{"title":"From Risk to Reach: Gambling Culture and Corporate Strategic Expansions","authors":"Huy Viet Hoang","doi":"10.1002/mde.70113","DOIUrl":null,"url":null,"abstract":"<div>\n \n <p>This study investigates the effect of local gambling culture, an informal institution commonly associated with risk-seeking behavior, on US firms' scope expansion decisions during the 2004–2021 period. Contrary to prevailing evidence that gambling-prone environments foster speculative corporate behavior, I find that firms headquartered in gambling-prone states engage more actively in related scope expansions primarily for diversification rather than speculation. The diversification purpose is manifested via lower earnings volatility, reduced financial constraints, improved stock performance, and the concentrated effect among cyclical industries. Cross-sectional tests further show that this effect is more pronounced among firms with greater female representation on boards and those are characterized by strong commitments to offering superior quality to customers and high integrity. The results of this study offer promising implications for both investors and firms located in areas where the gambling culture is deeply embedded in the social fabric.</p>\n </div>","PeriodicalId":18186,"journal":{"name":"Managerial and Decision Economics","volume":"47 6","pages":"1547-1569"},"PeriodicalIF":2.7000,"publicationDate":"2026-08-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Managerial and Decision Economics","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1002/mde.70113","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2026/5/19 0:00:00","PubModel":"Epub","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This study investigates the effect of local gambling culture, an informal institution commonly associated with risk-seeking behavior, on US firms' scope expansion decisions during the 2004–2021 period. Contrary to prevailing evidence that gambling-prone environments foster speculative corporate behavior, I find that firms headquartered in gambling-prone states engage more actively in related scope expansions primarily for diversification rather than speculation. The diversification purpose is manifested via lower earnings volatility, reduced financial constraints, improved stock performance, and the concentrated effect among cyclical industries. Cross-sectional tests further show that this effect is more pronounced among firms with greater female representation on boards and those are characterized by strong commitments to offering superior quality to customers and high integrity. The results of this study offer promising implications for both investors and firms located in areas where the gambling culture is deeply embedded in the social fabric.
期刊介绍：
Managerial and Decision Economics will publish articles applying economic reasoning to managerial decision-making and management strategy.Management strategy concerns practical decisions that managers face about how to compete, how to succeed, and how to organize to achieve their goals. Economic thinking and analysis provides a critical foundation for strategic decision-making across a variety of dimensions. For example, economic insights may help in determining which activities to outsource and which to perfom internally. They can help unravel questions regarding what drives performance differences among firms and what allows these differences to persist. They can contribute to an appreciation of how industries, organizations, and capabilities evolve.
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