QoG lunchseminarium med Jan Stuckatz

Abstract: The revolving door – the movement of government officials into private sector roles and vice versa – is a central feature of business–government relations. Yet, prior research has largely focused on high-profile politicians, overlooking both the broader scope of public servants who transition into the private sector and the strategic ways corporations deploy them. We assemble the most comprehensive dataset to date on former U.S. public officials who transition into senior roles in publicly traded firms, examining how firms use these “revolvers” to navigate their political environment. We document three novel empirical facts: (1) revolvers are more prevalent among firms than traditional forms of corporate political activity (CPA); (2) they are employed across firms of all sizes; and (3) executive branch officials are the most frequent revolvers, despite limited prior scholarly attention. We then distinguish between two strategic hiring motives: value creation and value maintenance. We find that judicial and legislative revolvers are hired more in reaction to shocks and are not linked to performance gains, consistent with value maintenance strategies. In contrast, executive branch revolvers are associated with improved firm performance and deeper organizational integration, suggesting a value creation motive. Our results imply that the revolving door is not a niche phenomenon confined to high-profile politicians or highly regulated industries, but a widespread feature of CPA. Moreover, firms do not treat all revolvers as interchangeable; instead, they strategically match revolver types to specific challenges. This study advances CPA theory by linking revolver background to firm strategy and political outcomes.