Bankruptcy, Team-Specific Human Capital, and Productivity: Evidence from U.S. Inventors

44 Pages Posted: 26 Sep 2017 Last revised: 25 Jan 2018

Ramin Baghai

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); Swedish House of Finance

Rui Silva

London Business School - Department of Finance

Luofu Ye

London Business School

Date Written: January 18, 2018

Abstract

We study the impact of corporate bankruptcies on the productivity and career of inventors in the United States. We find that the quality of patents produced by inventors decreases after bankruptcy; this effect is exacerbated when inventor teams are dissolved during bankruptcy. Furthermore, workers affected by team dissolution are less likely to remain active as inventors. When, instead, inventor teams remain intact and jointly move to a new firm, their post-bankruptcy productivity increases. Consistent with the labor market recognizing the value of team stability, the probability of joint inventor relocation after bankruptcy is positively associated with past collaboration.

Keywords: Team-Specific Human Capital, Innovation, Bankruptcy, Creative Destruction, Inventor Productivity

JEL Classification: J24, J63, G33, O31, O32

Suggested Citation

Baghai, Ramin and Silva, Rui and Ye, Luofu, Bankruptcy, Team-Specific Human Capital, and Productivity: Evidence from U.S. Inventors (January 18, 2018). Swedish House of Finance Research Paper No. 17-19. Available at SSRN: https://ssrn.com/abstract=3042304 or http://dx.doi.org/10.2139/ssrn.3042304

Ramin Baghai (Contact Author)

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Rui Silva

London Business School - Department of Finance ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

Luofu Ye

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

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