slide1
Download
Skip this Video
Download Presentation
Local Gambling Preferences and Corporate Innovative Success Yangyang Chen, Monash University

Loading in 2 Seconds...

play fullscreen
1 / 28

Local Gambling Preferences and Corporate Innovative Success Yangyang Chen, Monash University - PowerPoint PPT Presentation


  • 144 Views
  • Uploaded on

Local Gambling Preferences and Corporate Innovative Success Yangyang Chen, Monash University Edward J. Podolski , La Trobe University S . Ghon Rhee, University of Hawai’i Madhu Veeraraghavan , TA PAI Management Institute. This paper is about…. St. Peter’s Basilica. Steve Jobs

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Local Gambling Preferences and Corporate Innovative Success Yangyang Chen, Monash University' - emmly


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1
Local Gambling Preferences and

Corporate Innovative Success

Yangyang Chen, Monash University

Edward J. Podolski, La Trobe University

S. Ghon Rhee, University of Hawai’i

Madhu Veeraraghavan , TA PAI Management Institute

this paper is about
This paper is about….

St. Peter’s Basilica

Steve Jobs

Apple Inc.

characteristics of corporate innovations
Characteristics of Corporate Innovations
  • Large Payoff
  • High Probability of Failure
top and bottom five states for r d expenditure
Top and Bottom Five States for R&D Expenditure

Top Five

New Mexico

Massachusetts

Maryland

Washington

Connecticut

Bottom Five

Wyoming

Louisiana

Nevada

Arkansas

Oklahoma

characteristics of gambling attitude
Characteristics of Gambling Attitude
  • Overstating Small Probability of Success
  • Understating High Probability of Failure

In Contrast,

Characteristics of Corporate Innovation

  • Large Payoff
  • High Probability of Failure
our intuition is
Our Intuition is….

Corporations

  • Not detached from local environment
  • Take risk on innovation if local residents are prone to gambling
are catholics more risk taking than protestants
Are Catholics more risk-taking than Protestants?

“The Higher the Catholics-to-Protestants (CP) Ratio, the Higher Gambling Attitude”

  • Kumar, Page, and Spalt (2011, JFE)
  • Stocks with lottery features
  • IPO underpricing
  • Shu, Sulaeman, and Yeung (2012, MS)
  • MFs: Higher return volatilities & Higher Turnover
cp ratio across the united states
CP Ratio Across the United States

Source: Kumar, Page, and Spalt (JFE, 2011)

major findings
Major Findings
  • Firms in high CP ratio region spend more on innovation and attain higher innovative output
  • Social gambling and/or Religion: More important drivers of innovative activities than CEO overconfidence
  • Impact of CEO overconfidence on Innovative industries …..Conditioned on Gambling Preferences or Religion
data and study period
Data and Study Period

DATA Sources

  • NBER Patent Database: 2006 Patent and Citation Data
  • American Religious Data Archives:

Religious adherence at county level

  • Compustat: Firm-Level Accounting information
  • CRSP: Stocks returns
  • S&P Execucomp Database: CEOs and compensation
  • I/B/E/S (Institutional Brokers’ Estimate System): Analysts coverage
  • Forbes: State economic and regulatory variables
  • US Census Bureau: County Demographic Data

Study Period: January 1980-December 2006

Final Sample: 34,097 firm-year observations

social gambling preferences and corporate risk taking i
Social Gambling Preferences and Corporate Risk-Taking (I)

Firms located in areas where gambling is more socially accepted undertake more risky projects

Corporate Risk = f(CP Ratio and Controls)

Where,

Corporate Risk measured by

  • Return Volatility = Std Dev of Daily Returns over the fiscal year
  • Profit Volatility = Std Dev of firm profitability over subsequent 20 quarters
slide28
Thank You for

Your Attention

ad