Local gambling preferences and corporate innovative success

Yangyang Chen; Edward J. Podolski; S. Ghon Rhee; Madhu Veeraraghavan

doi:10.1017/S0022109014000246

Local gambling preferences and corporate innovative success

Yangyang Chen, Edward J. Podolski, S. Ghon Rhee, Madhu Veeraraghavan

Research output: Journal article publication › Journal article › Academic research › peer-review

110 Citations (Scopus)

Abstract

This paper examines the role of local attitudes toward gambling on corporate innovative activity. Using a county's Catholics-to-Protestants ratio as a proxy for local gambling preferences, we find that firms located in gambling-prone areas tend to undertake riskier projects, spend more on innovation, and experience greater innovative output. We contrast the local gambling effect with chief executive officer (CEO) overconfidence, another behavioral effect reported to influence innovation. We find that local gambling preferences are a stronger determinant of innovative activity, with CEO overconfidence being more relevant to innovation in areas where gambling attitudes are strong. Foster School of Business, University of Washington.

Original language	English
Pages (from-to)	77-106
Number of pages	30
Journal	Journal of Financial and Quantitative Analysis
Volume	49
Issue number	1
DOIs	https://doi.org/10.1017/S0022109014000246
Publication status	Published - 1 Jan 2014
Externally published	Yes

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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10.1017/S0022109014000246

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Local gambling preferences and corporate innovative success

Abstract

ASJC Scopus subject areas

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