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Published: May 19, 2003


Undifferentiate Your Way out of Debt

Undifferentiation does not mean a company is giving in to bankruptcy; it’s a step toward reducing the effect of perceived insolvency on existing and potential customers. Keeping a hold on that customer base reduces the chances that a financial crunch will turn into a crisis. Daring to be the same, not different, is the discipline that debt imposes on struggling companies.

Gyöngyi Lóránth,
Gyöngyi Lóránth is a research fellow at the London Business School’s Centre for New and Emerging Markets (CNEM) and a research affiliate of the Centre for Economic Policy Research (CEPR).

Stefan Arping,
Stefan Arping is an assistant professor of finance at the University of Amsterdam. He is coauthor, with Gyöngyi Lóránth, of a CEPR working paper titled “Corporate Leverage and Product Differentiation Strategy.”
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