Exploring the Effect of Religious Piety on Corporate Governance: Evidence from Anti-takeover Defenses and Historical Religious Identification

Journal of Business Ethics 141 (3):469-476 (2017)

Because religious piety induces individuals to be more honest and risk averse, it makes managers less likely to exploit shareholders, thereby mitigating the agency conflict and potentially influencing governance arrangements. We exploit the variation in religious piety across the U.S. counties and investigate the effect of religious piety on anti-takeover provisions. Our results show that religious piety substitutes for corporate governance in alleviating the agency conflict. Effective governance is less necessary for firm with strong religious piety. As a result, religious piety leads to weaker governance, as indicated by more anti-takeover defenses. We exploit historical religious piety as far back as 1952 as our instrumental variable. Religious piety from the distant past is unlikely correlated with current corporate governance directly, except through contemporaneous religious piety. Our instrumental variable analysis, which is far less vulnerable to endogeneity, corroborates the conclusion.
Keywords No keywords specified (fix it)
Categories (categorize this paper)
DOI 10.1007/s10551-015-2677-2
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

Our Archive

Upload a copy of this paper     Check publisher's policy     Papers currently archived: 41,481
External links

Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library

References found in this work BETA

No references found.

Add more references

Citations of this work BETA

Do Religious Norms Influence Corporate Debt Financing?Jay Cai & Guifeng Shi - 2019 - Journal of Business Ethics 157 (1):159-182.

Add more citations

Similar books and articles

Corporate Governance in South Africa.G. J. Rossouw, A. Van der Watt & D. P. Malan - 2002 - Journal of Business Ethics 37 (3):289 - 302.
Corporate Governance in South Africa.G. J. Rossouw, A. van der Watt & D. P. Malan Rossouw - 2002 - Journal of Business Ethics 37 (3):289 - 302.
Theorising South Africa’s Corporate Governance.Andrew West - 2006 - Journal of Business Ethics 68 (4):433 - 448.
On the Issue of Religious Tolerance in Modern Russia: National Identity and Religion.Dmitry A. Golovushkin - 2004 - Journal for the Study of Religions and Ideologies 3 (7):101-110.
Corporate Governance in Mexico.Bryan W. Husted & Carlos Serrano - 2002 - Journal of Business Ethics 37 (3):337 - 348.
Corporate Governance and its Effect on the Liquidity of a Stock: Evidence From the MENA Region.Omar Farooq & Mohammed Seffar - 2012 - International Journal of Business Governance and Ethics 7 (3):232-251.
Corporate Governance and Trust in Business: A Matter of Balance.G. J. Rossouw - 2005 - African Journal of Business Ethics 1 (1):1.
Religious Conscientious Exemptions.Yossi Nehushtan - 2011 - Law and Philosophy 30 (2):143-166.
Exploring Theoretical Paradigms in Corporate Governance.Clive Smallman - 2004 - International Journal of Business Governance and Ethics 1 (1):78-94.


Added to PP index

Total views
11 ( #662,424 of 2,248,507 )

Recent downloads (6 months)
2 ( #796,127 of 2,248,507 )

How can I increase my downloads?


My notes

Sign in to use this feature