Faith and Finance: The Role of Religiosity in Shaping Financial Development in US Counties

Adham Chehab () and Jeanny Liu ()
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Adham Chehab: College of Business, University of La Verne, USA
Jeanny Liu: College of Business, University of La Verne, USA

Management and Economics Review, 2025, vol. 10, issue 2, 379-390

Abstract: In this paper, we evaluated the determinants of the degree of financial development in US counties. We proxied financial development as the number of new banks and as aggregate banking assets in a US county. Our main research variable was religiosity; our hypothesis was that increases in religiosity adherents in a US county would attract increased financial development. We also used a county’s level of social capital index, degree of education attainment, income per capita, population, population growth rate, and GDP per capita as control variables. Since education attainment was available starting in 2000 and the social capital index was available up to 2014, we limited our sample period to 2000 through 2014. The regression results showed that religiosity, social capital index, education attainment, income per capita, population, and GDP per capita were positive and statistically significant determinants of the number of new banks opened in a US county. At the same time, social capital index, education attainment, income per capita, population growth rate, and GDP per capita were positive and statistically significant determinants of the aggregate banking assets in a US county.

Keywords: Religiosity; social capital; financial development. (search for similar items in EconPapers)
JEL-codes: G21 Z12 (search for similar items in EconPapers)
Date: 2025
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