Teams and bankruptcy
Subject
Finance
Publishing details
CEPR Discussion Paper
Authors / Editors
Baghai R; Silva R; Ye L
Publication Year
2018
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.
Keywords
Bankruptcy; Creative destruction; Innovation; Labor productivity; Team-specific human capital; Teams; Teamwork
Series Number
DP13198
Series
CEPR Discussion Paper