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Religiosity and corporate risk-taking: evidence from Italy

Author

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  • Richard J. Cebula

    (George Mason University)

  • Fabrizio Rossi

    (University of Cassino and Southern Lazio)

Abstract

This study investigates the impact of local culture, as measured by religiosity, on corporate risk-taking, based on a sample of 155 Italian listed firms, involving 2,382 firm-year observations over the study period 2000–2016. The empirical estimation results suggest a statistically significant negative relationship between corporate risk-taking and religiosity, i.e., greater religiosity reduces corporate risk-taking behavior. Overall, these results are consistent with the empirical literature dealing with other nations on the relationship between corporate decisions and social values (local culture). Finally, the findings are robust to alternative empirical specifications.

Suggested Citation

  • Richard J. Cebula & Fabrizio Rossi, 2021. "Religiosity and corporate risk-taking: evidence from Italy," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(4), pages 751-763, October.
    • Handle: RePEc:spr:jecfin:v:45:y:2021:i:4:d:10.1007_s12197-021-09543-x
    DOI: 10.1007/s12197-021-09543-x
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    More about this item

    Keywords

    Corporate risk-taking; Social values; Religion; Culture;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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