Does local gambling culture affect bond yield spread? Evidence from China

Yan Xie, Xin Wang and Kam C. Chan

Applied Economics Letters, 2023, vol. 30, issue 8, 1101-1106

Abstract: We study the effect of gambling culture in the province where a firm is located on its bond yield spread. Our findings suggest that a high gambling culture translates into a high bond yield spread. In addition, the impact is more salient for firms with high operating volatility and increased default risk. Overall, the results are consistent with the notion that when firms are located in high gambling culture provinces, they are riskier, and thus bond investors ask for a high bond yield.

Date: 2023
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DOI: 10.1080/13504851.2022.2036679

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