Do Progressive Social Norms Affect Economic Outcomes? Evidence from Corporate Takeovers

52 Pages Posted: 11 Jan 2017

See all articles by Yangyang Chen

Yangyang Chen

Hong Kong Polytechnic University - Faculty of Business

Edward Podolski

Deakin University; Financial Research Network (FIRN)

S. Ghon Rhee

University of Hawaii - Shidler College of Business; University of Hawaii - Department of Financial Economics and Institutions

Madhu Veeraraghavan

T.A. PAI Management Institute, Finance Area

Date Written: January 9, 2017

Abstract

This paper investigates how religion-induced attitudes toward change and diversity affect corporate acquisition decisions. By studying the variation in religious adherence across U.S. counties, we find that acquirer announcement returns and total synergy are larger in counties in which progressive religious denominations are popular. In contrast, conservative religious denominations affect neither acquirer announcement returns nor total synergies. Our evidence indicates that religion-induced social norms are an important driver of large corporate transactions, while various religious denominations affect corporate outcomes differently.

Keywords: Religion, Corporate takeovers, Mainline Protestants, Behavioral finance

JEL Classification: G34, Z1, G32

Suggested Citation

Chen, Yangyang and Podolski, Edward and Rhee, S. Ghon and Veeraraghavan, Madhu, Do Progressive Social Norms Affect Economic Outcomes? Evidence from Corporate Takeovers (January 9, 2017). Journal of Empirical Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2896492

Yangyang Chen (Contact Author)

Hong Kong Polytechnic University - Faculty of Business ( email )

9/F, Li Ka Shing Tower
The Hong Kong Polytechnic University
Hong Kong, Hung Hom, Kowloon M923
China

Edward Podolski

Deakin University ( email )

221 Burwood Highway
Burwood, Victoria 3125
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

S. Ghon Rhee

University of Hawaii - Shidler College of Business ( email )

2404 Maile Way
C-304, FEI/CBA
Honolulu, HI 96822
United States

University of Hawaii - Department of Financial Economics and Institutions ( email )

United States

Madhu Veeraraghavan

T.A. PAI Management Institute, Finance Area ( email )

Bangalore
Manipal, Karnataka 576104
India
+91-820-2701030 (Phone)

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