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Does religious culture matter for corporate risk-taking? Evidence from China

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  • Yaoqin Li
  • Xixiong Xu

Abstract

This study investigates the impact of religious culture on corporate risk-taking. Motivated by several considerations including risk aversion trait, we predict a negative relation between religion and corporate risk-taking and support it with Chinese data. We also find that this negative relation is strengthened by female executives while weakened by higher managerial incentives. Further analysis shows that R&D expenditures and cash flow volatility are underlying channels for religion to influence corporate risk-taking. In addition, we find that religious culture improves firms’ investment quality. These findings add to literature by uncovering that risk aversion trait of religion is an important determinant of corporate risk-taking in China.

Suggested Citation

  • Yaoqin Li & Xixiong Xu, 2020. "Does religious culture matter for corporate risk-taking? Evidence from China," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 27(5), pages 511-530, September.
    • Handle: RePEc:taf:raaexx:v:27:y:2020:i:5:p:511-530
    DOI: 10.1080/16081625.2019.1566869
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    Cited by:

    1. Xu, Weidong & Gao, Xin & Xu, Hao & Li, Donghui, 2022. "Does global climate risk encourage companies to take more risks?," Research in International Business and Finance, Elsevier, vol. 61(C).
    2. Singh, Gurmeet & Sharma, Shavneet & Sharma, Rashmini & Dwivedi, Yogesh K, 2021. "Investigating environmental sustainability in small family-owned businesses: Integration of religiosity, ethical judgment, and theory of planned behavior," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    3. Murat Ocak & Bekir Emre Kurtulmuş & Emrah Arıoğlu, 2024. "Do Individual Auditors from More Religious Hometowns Enhance Audit Quality? Evidence from an Islamic Country," Journal of Business Ethics, Springer, vol. 190(2), pages 439-481, March.
    4. Suhan, Aurelia & Aprillia, Ariesya, 2023. "The Impact of Spiritual Marketing on Consumer Loyalty," OSF Preprints w6gpr, Center for Open Science.

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