Pandej ChintrakarnPattanaporn ChatjuthamardPornsit JirapornYoung S. KimChulalongkorn UniversityMahidol UniversityNorthern Kentucky UniversityPennsylvania State University2020-01-272020-01-272019-02-23Applied Economics Letters. Vol.26, No.4 (2019), 306-31014664291135048512-s2.0-85046413784https://repository.li.mahidol.ac.th/handle/123456789/50778© 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.Mahidol UniversityEconomics, Econometrics and FinanceArticleSCOPUS10.1080/13504851.2018.1467550