Teams and Bankruptcy

51 Pages Posted: 26 Sep 2017 Last revised: 19 Sep 2018

See all articles by Ramin Baghai

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

Multiple version iconThere are 2 versions of this paper

Date Written: September 18, 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: Teams, Teamwork, Team-specific human capital, Bankruptcy, Labor productivity, Creative destruction, Innovation

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

Suggested Citation

Baghai, Ramin and Silva, Rui and Ye, Luofu, Teams and Bankruptcy (September 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)

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

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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