Geographic Variation in Religiosity and Its Impact of Dividend Policies

Omar Farooq (), Mukhammadfoik Bakhadirov and Neveen Ahmed
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Omar Farooq: School of Business, ADA University, 61 Ahmadbay Agha-Oglu Street, Baku, AZ1008 Azerbaijan
Mukhammadfoik Bakhadirov: School of Business, ADA University, 61 Ahmadbay Agha-Oglu Street, Baku, AZ1008 Azerbaijan
Neveen Ahmed: American University in Cairo, AUC Avenue Road, New Cairo 11835, Egypt

Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 2020, vol. 16, issue 1, 109-125

Abstract: The main aim of this research is to document the relationship between geographical variations in the religiosity levels and the dividend policies adopted by firms. Using the data provided by the Gallup International, we test our arguments on the firms headquartered in different states of the United States. Our results show that firms headquartered in states with high level of religiosity have higher payout ratios than firms headquartered in states with low level of religiosity. These are results are robust across various proxies of religiosity and dividend policies (decision to pay dividend, decision to increase dividend, and dividend yield). We also show that value of dividend payouts is higher in states with high level of religiosity. We extend prior literature by also documenting the moderating role of religiosity for the value of dividend policy

Keywords: Dividend policy; religiosity; clientele theory; risk aversion (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:usm:journl:aamjaf01601_109-125

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