Department of Finance and Decision Sciences
Religiosity and cross‐country differences in trade credit use
Using the firm-level data over 1989-2012 from 53 countries, we find religiosity in a country is positively associated with trade credit use by local firms. Specifically, after controlling for firm- and country-level factors as well as industry and year effects, we show that trade credit use is higher in more religious countries. Moreover, both creditor rights and social trust in a country enhance the positive association between religiosity and trade credit use, while the quality of national-level disclosure mitigates the aforementioned positive association. These results are robust to alternative measures of religiosity, alternative sampling requirements, and potential endogeneity concerns.
Religiosity, Trade Credit Use, Cross-Country Differences, Creditor Rights, Social Trust
Source Publication Title
Accounting and Finance
Link to Publisher's Edition
Chen, F., Chen, X., Tan, W., & Zheng, L. (2018). Religiosity and cross‐country differences in trade credit use. Accounting and Finance. https://doi.org/10.1111/acfi.12389