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Teams and Bankruptcy

Author

Listed:
  • Ramin P Baghai
  • Rui C Silva
  • Luofu Ye

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.

Suggested Citation

  • Ramin P Baghai & Rui C Silva & Luofu Ye, 2024. "Teams and Bankruptcy," The Review of Financial Studies, Society for Financial Studies, vol. 37(9), pages 2855-2902.
    • Handle: RePEc:oup:rfinst:v:37:y:2024:i:9:p:2855-2902.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhae017
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    More about this item

    Keywords

    J24; J63; G33; O31; O32;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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