Religious Beliefs, Gambling Attitudes, and Financial Market Outcomes

National culture and corporate cash holdings around the world

“…Prior research has shown that religion induced gambling preferences influence the portfolio decisions of institutional investors. Kumar et al (2011) show that religious beliefs impact investors' portfolio choices and stock returns. Shu et al (2012) report that funds located in low-Protestant or highCatholic areas exhibit significantly higher fund return volatilities.…”

Speculative Retail Trading and Asset Prices

“…We collect data on religious adherence using the "Churches and Church Membership" files from the American Religion Data Archive. The ratio of the proportion of Catholics and the proportion of Protestants in a county has been shown to be significantly related to the propensity of its residents to speculate and gamble (Kumar et al (2011)). …”

“…This test is motivated by the prior evidence, which indicates that investors disproportionately hold and trade local stocks and that gambling propensities across different domains are positively correlated. Following Kumar et al (2011), we use the ratio of Catholic and Protestant adherents in a county (CPRATIO) as a proxy for people's propensity to gamble. 8 Using this gambling proxy, we find that the RTP levels are higher in regions with a higher CPRATIO (see columns 3 and 4 of Table 3).…”

“…The Roman Catholic church maintains a tolerant attitude toward moderate levels of gambling and is less disapproving of gambling activities, while a strong moral opposition to gambling and lotteries has been an integral part of the Protestant movement since its inception. Kumar et al (2011) show that the predominant religion of a region could influence local cultural values and norms and thereby affect the financial and economic decisions of individuals located in that region, even if they do not personally adhere to the local faith. 9 We exclude lagged RTP from the specification in column 4 of Table 3 to show that our results are not very sensitive to the choice of the regression specification.…”

Local Gambling Preferences and Corporate Innovative Success

“…Nevertheless, the existing literature does not explain the apparent geographical disparity in innovative activity across the United States, as illustrated in Figure 1, which shows wide variation of research and development (R&D) expenditure per gross domestic product (GDP) at the state level. 1 Motivated by a growing literature on the geographical variation in social gambling attitudes across the United States (Kumar (2009), Kumar et al (2011)), we examine the relation between locally held attitudes toward gambling and innovative activity. Gambling preferences are naturally relevant to innovative activity, with innovation possessing many lottery-like features.…”