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Religion, Social Capital, and Business Bankruptcy in the United States, 1921-1932

Bradley Hansen and Mary Hansen

No 2008-15, Working Papers from American University, Department of Economics

Abstract: We consider the value of social capital that derives from membership in a church. American states with larger churchgoing populations had lower business bankruptcy rates from 1921 to 1932, and states in which the churchgoing population was concentrated in few churches had business bankruptcy rates that were lower still. Both voluntary and involuntary bankruptcy were lower in states with higher church membership. The evidence suggests that church membership acted on bankruptcy through a safety net mechanism and not solely through indicating a preference for honoring commitment.

Keywords: business bankruptcy; church membership; social capital (search for similar items in EconPapers)
JEL-codes: K29 N22 N82 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-09
New Economics Papers: this item is included in nep-his, nep-law and nep-soc
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Citations: View citations in EconPapers (3)

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