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Year-End Rush and Career Tournament: Theory and Evidence from Chinese Patent Applications

Author

Listed:
  • Chen, Kong-Pin
  • Dai, Xiaoyong
  • Li, Kai
  • Lin, Pingxin

Abstract

This paper proposes a tournament theory to explain the year-end rush phenomenon—the pervasive surge in organizational activities or investments at period-ends. In a multi-period tournament with observable interim performance, lagging contestants exert disproportionately high effort in later periods to catch up. Because the final period is not subject to future catching-up, the marginal return to effort peaks at the end, generating an effort surge. The model predicts a monotonically increasing relationship between a contestant's interim performance rank and the extent of his year-end rush. We test these predictions using data on patent applications across Chinese cities, where official promotion is well-known to follow tournament-style competition. Our results show: (i) a robust year-end patent application surge, and (ii) a monotonic relationship between a city’s rush intensity and its interim performance rank within its province. While China’s patent growth target policy has been criticized for exacerbating year-end rushes and reducing patent quality, we demonstrate that the underlying driver is the bureaucratic tournament; growth targets merely exacerbate it. Additional evidence highlights the role of patent agencies in facilitating patent rush.

Suggested Citation

  • Chen, Kong-Pin & Dai, Xiaoyong & Li, Kai & Lin, Pingxin, 2025. "Year-End Rush and Career Tournament: Theory and Evidence from Chinese Patent Applications," MPRA Paper 124898, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:124898
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    More about this item

    Keywords

    year-end rush; fourth-quarter effect; multi-stage tournament; interim relative performance; career concern; Chinese economy; Chinese patent policy;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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