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

Kong-Pin Chen, Xiaoyong Dai, Kai Li and Pingxin Lin

MPRA Paper from University Library of Munich, Germany

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.

Keywords: year-end rush; fourth-quarter effect; multi-stage tournament; interim relative performance; career concern; Chinese economy; Chinese patent policy (search for similar items in EconPapers)
JEL-codes: D0 D04 L2 M5 M54 (search for similar items in EconPapers)
Date: 2025-05-30
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