Antigambling interventions and corporate financialization: Evidence from China

This study investigates the impact of local antigambling interventions (AGIs) on corporate financialization. From the perspective of formal institutions' influence on culture, our findings suggest that firms located in regions with more effective AGIs exhibit lower levels of financialization. Mechanism tests show that AGIs reduce local risk preferences, subsequently influencing corporate financialization. Heterogeneity tests reveal that the main results are more pronounced when government trust is stronger, cultural transmission efficiency is higher, local firm interactions are more extensive, and community attention to antigambling initiatives is greater. This study enhances the understanding of the influence of the institutional environment on corporate investment decisions.