TY - JOUR
T1 - Local gambling preferences and corporate innovative success
AU - Chen, Yangyang
AU - Podolski-Boczar, Edward
AU - Rhee, Sangghon
AU - Veeraraghavan, Madhu
PY - 2014
Y1 - 2014
N2 - 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.
AB - 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.
U2 - 10.1017/S0022109014000246
DO - 10.1017/S0022109014000246
M3 - Article
SN - 0022-1090
VL - 49
SP - 77
EP - 106
JO - Journal of Financial and Quantitative Analysis
JF - Journal of Financial and Quantitative Analysis
IS - 1
ER -