Bankruptcy, Team-Specific Human Capital, and Productivity: Evidence from U.S. Inventors
44 Pages Posted: 26 Sep 2017 Last revised: 25 Jan 2018
Date Written: January 18, 2018
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
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