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

Chen, Kong-Pin and Dai, Xiaoyong and Li, Kai and Lin, Pingxin (2025): Year-End Rush and Career Tournament: Theory and Evidence from Chinese Patent Applications.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: year-end rush, fourth-quarter effect, multi-stage tournament, interim relative performance, career concern, Chinese economy, Chinese patent policy
• Subjects: D - Microeconomics > D0 - General; D - Microeconomics > D0 - General > D04 - Microeconomic Policy: Formulation, Implementation, and Evaluation; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M54 - Labor Management

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