Journal article
Do Religious Norms Influence Corporate Debt Financing?
Journal of business ethics, v 157(1), pp 159-182
01 Jun 2019
Abstract
Previous studies substantiate that religious social norms influence individual and organizational decisions. Using debt financing settings, we examine whether a firm's religious environment influences outside parties' perceptions in contracting with the firm. We document that firms located in the more religious areas use less debt financing and receive better credit ratings. Bond investors require lower yields and impose fewer covenants on such firms. Using the 2002 revelation of sex abuse by Catholic priests as an exogenous shock, we verify that these findings are not driven by endogeneity issues. Our study highlights the role of social norms in financial transactions.
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Details
- Title
- Do Religious Norms Influence Corporate Debt Financing?
- Creators
- Jay Cai - Drexel UniversityGuifeng Shi - Shanghai Jiao Tong University
- Publication Details
- Journal of business ethics, v 157(1), pp 159-182
- Publisher
- Springer Nature
- Number of pages
- 24
- Grant note
- China Scholarship Council 13PJC078 / Shanghai Pujiang Program NSFC-71002036 / National Nature Science Foundation of China; National Natural Science Foundation of China (NSFC)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000469394900010
- Scopus ID
- 2-s2.0-85030322936
- Other Identifier
- 991020534931404721
InCites Highlights
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business
- Ethics