From Revolving Doors to Regulatory Capture? Evidence from Patent Examiners

NBER Working Paper No. 24638

Issued in May 2018

NBER Program(s):Industrial Organization, Law and Economics, Productivity, Innovation, and Entrepreneurship



Many regulatory agency employees are hired by the firms they regulate, creating a “revolving door” between government and the private sector. We study these transitions using detailed data from the US Patent and Trademark Office. We find that patent examiners grant significantly more patents to the firms that later hire them and that much of this leniency extends to prospective employers. These effects are strongest in years when firms are actively hiring, and these relationships hold for the intensive margin of intellectual property protection. Ultimately, this leads the agency to issue lower quality patents, which we measure in citations. Together with other supporting evidence, we argue these results are suggestive of regulatory capture.

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Document Object Identifier (DOI): 10.3386/w24638