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Religiosity and corporate cash holdings: International evidence

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  • Chen, Xingyu
  • Chen, Zhengyifan
  • Li, Yingqi
  • Zheng, Steven Xiaofan

Abstract

In this paper we examine whether and how country-level religiosity affects corporate cash holdings. Using 356,435 firm-year observations from 43 countries over the period 1996–2020, we construct three proxies that capture distinct dimensions of religiosity: Religious Person (knowing), Religious Importance (feeling), and Religious Service (doing). We find that Religious Person is robustly and negatively associated with corporate cash holdings, and that this effect is stronger for firms facing higher information asymmetry. The evidence suggests that firms located in less religious countries experience greater financial frictions and therefore maintain larger precautionary cash buffers.

Suggested Citation

  • Chen, Xingyu & Chen, Zhengyifan & Li, Yingqi & Zheng, Steven Xiaofan, 2026. "Religiosity and corporate cash holdings: International evidence," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326000978
    DOI: 10.1016/j.frl.2026.109566
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