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Religious beliefs, gambling attitudes, and financial market outcomes

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  • Kumar, Alok
  • Page, Jeremy K.
  • Spalt, Oliver G.
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    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Financial Economics.

    Volume (Year): 102 (2011)
    Issue (Month): 3 ()
    Pages: 671-708

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    Handle: RePEc:eee:jfinec:v:102:y:2011:i:3:p:671-708

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    Web page: http://www.elsevier.com/locate/inca/505576

    Related research

    Keywords: Gambling; Religion; Institutional investors; Employee stock option plans; IPOs;

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    References

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    Citations

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    Cited by:
    1. Anja Koebrich Leon & Christian Pfeifer, 2013. "Religious Activity, Risk Taking Preferences, and Financial Behaviour: Empirical Evidence from German Survey Data," Working Paper Series in Economics 269, University of Lüneburg, Institute of Economics.
    2. Curtis R. Price & Roman M. Sheremeta, 2012. "Endowment Origin, Demographic Effects and Individual Preferences in Contests," Working Papers 12-07, Chapman University, Economic Science Institute.
    3. Baele, L. & Farooq, M. & Ongena, S., 2012. "Of Religion and Redemption: Evidence from Default on Islamic Loans (Replaces CentER DP 2010-136)," Discussion Paper 2012-014, Tilburg University, Center for Economic Research.
    4. Gheyssens, Jonathan & Gunther, Isabel, 2012. "Risk experiments in gains and losses: A case study for Benin," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    5. Salaber, Julie, 2013. "Religion and returns in Europe," European Journal of Political Economy, Elsevier, vol. 32(C), pages 149-160.
    6. S. Capacci & E. Randon & A. E. Scorcu, 2014. "Luck vs Skill in Gambling over the Recession. Evidence from Italy," Working Papers wp918, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. Daniel J. Benjamin & James J. Choi & Geoffrey W. Fisher, 2010. "Religious Identity and Economic Behavior," NBER Working Papers 15925, National Bureau of Economic Research, Inc.
    8. Audretsch, David B. & Bönte, Werner & Tamvada, Jagannadha Pawan, 2013. "Religion, social class, and entrepreneurial choice," Journal of Business Venturing, Elsevier, vol. 28(6), pages 774-789.

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