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Religiosity and financial distress in U.S. firms
Author(s) -
Gharbi Ines,
HamedSidhom Mounira,
Hussainey Khaled,
Ganouati Janet
Publication year - 2021
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1994
Subject(s) - religiosity , financial distress , reputation , misconduct , financial crisis , distress , economics , relation (database) , accounting , social psychology , financial system , psychology , political science , law , macroeconomics , psychotherapist , database , computer science
In our paper, we test the global impact of religiosity on firm's durability. Given that religious firms are more ethics and take less risk, they avoid the costs of misconduct, and they benefit from the good reputation and the excellent relationship with their stakeholders. So, we predict that higher degrees of religiosity can reduce the financial distress. According to this prediction, we detect that corporates headquarters situated in more religious U.S. counties are probably less to suffer from financial problems. We also note that this negative relation becomes stronger during the crisis period. We conclude that the lack of religiosity is a significant cause of the financial difficulty.