Does religiosity matter for corporate labor investment decisions?

Author First name, Last name, Institution

Mehdi Khedmati, Monash Business School
Mohammed Aminu Sualihu, Zayed University
Alfred Yawson, Adelaide Business School

ORCID Identifiers

0000-0001-5163-3068

Document Type

Article

Source of Publication

Journal of Contemporary Accounting and Economics

Publication Date

8-1-2021

Abstract

We examine the effect of county-level religiosity on labor investment decisions. Drawing on the social norm theory, we hypothesize that firms located in religious counties are less likely to engage in inefficient labor investment decisions. Consistent with this prediction, we find that county-level religiosity reduces inefficient labor investment. Using the exogenous shock of the 2002 revelation of the Catholic Church's sexual abuse scandal, we show a causal relationship between religiosity and inefficient labor investment. We also find that religiosity's impact on inefficient labor investment diminishes for firms that adopt greater corporate social responsibility (CSR) practices. Our findings suggest that religious beliefs matter in managerial labor investment decisions.

DOI Link

10.1016/j.jcae.2021.100264

ISSN

1815-5669

Publisher

Elsevier

Volume

17

Issue

2

Disciplines

Business

Keywords

Corporate governance, CSR, Labor, Religion, Social norm theory

Scopus ID

85109171455

Recommended Citation

Khedmati, Mehdi; Sualihu, Mohammed Aminu; and Yawson, Alfred, "Does religiosity matter for corporate labor investment decisions?" (2021). All Works. 4344.
https://zuscholars.zu.ac.ae/works/4344

Indexed in Scopus

yes

Open Access

no