Superstition and Risk Taking: Evidence from Zodiac Year Beliefs in China

• 成果类型: Article
• 署名作者: Fisman, Ray; Huang, Wei; Ning, Bo; Pan, Yue; Qiu, Jiaping; Wang, Yongxiang
• 署名单位: Boston University; University of International Business & Economics; Xiamen University; Xiamen University; McMaster University; Shanghai Jiao Tong University; The Chinese University of Hong Kong, Shenzhen
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4594
• 发表日期: 2023
• 页码: 5174-5188
• 关键词: Risk aversion; INNOVATION; mergers & acquisitions; volatility; household finance; Superstition; CHINA; zodiac year

摘要

We show that superstitions-beliefs without scientific grounding-impact the investment and risk-taking of Chinese firms. We focus on widely held beliefs in bad luck during one's zodiac year, which occurs on a 12-year cycle around a person's birth year, to study superstitions and risk taking. We first show a direct correspondence between zodiac year and risk taking via survey data: respondents are two percentage points more likely to favor no-risk investments if queried during their zodiac year. Turning to corporate decision making, we find that return volatility declines in the chairman's zodiac year, suggesting a reduction in risk taking overall. Focusing on specific types of risk taking, investment in R&D and corporate acquisitions both decline during the chairman's zodiac year; returns around acquisition announcements are also lower, suggesting real allocative consequences of zodiac year beliefs.