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Family-firm risk-taking: Does religion matter?

Author

Listed:
  • Jiang, Fuxiu
  • Jiang, Zhan
  • Kim, Kenneth A.
  • Zhang, Min

Abstract

We propose that family firms with religious founders have less risk than other family firms. Using a sample of 4159 family firms in China, we find that firms founded by religious entrepreneurs have lower leverage and less investment in fixed and intangible assets compared to firms founded by nonreligious entrepreneurs. These findings are consistent with our proposition. However, these findings primarily hold for entrepreneurs who adhere to Western religions but not to Eastern religions. As such, our paper makes important contributions to the literature on family-firms and their risk-taking and the literature on the relation between religion and risk aversion.

Suggested Citation

  • Jiang, Fuxiu & Jiang, Zhan & Kim, Kenneth A. & Zhang, Min, 2015. "Family-firm risk-taking: Does religion matter?," Journal of Corporate Finance, Elsevier, vol. 33(C), pages 260-278.
  • Handle: RePEc:eee:corfin:v:33:y:2015:i:c:p:260-278
    DOI: 10.1016/j.jcorpfin.2015.01.007
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    More about this item

    Keywords

    Religion; Family firms; Founder; Entrepreneur; Risk-taking; China;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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