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  • February 2023
  • Article
  • Journal of Finance

Disruption and Credit Markets

By: Bo Becker and Victoria Ivashina
  • Format:Print
  • | Pages:35
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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.

Keywords

Default; Corporate Bonds; Disruption; Corporate Finance; Bonds

Citation

Becker, Bo, and Victoria Ivashina. "Disruption and Credit Markets." Journal of Finance 78, no. 1 (February 2023): 105–139.
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About The Author

Victoria Ivashina

Finance
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  • York Capital CLOs and WorldStrides International By: Victoria Ivashina and William Vrattos
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