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Religiosity and cross‐country differences in trade credit use
Author(s) -
Chen Feng,
Chen Xiaolin,
Tan Weiqiang,
Zheng Lin
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12389
Subject(s) - religiosity , endogeneity , creditor , quality (philosophy) , business , demographic economics , association (psychology) , economics , finance , debt , psychology , social psychology , econometrics , philosophy , epistemology , psychotherapist
Using the firm‐level data over 1989–2012 from 53 countries, we find religiosity in a country is positively associated with trade credit use by local firms. Specifically, after controlling for firm‐ and country‐level factors as well as industry and year effects, we show that trade credit use is higher in more religious countries. Moreover, both creditor rights and social trust in a country enhance the positive association between religiosity and trade credit use, while the quality of national‐level disclosure mitigates the aforementioned positive association. These results are robust to alternative measures of religiosity, alternative sampling requirements and potential endogeneity concerns.