Do Local Protestant Values Affect Corporate Cash Holdings?

Huajing Hu (), Yili Lian () and Wencang Zhou ()
Additional contact information
Huajing Hu: Adelphi University
Yili Lian: Pennsylvania State University, Worthington Scranton
Wencang Zhou: Montclair State University

Journal of Business Ethics, 2019, vol. 154, issue 1, No 10, 147-166

Abstract: Abstract This study examines how local Protestant belief, as one type of social norms, affects corporate cash policies. We find that firms located in areas with more Protestants hold less cash reserves. The influence of local Protestant belief on cash holdings is more profound for firms with weak corporate governance and firms with one geographic segment. In addition, we find that the difference in cash deployment is reflected in the difference in firms’ investment and payout policies. Overall, our study shows that local Protestant belief is an important factor in determining corporate cash policies and helps to mitigate the potential free cash flow problem.

Keywords: Cash policy; Corporate cash holdings; Corporate governance; Protestant; Religion (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-017-3462-1 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:154:y:2019:i:1:d:10.1007_s10551-017-3462-1

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-017-3462-1

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().