01576nas a2200169   4500008004100000245010200041210006900143260000900212520092600221653003201147100002201179700001801201700001601219700002001235700001601255856013501271       2017                        eng d00aImpact of Bankruptcy on Rivals: How Tech Overlap and Diversification Affects Value Redistribution0 aImpact of Bankruptcy on Rivals How Tech Overlap and Diversificat  c20173 aPrior research on bankruptcy proposes two potential outcomes for a bankrupt firm’s industry rivals: a contagion effect wherein rivals’ stock prices decline, and a competitive effect wherein rivals benefit from a competitor’s decline. Although empirical evidence substantiates the contagion effect, existing studies do not consistently account for the competitive effect. We develop and test theory explaining how the degree of technology overlap and diversification strategy of competitors influences the severity of the contagion effect and the expected occurrence of the competitive effect among rivals. We find that greater technology overlap among a bankrupt firm and its competitors exacerbates the contagion effect. Furthermore, competitors with higher unrelated diversification are more susceptible to contagion, while competitors with higher related diversification benefit more from a rival’s bankruptcy.10aStrategy & Entrepreneurship1 aArthurs, Jonathan1 aCho, Sam, Yul1 aChoi, Yohan1 aHemmatian, Iman1 aJoshi, Amol  u/biblio/impact-bankruptcy-rivals-how-tech-overlap-and-diversification-affects-value-redistribution