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The impact is amplified in the high-tech and service sectors, where employees are key assets. In states with enforceable noncompete contracts, the effect is mitigated. Compared to typical entrepreneurs, distress-driven entrepreneurs are high-wage workers who found better firms, as measured by jobs, pay, and survival. Startup jobs compensate for 33% of job losses at the constrained incumbents. Overall, the financial inability of incumbent firms to pursue productive opportunities increases the reallocation of economic activity into new firms.<\/jats:p>\n                  <jats:p>Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.<\/jats:p>","DOI":"10.1093\/rfs\/hhz110","type":"journal-article","created":{"date-parts":[[2019,9,28]],"date-time":"2019-09-28T00:10:46Z","timestamp":1569629446000},"page":"4061-4101","source":"Crossref","is-referenced-by-count":104,"title":["Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship"],"prefix":"10.1093","volume":"33","author":[{"given":"Tania","family":"Babina","sequence":"first","affiliation":[{"name":"Columbia Business School"}],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"286","published-online":{"date-parts":[[2019,11,1]]},"reference":[{"key":"2020103120005409800_B1","doi-asserted-by":"crossref","first-page":"149","DOI":"10.7208\/chicago\/9780226172576.003.0006","volume-title":"Producer dynamics: New evidence from micro data","author":"Abowd,","year":"2009"},{"key":"2020103120005409800_B2","doi-asserted-by":"crossref","first-page":"72","DOI":"10.1086\/298199","article-title":"Union effects on productivity, profits, and growth: Has the long run arrived?\u201d","volume":"7","author":"Addison,","year":"1989","journal-title":"Journal of Labor Economics"},{"key":"2020103120005409800_B3","doi-asserted-by":"crossref","first-page":"636","DOI":"10.1016\/j.jfineco.2015.06.009","article-title":"Debt, labor markets, and the creation and destruction of firms","volume":"118","author":"Almazan,","year":"2015","journal-title":"Journal of Financial Economics"},{"key":"2020103120005409800_B4","doi-asserted-by":"crossref","first-page":"3","DOI":"10.1561\/104.00000001","article-title":"Corporate debt maturity and the real effects of the 2007 credit crisis","volume":"1","author":"Almeida,","year":"2012","journal-title":"Critical Finance Review"},{"key":"2020103120005409800_B5","doi-asserted-by":"crossref","first-page":"1443","DOI":"10.1111\/0022-1082.00062","article-title":"How costly is financial (not economic) distress? 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