Teams and Bankruptcy

69 Pages Posted: 4 Sep 2019 Last revised: 28 Feb 2024

See all articles by Ramin Baghai

Ramin Baghai

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swedish House of Finance

Rui Silva

Nova School of Business and Economics; Centre for Economic Policy Research (CEPR)

Luofu Ye

London Business School

Multiple version iconThere are 2 versions of this paper

Date Written: July 18, 2019

Abstract

We study how the human capital embedded in teams is affected by, and reallocated through, corporate bankruptcies. After a bankruptcy, U.S. inventors produce fewer and less impactful patents. Moreover, teams become less stable. Consequently, compared to inventors that rely less on teamwork, the performance of team inventors deteriorates more. These findings point to the loss of team-specific human capital as a cost of resource reallocation through bankruptcy. Acquisitions by industrial firms and joint mobility of inventors with past collaborations limit these losses, suggesting that the labor market and the market for corporate control help preserve team-specific human capital in bankruptcies.

Keywords: Teams, Teamwork, Team-specific human capital, Bankruptcy, Labor productivity, Innovation

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

Suggested Citation

Baghai, Ramin and Silva, Rui and Ye, Luofu, Teams and Bankruptcy (July 18, 2019). Swedish House of Finance Research Paper No. 17-19, European Corporate Governance Institute - Finance Working Paper No. 626/2019, LawFin Working Paper No. 46, Available at SSRN: https://ssrn.com/abstract=3042304 or http://dx.doi.org/10.2139/ssrn.3042304

Ramin Baghai (Contact Author)

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Rui Silva

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Luofu Ye

London Business School ( email )

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

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