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Teams and Bankruptcy

Author

Listed:
  • Baghai, Ramin P.
  • Silva, Rui C
  • Ye, Luofu

Abstract

We study the impact of corporate bankruptcies on teams and inventor productivity in the United States. We show that bankruptcy reduces team stability. After a bankruptcy, team inventors produce fewer and less impactful patents, and they are more likely to cease patenting. This points to the loss of team-specific human capital as a cost of resource reallocation through bankruptcy. Our findings also suggest that the labor market values teams and their stability. Past collaboration increases the probability of inventors jointly moving to a new firm after bankruptcy, and the productivity of inventors that relocate together with their team increases.

Suggested Citation

  • Baghai, Ramin P. & Silva, Rui C & Ye, Luofu, 2018. "Teams and Bankruptcy," CEPR Discussion Papers 13198, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13198
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    Keywords

    bankruptcy; creative destruction; Innovation; labor productivity; Team-specific human capital; Teams; Teamwork;

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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