IDEAS home Printed from https://ideas.repec.org/a/spr/reaccs/v30y2025i2d10.1007_s11142-024-09857-1.html
   My bibliography  Save this article

Exposure to superstar firms and financial distress

Author

Listed:
  • Stephanie F. Cheng

    (Tulane University)

  • Dushyantkumar Vyas

    (University of Toronto)

  • Regina Wittenberg-Moerman

    (Kellogg School of Management, Northwestern University)

  • Wuyang Zhao

    (McGill University)

Abstract

A few highly successful firms (“superstar firms”) have captured large market shares and earned massive profits in recent decades. We examine whether superstar firms are associated with a greater likelihood of financial distress for firms exposed to them in product markets. Building on recent research, we identify superstars as firms with the highest markups in the industry and whose industry markup share increases over time. We then measure, with product similarity scores, a firm’s overall product market exposure to superstars. We document that firms with greater exposure are more likely to file for bankruptcy. We examine why superstar exposure is associated with bankruptcy and show that firms with the greater superstar exposure exhibit weaker financial performance and greater riskiness. Furthermore, we show that the association between superstar exposure and the likelihood of bankruptcy strengthens when superstars have greater market power.

Suggested Citation

  • Stephanie F. Cheng & Dushyantkumar Vyas & Regina Wittenberg-Moerman & Wuyang Zhao, 2025. "Exposure to superstar firms and financial distress," Review of Accounting Studies, Springer, vol. 30(2), pages 1355-1396, June.
  • Handle: RePEc:spr:reaccs:v:30:y:2025:i:2:d:10.1007_s11142-024-09857-1
    DOI: 10.1007/s11142-024-09857-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11142-024-09857-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s11142-024-09857-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reaccs:v:30:y:2025:i:2:d:10.1007_s11142-024-09857-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.