Does gambling culture affect firms’ investment efficiency?

Nan Lin, Han Chen, Pengdong Zhang and Weiqian Liu

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This study explores the influence of gambling culture on investment efficiency. Using local lottery sales to measure gambling culture, we find that gambling culture is significantly negatively associated with investment efficiency. The effect is mainly manifested as the over-investment caused by the gambling culture. The paper also implies that state ownership, highly educated management teams, equity incentives, and higher corporate transparency can help mitigate the effect of gambling culture. Moreover, agency cost and risk-taking level play the role of intermediary effect. Our findings are still robust when addressing the endogeneity issue with various methods.

Keywords: Gambling culture; Investment efficiency; Risk-taking; Agency cost (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003713

DOI: 10.1016/j.frl.2022.103148

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