Exploring the Causal Effect of Religious Piety on Dividend Policy: Evidence from Historical Religious Identification

15 Pages Posted: 24 Apr 2018

See all articles by Pandej Chintrakarn

Pandej Chintrakarn

Mahidol University International College (MUIC)

Pattanaporn Chatjuthamard

Chulalongkorn University

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Young Sang Kim

Northern Kentucky University - Haile/US Bank College of Business

Date Written: April 4, 2018

Abstract

Theory suggests that religious piety is associated with greater risk aversion and more conservative financial policies. Returns to shareholders through dividends are much more certain than returns through capital gains expected to be realized far into the future. We hypothesize that religious piety leads to a higher likelihood of dividend payments. We exploit the variation in religious piety across the U.S. counties and estimate the effect of religion on dividend policy. To draw a causal inference, we use historical religious piety in 1971 as the instrument. Our 2SLS results confirm that religious piety induces firms to pay larger dividends.

Keywords: dividends, religion, religiosity, payout policy, instrumental variable

JEL Classification: G35, Z12

Suggested Citation

Chintrakarn, Pandej and Chatjuthamard, Pattanaporn and Jiraporn, Pornsit and Kim, Young Sang, Exploring the Causal Effect of Religious Piety on Dividend Policy: Evidence from Historical Religious Identification (April 4, 2018). Available at SSRN: https://ssrn.com/abstract=3156696 or http://dx.doi.org/10.2139/ssrn.3156696

Pandej Chintrakarn

Mahidol University International College (MUIC) ( email )

999 Buddhamonthon 4 Road
Salaya, Nakhonpathom, 73170
Thailand

Pattanaporn Chatjuthamard

Chulalongkorn University

Bangkok 10330
Thailand

Pornsit Jiraporn (Contact Author)

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

Young Sang Kim

Northern Kentucky University - Haile/US Bank College of Business ( email )

Dept of Economics and Finance
Highland Heights, KY 41099
United States
859-572-5160 (Phone)
859-572-6627 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
31
Abstract Views
315
PlumX Metrics