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Religion: Productive or Unproductive?

Journal of Institutional Economics, Forthcoming

36 Pages Posted: 30 Jan 2013 Last revised: 28 Jul 2013

Travis Wiseman

Mississippi State University - Department of Finance and Economics

Andrew T. Young

Texas Tech University - Rawls College of Business

Date Written: July 2013

Abstract

In this paper we investigate the relationships between informal institutions – proxied for by measures of religiosity – and levels of entrepreneurial activity, both productive and unproductive, using cross-section U.S. state level data. In doing so, we evaluate Baumol’s (1990) conjectures on the role of institutions in determining whether entrepreneurs will channel their efforts towards wealth-generating activities or towards zero- or negative-sum rent-seeking. We distinguish between measures of both the belief (e.g., the frequency of prayer) and belonging (e.g., church attendance) that has been stressed by authors such as Barro and McCleary (2003). We find that several religious variables significantly and negatively correlate with a state’s productive entrepreneurship score. Alternatively, most religious variables in our data do not correlate significantly with unproductive entrepreneurship. We also find that the percent of individuals reporting as atheist/agnostic is positively associated with productive entrepreneurship.

Keywords: productive entrepreneurship, unproductive entrepreneurship, rent-seeking, religion, U.S. states

JEL Classification: L26, O10, O18, O51, R11, Z12

Suggested Citation

Wiseman, Travis and Young, Andrew T., Religion: Productive or Unproductive? (July 2013). Journal of Institutional Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2208711 or http://dx.doi.org/10.2139/ssrn.2208711

Travis Wiseman (Contact Author)

Mississippi State University - Department of Finance and Economics ( email )

Mississippi State, MS 39762
United States

Andrew T. Young

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States

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