New Technology Sectoral Disruptions

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Event details

Date 01.11.2024
Hour 11:4513:00
Speaker Gerard Hoberg - University of Southern California
Location
UniL Campus, Room Extra 126
Category Conferences - Seminars
Event Language English

We construct a novel measure of technology sectoral disruptions (TSDs) using a dynamic text-based spatial model of patents based on the extent to which innovation is suddenly highly correlated across multiple industries. We identify multiple TSDs occurring over a 70-year period of time. Abnormal stock returns and insider trading indicate that TSDs are largely unexpected and generate positive and long-lasting value gains. Impacted small firms initially increase equity issuance, reduce equity payouts, and increase both R&D and asset growth and experience increased valuations consistent with Schumpeter’s 1912 theory of creative destruction. Large firms, on average, reduce R&D and capital expenditures and experience declining valuations and decreased sales growth.