This study investigates how initiating a credit default swap (CDS) affects firm risk. Using the firm value volatility as a measure of firm risk, we document that firm risk decreases following the commencement of CDS trading. Further analysis indicates that the empty creditor channel, which arises when a debt holder with CDS protection has no interest in preserving the company it provides funds, is the primary way of influence. Our findings reveal a significant impact of financial innovation on a firm's behavior. We also document that market frictions affect the degree of such effect.

中文翻译：

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信用违约掉期和公司风险

本研究调查启动信用违约掉期（CDS）如何影响公司风险。使用公司价值波动性作为公司风险的衡量标准，我们记录了 CDS 交易开始后公司风险下降。进一步分析表明，当受 CDS 保护的债权人无意保护其提供资金的公司时，就会出现空债权人渠道，这是主要的影响方式。我们的研究结果揭示了金融创新对企业行为的重大影响。我们还记录了市​​场摩擦会影响这种效应的程度。