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Faith and Finance: The Role of Religiosity in Shaping Financial Development in US Counties

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  • Adham CHEHAB

    (College of Business, University of La Verne, USA)

  • Jeanny LIU

    (College of Business, University of La Verne, USA)

Abstract

In this paper, we evaluated the determinants of the degree of financial development in US counties. We proxied financial development as the number of new banks and as aggregate banking assets in a US county. Our main research variable was religiosity; our hypothesis was that increases in religiosity adherents in a US county would attract increased financial development. We also used a county’s level of social capital index, degree of education attainment, income per capita, population, population growth rate, and GDP per capita as control variables. Since education attainment was available starting in 2000 and the social capital index was available up to 2014, we limited our sample period to 2000 through 2014. The regression results showed that religiosity, social capital index, education attainment, income per capita, population, and GDP per capita were positive and statistically significant determinants of the number of new banks opened in a US county. At the same time, social capital index, education attainment, income per capita, population growth rate, and GDP per capita were positive and statistically significant determinants of the aggregate banking assets in a US county.

Suggested Citation

  • Adham CHEHAB & Jeanny LIU, 2025. "Faith and Finance: The Role of Religiosity in Shaping Financial Development in US Counties," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 10(2), pages 379-390, June.
    • Handle: RePEc:rom:merase:v:10:y:2025:i:2:p:379-390
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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