Abstract
We study the impact of corporate bankruptcies on the careerand productivity of inventors in the United States. We findthat the quality of patents produced by inventors decreasespost-bankruptcy; this effect is exacerbated when inventorteams are dissolved during bankruptcy. Furthermore,workers affected by team dissolution are less likely toremain active as inventors. When, instead, inventor teamsremain intact and jointly move to a new firm, their post-bankruptcy productivity increases. Consistent with the labormarket recognizing the value of team stability, theprobability of joint inventor relocation after bankruptcy ispositively associated with past collaboration. Our findingshighlight the important role of team-specific human capitaland team stability for the production of knowledge in theeconomy, and shed light on the microeconomic channelsthrough which the process of “creative destruction”operates.