Feedback and Contagion through Distressed Competition

We are grateful to Frederico Belo, Pierre Collin-Dufresne, Lorenzo Garlappi, Itay Goldstein, Joao Gomes, Lars-Alexander Kuehn, Konstantin Milbradt, Erwan Morellec, Erik Loualiche, Lukas Schmid, Robert M. Townsend, Jessica Wachter, Neng Wang, and Wei Xiong for detailed discussions and comments. We also thank Andy Abel, Ilona Babenko, Jess Benhabib, Utpal Bhattacharya, Cecilia Bustamante, Alexandre Corhay, Sudipto Dasgupta, Itamar Drechsler, Jan Eberly, Vincent Glode, Vidhan Goyal, Zhiguo He, Zongbo Huang, Urban Jermann, Ken Judd, Ron Kaniel, Don Keim, Richard Kihlstrom, Tim Landvoigt, Kai Li, Wenhao Li, Ye Li, Xuewen Liu, Zheng Liu, Deborah Lucas, Jianjun Miao, Thien T. Nguyen, Yoshio Nozawa, Mark Paddrik, Lin Peng, Krishna Ramaswamy, Adriano Rampini, Nick Roussanov, Ji Shen, Matthew Spiegel, Rob Stambaugh, Sheriden Titman, Jincheng Tong, Yajun Wang, Wei Wang, Toni Whited, Colin Ward, Iván Werning, Liyan Yang, Jialin Yu, Alminas Zaldokas, Zhou Zhen, Francesca Zucchi, and participants at the AFA, CFRC, CICF, Conference on Systemic Risk and Financial Stability, CUHK-Shenzhen, CUNY, EFA, FMCG, FOM Research Group Conference, HKUST-Jinan Macro Workshop, HKUST, Macro Finance Society Workshop, McGill-HEC Winter Conference, MFA, NBER SI Capital Markets and the Economy, NFA, NYU Five Star Conference, Peking University, PHBS Workshop on Macroeconomics and Finance, Richmond Fed, SFS Cavalcade, Stanford SITE, Summer Institute of Finance conference, Swiss Finance Institute at EPFL, Tsinghua SEM alumni conference, University of Connecticut, University of Michigan, University of Texas at Dallas, University of Toronto, Utah Winter Finance Conference, Wharton Micro Virtual Seminar, and Wharton MLG seminar for comments. Winston Dou is grateful for the financial support of the Rodney L. White Center for Financial Research and the Mack Institute for Innovation Management. Yan Ji is grateful for the financial support of the Hong Kong RGC ECS Grant (Project No. 26502619). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

• data appendix
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• January 10, 2023