Article | Journal of the Academy of Marketing Science | fall 1997

Commentary on 'Exploring the Implications of the Internet for Consumer Marketing'

Keywords: Online Technology; Web; Customers; Marketing;

Format: Print

Citation:

Deighton, J. A. "Commentary on 'Exploring the Implications of the Internet for Consumer Marketing'." Journal of the Academy of Marketing Science 25, no. 4 (fall 1997).

We show that the credit quality of corporate debt issuers deteriorates during credit booms, and that this deterioration forecasts low excess returns to corporate bondholders. The key insight is that changes in the pricing of credit risk disproportionately affect the financing costs faced by low quality firms, so the debt issuance of low quality firms is particularly useful for forecasting bond returns. We show that a significant decline in issuer quality is a more reliable signal of credit market overheating than rapid aggregate credit growth. We use these findings to investigate the forces driving time-variation in expected corporate bond returns.

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Commentary on 'Exploring the Implications of the Internet for Consumer Marketing'

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