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The effects of superstition on firms' investment behavior: Evidence from Vietnam, an irreligious country✰

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  • Pham, Dai Van

Abstract

This study examines the impact of superstition on corporate decision-making in Vietnam, a highly irreligious country. We focus on the folk belief that the ages of 49–53 are considered calamitous and use a regression discontinuity design to show that companies significantly decrease their investment in fixed assets during these ages of their directors. The effect is more pronounced in smaller firms and is not accompanied by a decrease in employment growth. We introduce a novel two-stage difference method to identify the role of superstition in causing the ‘calamitous ages’ effect.

Suggested Citation

  • Pham, Dai Van, 2024. "The effects of superstition on firms' investment behavior: Evidence from Vietnam, an irreligious country✰," Journal of Comparative Economics, Elsevier, vol. 52(1), pages 1-27.
    • Handle: RePEc:eee:jcecon:v:52:y:2024:i:1:p:1-27
    DOI: 10.1016/j.jce.2023.11.002
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    More about this item

    Keywords

    Superstition; Calamitous ages; Directors’ age; Two-stage difference; Firms’ investment;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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