Campus Only Senior Thesis
Bachelor of Arts
© 2013 Matthew Ellis
Previous research on the coinsurance effect solely focuses on the coinsurance of corporate debt and ignores the possibility that a combined entity’s assets may coinsure other financial obligations with debt-like characteristics. The present study examines the breadth of the coinsurance effect by testing whether the theory extends to labor obligations. Using an event study methodology, I analyze merger events between the 2000-2012 period. I investigate how acquirer shareholders are affected by the coinsurance effect during this period by examining acquirer common stock returns at the announcement date of the merger event. My results do not produce significant evidence to suggest that the coinsurance effect can be extended to include labor obligations. Moreover, no significant evidence of the coinsurance effect is discovered in the analysis.
Ellis, Matthew, "An Examination of the Breadth of the Coinsurance Effect: The Effect of Labor Leverage on Acquirer Returns" (2013). CMC Senior Theses. 616.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.