal-title":"Journal of Political Economy"},{"key":"2025100616142404200_rfad014-B41","doi-asserted-by":"crossref","first-page":"375","DOI":"10.2307\/1885068","article-title":"Markets with consumer switching costs","volume":"102","author":"Klemperer","year":"1987","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B42","doi-asserted-by":"crossref","first-page":"2137","DOI":"10.1111\/j.1540-6261.2010.01612.x","article-title":"The Net Benefits to Leverage","volume":"65","author":"Korteweg","year":"2010","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B43","doi-asserted-by":"crossref","first-page":"229","DOI":"10.1093\/qje\/qjaa030","article-title":"Anatomy of corporate borrowing constraints","volume":"136","author":"Lian","year":"2021","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B44","doi-asserted-by":"crossref","first-page":"175","DOI":"10.1093\/rfs\/4.1.175","article-title":"Financial policy and reputation for product quality","volume":"4","author":"Maksimovic","year":"1991","journal-title":"Review of Financial Studies"},{"key":"2025100616142404200_rfad014-B45","first-page":"137","article-title":"Running on empty? Financial leverage and product quality in the supermarket industry","volume":"3","author":"Matsa","year":"2011","journal-title":"American Economic Journal: Microeconomics"},{"key":"2025100616142404200_rfad014-B46","first-page":"449","article-title":"On the pricing of corporate debt: the risk structure of interest rates","volume":"29","author":"Merton","year":"1974","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B47","doi-asserted-by":"crossref","first-page":"2132","DOI":"10.1257\/aer.101.5.2132","article-title":"House prices, home equity-based borrowing, and the US household leverage crisis","volume":"101","author":"Mian","year":"2011","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B48","doi-asserted-by":"crossref","first-page":"2197","DOI":"10.3982\/ECTA10451","article-title":"What explains the 2007\u20132009 drop in employment?","volume":"82","author":"Mian","year":"2014","journal-title":"Econometrica"},{"key":"2025100616142404200_rfad014-B49","first-page":"261","article-title":"The cost of capital, corporation finance, and the theory of investment","volume":"48","author":"Modigliani","year":"1958","journal-title":"American Economic Review"},{"key":"2025100616142404200_rfad014-B50","doi-asserted-by":"crossref","first-page":"337","DOI":"10.1111\/jeea.12067","article-title":"Vertical relations under credit constraints","volume":"12","author":"Nocke","year":"2014","journal-title":"Journal of the European Economic Association"},{"key":"2025100616142404200_rfad014-B51","first-page":"1985","article-title":"The determinants of leveraged buyout activity: free cash flow vs","volume":"48","author":"Opler","year":"1993","journal-title":"Financial Distress Costs, Journal of Finance"},{"key":"2025100616142404200_rfad014-B52","doi-asserted-by":"crossref","first-page":"1015","DOI":"10.1111\/j.1540-6261.1994.tb00086.x","article-title":"Financial distress and corporate performance","volume":"49","author":"Opler","year":"1994","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B53","author":"Paravisini","year":"2020"},{"key":"2025100616142404200_rfad014-B54","author":"Rampini","year":"2020"},{"key":"2025100616142404200_rfad014-B55","doi-asserted-by":"crossref","first-page":"1253","DOI":"10.1162\/qjec.2010.125.3.1253","article-title":"The geographic determinants of housing supply","volume":"125","author":"Saiz","year":"2010","journal-title":"Quarterly Journal of Economics"},{"key":"2025100616142404200_rfad014-B56","doi-asserted-by":"crossref","first-page":"1667","DOI":"10.1093\/rof\/rfx032","article-title":"Indirect costs of financial distress and bankruptcy law: evidence from trade credit and sales","volume":"22","author":"Sautner","year":"2018","journal-title":"Review of Finance"},{"key":"2025100616142404200_rfad014-B57","doi-asserted-by":"crossref","first-page":"99","DOI":"10.1111\/jofi.12468","article-title":"Housing collateral and entrepreneurship","volume":"72","author":"Schmalz","year":"2017","journal-title":"Journal of Finance"},{"key":"2025100616142404200_rfad014-B58","doi-asserted-by":"crossref","first-page":"137","DOI":"10.1016\/0304-405X(84)90035-7","article-title":"The effect of capital structure on a firm\u2019s liquidation decision","volume":"13","author":"Titman","year":"1984","journal-title":"Journal of Financial Economics"},{"key":"2025100616142404200_rfad014-B59","doi-asserted-by":"crossref","first-page":"401","DOI":"10.1093\/rof\/rfm017","article-title":"A dynamic model of optimal capital structure","volume":"11","author":"Titman","year":"2007","journal-title":"Review of Finance"}],"container-title":["Review of Finance"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/academic.oup.com\/rof\/advance-article-pdf\/doi\/10.1093\/rof\/rfad014\/50067254\/rfad014.pdf","content-type":"application\/pdf","content-version":"am","intended-application":"syndication"},{"URL":"https:\/\/academic.oup.com\/rof\/article-pdf\/27\/6\/2233\/53333877\/rfad014.pdf","content-type":"application\/pdf","content-version":"vor","intended-application":"syndication"},{"URL":"https:\/\/academic.oup.com\/rof\/article-pdf\/27\/6\/2233\/53333877\/rfad014.pdf","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,10,6]],"date-time":"2025-10-06T20:21:12Z","timestamp":1759782072000},"score":1,"resource":{"primary":{"URL":"https:\/\/academic.oup.com\/rof\/article\/27\/6\/2233\/7115874"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2023,4,12]]},"references-count":59,"journal-issue":{"issue":"6","published-online":{"date-parts":[[2023,4,12]]},"published-print":{"date-parts":[[2023,11,15]]}},"URL":"https:\/\/doi.org\/10.1093\/rof\/rfad014","relation":{},"ISSN":["1572-3097","1573-692X"],"issn-type":[{"value":"1572-3097","type":"print"},{"value":"1573-692X","type":"electronic"}],"subject":[],"published-other":{"date-parts":[[2023,11,1]]},"published":{"date-parts":[[2023,4,12]]}}}