Working Paper: CEPR ID: DP13198
Authors: Ramin Baghai; Rui Silva; Luofu Ye
Abstract: We study how the human capital embedded in teams is reallocated in corporate bankruptcies using data on US inventors. We find that bankruptcies reduce team stability. After a bankruptcy, team-dependent inventors produce fewer and less impactful patents. This points to the loss of team-specific human capital as a cost of resource reallocation through bankruptcy. However, this cost is limited by the ability of the labor market and the market for corporate control to preserve teams. Inventors with past collaboration are likely to move jointly to a new firm after bankruptcy, and the productivity of team inventors that relocate together increases.
Keywords: teams; teamwork; team-specific human capital; bankruptcy; labor productivity; innovation
JEL Codes: J24; J63; G33; O31; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| disruption in team stability (J63) | loss of team-specific human capital (Z22) |
| loss of team-specific human capital (Z22) | decrease in productivity (O49) |
| team-dependent inventors relocating together (O36) | increase in productivity (O49) |
| bankruptcy (K35) | modest productivity losses for team-dependent inventors (O36) |
| Corporate bankruptcies (G33) | disruption in team stability (J63) |
| Corporate bankruptcies (G33) | reduction in citations for team-dependent inventors (O36) |