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The impact of religiosity on corporate loans and maturity structure: evidence from China

The impact of religiosity on corporate loans and maturity structure: evidence from China PurposeThis paper aims to examine the relation between religiosity and formal financing in the context of long- and short-term corporate loans.Design/methodology/approachThis paper uses archival methodology to conduct a multiple regression analysis with the amount of long- and short-term corporate loans as the dependent variable and a measure of religiosity as the key explanatory variable.FindingsThis paper offers four findings. First, when a private firm locates in a high religiosity region, it is more likely to get more corporate loans and the amount of corporate loans is positively correlated with the extent of religiosity. Second, religiosity drives a private firm getting more (less) short-term (long-term) loans. Third, a private firm in a high religiosity region is able to incur lower interest cost associated with more short-term loans. Finally, the results are confined to Buddhism, Taoism and Christianity.Practical implicationsOverall, the findings are consistent with the notion that religiosity shapes the local culture so that individuals, some of them are borrowers and lenders, show the religious traits in the formal lending and borrowing relationship.Originality/valueOverall, findings of this paper are consistent with the notion that religiosity shapes the local culture so that individuals, some of them being borrowers and lenders, show religious traits in the formal lending and borrowing relationship. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Pacific Accounting Review Emerald Publishing

The impact of religiosity on corporate loans and maturity structure: evidence from China

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References (44)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0114-0582
DOI
10.1108/PAR-02-2017-0012
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to examine the relation between religiosity and formal financing in the context of long- and short-term corporate loans.Design/methodology/approachThis paper uses archival methodology to conduct a multiple regression analysis with the amount of long- and short-term corporate loans as the dependent variable and a measure of religiosity as the key explanatory variable.FindingsThis paper offers four findings. First, when a private firm locates in a high religiosity region, it is more likely to get more corporate loans and the amount of corporate loans is positively correlated with the extent of religiosity. Second, religiosity drives a private firm getting more (less) short-term (long-term) loans. Third, a private firm in a high religiosity region is able to incur lower interest cost associated with more short-term loans. Finally, the results are confined to Buddhism, Taoism and Christianity.Practical implicationsOverall, the findings are consistent with the notion that religiosity shapes the local culture so that individuals, some of them are borrowers and lenders, show the religious traits in the formal lending and borrowing relationship.Originality/valueOverall, findings of this paper are consistent with the notion that religiosity shapes the local culture so that individuals, some of them being borrowers and lenders, show religious traits in the formal lending and borrowing relationship.

Journal

Pacific Accounting Review – Emerald Publishing

Published: Aug 7, 2017

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