Disruption and Credit Markets / Bo Becker, Victoria Ivashina.

Format:

Book

Author/Creator:

Becker, Bo.

Contributor:

National Bureau of Economic Research.

Ivashina, Victoria.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29890.

NBER working paper series no. w29890

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

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.

Notes:

Print version record

March 2022.