Religiosity and Cross-Country Differences in Trade Credit Use

Accounting and Finance (Forthcoming)

Kelley School of Business Research Paper No. 18-52

43 Pages Posted: 18 Jun 2018

See all articles by Feng Chen

Feng Chen

University of Toronto - Rotman School of Management

Xiaolin Chen

Jiujiang University

Weiqiang Tan

Hong Kong Baptist University

Lin Zheng

Indiana University - Kelley School of Business

Date Written: June 3, 2018

Abstract

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.

Keywords: Religiosity, Trade Credit Use, Cross-Country Differences, Creditor Rights, Social Trust

JEL Classification: G32, M410, Z12

Suggested Citation

Chen, Feng and Chen, Xiaolin and Tan, Weiqiang and Zheng, Lin, Religiosity and Cross-Country Differences in Trade Credit Use (June 3, 2018). Accounting and Finance (Forthcoming); Kelley School of Business Research Paper No. 18-52. Available at SSRN: https://ssrn.com/abstract=3190180

Feng Chen (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Xiaolin Chen

Jiujiang University ( email )

Lufeng Rd, Xunyang Qu
Jiujiang Shi, Jiangxi Sheng
Jiujiang, Jiangxi 332000
China

Weiqiang Tan

Hong Kong Baptist University ( email )

Dept of FDS, HK Baptist U
Kowloon, AK 99999
Hong Kong

Lin Zheng

Indiana University - Kelley School of Business ( email )

1309 East Tenth Street
Indianapolis, IN 47405-1701
United States

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