DP18578 Death and Turmoil in R&D Teams
We use a novel method to define the R&D team and use the unexpected death of an R&D worker to study its effect on the organization of R&D teams in profit-making firms. Average treatment effects on exit probability, entry probability, wages of stayers, and characteristics of leavers are null. Hires are slightly younger in treatment than control. Treatment effects do not vary by the size of the R&D team but vary in interesting ways by the characteristics of the deceased and with job market liquidity. Results suggest weak complementarity of personnel and almost perfect substitution of talent in business R&D. Management appears able to quickly adjust the team to the shock.