Abstract
This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 671-708 |
| Number of pages | 38 |
| Journal | Journal of Financial Economics |
| Volume | 102 |
| Issue number | 3 |
| DOIs | |
| State | Published - Dec 2011 |
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Keywords
- Employee stock option plans
- Gambling
- Institutional investors
- IPOs
- Religion
ASJC Scopus subject areas
- Accounting
- Strategy and Management
- Economics and Econometrics
- Finance
Cite this
Religious beliefs, gambling attitudes, and financial market outcomes. / Kumar, Alok; Page, Jeremy K.; Spalt, Oliver G.
In: Journal of Financial Economics, Vol. 102, No. 3, 12.2011, p. 671-708.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Religious beliefs, gambling attitudes, and financial market outcomes
AU - Kumar, Alok
AU - Page, Jeremy K.
AU - Spalt, Oliver G.
PY - 2011/12
Y1 - 2011/12
N2 - This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.
AB - This study investigates whether geographic variation in religion-induced gambling norms affects aggregate market outcomes. We conjecture that gambling propensity would be stronger in regions with higher concentrations of Catholics relative to Protestants. Consistent with our conjecture, we show that in regions with higher Catholic-Protestant ratios, investors exhibit a stronger propensity to hold lottery-type stocks, broad-based employee stock option plans are more popular, the initial day return following an initial public offering is higher, and the magnitude of the negative lottery-stock premium is larger. Collectively, these results indicate that religion-induced gambling attitudes impact investors' portfolio choices, corporate decisions, and stock returns.
KW - Employee stock option plans
KW - Gambling
KW - Institutional investors
KW - IPOs
KW - Religion
UR - http://www.scopus.com/inward/record.url?scp=82455164326&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=82455164326&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2011.07.001
DO - 10.1016/j.jfineco.2011.07.001
M3 - Article
AN - SCOPUS:82455164326
VL - 102
SP - 671
EP - 708
JO - Journal of Financial Economics
JF - Journal of Financial Economics
SN - 0304-405X
IS - 3
ER -