Religiosity and risk taking: Is there a demand-side effect?

Thomas R. Berry-Stölzle and Steven Irlbeck

Journal of Corporate Finance, 2021, vol. 71, issue C

Abstract: Religiosity may impact firm risk taking via its risk averse employees or through risk-sensitive demand. Using detailed financial statements of property-liability insurance companies, we find that both religiosity at firms' headquarters and the religiosity of firms' largest geographic market are negatively related to firm risk taking. For firms with one salient market, the impact of market religiosity is approximately the same order of magnitude as headquarter religiosity. Our evidence suggests that firm risk taking is influenced by customer demand.

Keywords: Religiosity; Religious social norms; Risk taking; Risk-sensitive demand; Market discipline (search for similar items in EconPapers)
JEL-codes: G22 G32 M14 Z12 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:71:y:2021:i:c:s092911992100239x

DOI: 10.1016/j.jcorpfin.2021.102117

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