Policy Optimization or Resource Misallocation? Sports Tourism Development Orientation and Corporate Overinvestment

Does local government promotion of an emerging industry discipline or distort corporate investment? We measure city-level attention to sports tourism from the work reports of Chinese prefecture-level governments and link it to A-share firms over 2006–2024. Firms in cities with stronger sports tourism orientation overinvest less, and the result survives instrumental variable estimation and robustness checks. Policy attention strengthens government–business connections, which raise overinvestment, and improves expected returns, which lower it, though each channel carries a small share of the effect. The effect is concentrated in southern cities and in the upper half of the overinvestment distribution.