Religiosity and Cross-Country Differences in Trade Credit Use
Accounting and Finance (Forthcoming)
43 Pages Posted: 18 Jun 2018
Date Written: June 3, 2018
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: Suggested Citation