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Religiosity and financial distress in U.S. firms

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  • Ines Gharbi
  • Mounira Hamed‐Sidhom
  • Khaled Hussainey
  • Janet Ganouati

Abstract

In our paper, we test the global impact of religiosity on firm's durability. Given that religious firms are more ethics and take less risk, they avoid the costs of misconduct, and they benefit from the good reputation and the excellent relationship with their stakeholders. So, we predict that higher degrees of religiosity can reduce the financial distress. According to this prediction, we detect that corporates headquarters situated in more religious U.S. counties are probably less to suffer from financial problems. We also note that this negative relation becomes stronger during the crisis period. We conclude that the lack of religiosity is a significant cause of the financial difficulty.

Suggested Citation

  • Ines Gharbi & Mounira Hamed‐Sidhom & Khaled Hussainey & Janet Ganouati, 2021. "Religiosity and financial distress in U.S. firms," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3902-3915, July.
    • Handle: RePEc:wly:ijfiec:v:26:y:2021:i:3:p:3902-3915
    DOI: 10.1002/ijfe.1994
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