Disruption and Credit Markets

Bo Becker and Victoria Ivashina

No 29890, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that over the past half century innovative disruptions were central to understanding corporate defaults. In a given year, industries experiencing abnormally high VC or IPO activity subsequently see higher default rates, higher segment exits by conglomerates, and higher yields on bonds issued by the firms in these industries. Overall, we find that disruption is a broad phenomenon, negatively affecting incumbent firms across the spectrum of age, valuation, and levers, with the exception of very large and low-leverage firms, which confirms our central hypothesis.

JEL-codes: G12 G30 G32 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-cfn and nep-fdg
Note: CF PR
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Citations: View citations in EconPapers (1)

Published as BO BECKER & VICTORIA IVASHINA, 2023. "Disruption and Credit Markets," The Journal of Finance, vol 78(1), pages 105-139.

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Related works:
Journal Article: Disruption and Credit Markets (2023)
Working Paper: Disruption and Credit Markets (2019)
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