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Exposing the Revolving Door in Executive Branch Agencies

Published online by Cambridge University Press:  20 January 2025

Logan P. Emery  and
Mara Faccio
Logan P. Emery
Affiliation:
Erasmus University Rotterdam School of Management
Mara Faccio*
Affiliation:
Purdue University Mitchell E. Daniels, Jr. School of Business
*
[email protected] (corresponding author)
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Abstract

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We develop an extensive mapping of the revolving door phenomenon by examining the work experience of 420,153 individuals in top corporate positions at 12,869 firms. More than half of these firms have at least one such individual with prior experience in one of 187 executive branch agencies. We find that firms are more likely to receive procurement contracts following the appointment of a former regulator transitioning within 2 years of leaving the agency, a result consistent with the “knowledge” hypothesis. Less-complex contracts signed following the appointment of former regulators are more likely to be renegotiated, increasing costs for the government.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , First View , pp. 1 - 31
Creative Commons
Creative Common License - CCCreative Common License - BY
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.
Copyright
© The Author(s), 2025. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

We are grateful to Jarrad Harford (the editor), an anonymous referee, Laura Field, Elisabeth Kempf (discussant), John Matsusaka, Ben McCartney, Deniz Yavuz, and seminar participants at Ball State University, the City University of Hong Kong, La Trobe University, the London School of Economics, the National University of Singapore, the Purdue University Research Center in Economics, the University of Alberta, the University of Delaware, the University of Groningen, the University of Ottawa, Xiamen University, the International Virtual Research Seminar in Finance co-hosted by Aalborg University Business School, the BAFFI CAREFIN Centre (Bocconi University), the Centre for Governance, Regulation and Industrial Strategy (University of Bath), the Grenoble Ecole de Management and Università Sapienza (Rome), the 2021 American Finance Association annual meeting, and the 2021 Finance Conference in Honor of Phelim Boyle (jointly hosted by Wilfrid Laurier University, the University of Waterloo, and the Fields Institute) for valuable comments and suggestions.

Funding: The authors gratefully acknowledge financial support from the “Blake Family Fund for Ethics, Governance and Leadership.”

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