IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v90y2023ics1057521923004398.html
   My bibliography  Save this article

Religion and the financing of corporate investment around the world

Author

Listed:
  • Mertzanis, Charilaos
  • Pavlopoulos, Athanasios
  • Vetsikas, Apostolos
  • Reppas, Dimitrios
  • Hamill, Philip A.

Abstract

Religion stands as a significant social institution, impacting corporate decisions both directly through the values and traits of individuals and indirectly by shaping the broader business environment. This study employs two complementary measures of religious impact, religiosity and religious diversity, to investigate how religion affects the financing of both short-term working capital and long-term fixed capital investments across 139 developing countries from 2006 to 2019. The findings reveal that both measures of religious impact wield a positive influence on corporate investment financing. Additional analysis uncovers a non-linear correlation that varies based on factors such as the dominant religion within a country, the size of the firm, and the industry it operates in. Furthermore, this relationship is contingent upon the nature of the financing, whether for fixed or working capital. Notably, the effect of religion on working capital financing is more pronounced in low-income countries, while its impact on fixed capital financing is influenced by factors like the sample size, estimation model, and controlling variables. Macroeconomic, institutional, and social conditions play a role in tempering the influence of religion. Grasping the nuances of religious impact and catering to religious preferences holds substantial significance for shaping eco-friendly financial policies that could play a pivotal role in boosting the supply of much-needed sustainable finance on a global scale.

Suggested Citation

  • Mertzanis, Charilaos & Pavlopoulos, Athanasios & Vetsikas, Apostolos & Reppas, Dimitrios & Hamill, Philip A., 2023. "Religion and the financing of corporate investment around the world," International Review of Financial Analysis, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:finana:v:90:y:2023:i:c:s1057521923004398
    DOI: 10.1016/j.irfa.2023.102923
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521923004398
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2023.102923?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Religiosity; Religious diversity; Corporate investment; Institutions; Developing countries;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finana:v:90:y:2023:i:c:s1057521923004398. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.