Publication: Exploring the causal effect of religious piety on dividend policy: evidence from historical religious identification
Issued Date
2019-02-23
Resource Type
ISSN
14664291
13504851
13504851
Other identifier(s)
2-s2.0-85046413784
Rights
Mahidol University
Rights Holder(s)
SCOPUS
Bibliographic Citation
Applied Economics Letters. Vol.26, No.4 (2019), 306-310
Suggested Citation
Pandej Chintrakarn, Pattanaporn Chatjuthamard, Pornsit Jiraporn, Young S. Kim Exploring the causal effect of religious piety on dividend policy: evidence from historical religious identification. Applied Economics Letters. Vol.26, No.4 (2019), 306-310. doi:10.1080/13504851.2018.1467550 Retrieved from: https://repository.li.mahidol.ac.th/handle/123456789/50778
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Title
Exploring the causal effect of religious piety on dividend policy: evidence from historical religious identification
Abstract
© 2018, © 2018 Informa UK Limited, trading as Taylor & Francis Group. Theory suggests that religious piety is associated with greater risk aversion and more conservative financial policies. Returns to shareholders through dividends are much more certain than returns through capital gains expected to be realized far into the future. We hypothesize that religious piety leads to a higher likelihood of dividend payments. We exploit the variation in religious piety across the US counties and estimate the effect of religion on dividend policy. To draw a causal inference, we use historical religious piety in 1971 as the instrument. Our two-stage least squares results confirm that religious piety induces firms to pay larger dividends.