Teams and Bankruptcy
51 Pages Posted: 26 Sep 2017 Last revised: 19 Sep 2018
Date Written: September 18, 2018
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: Teams, Teamwork, Team-specific human capital, Bankruptcy, Labor productivity, Creative destruction, Innovation
JEL Classification: J24, J63, G33, O31, O32
Suggested Citation: Suggested Citation