Religion and Ownership
63 Pages Posted: 12 Jul 2019 Last revised: 30 Apr 2021
Date Written: March 27, 2020
This study examines if geographical variation in the dominant religion of a firm’s location is associated with its ownership structures. We contrast two Christian faiths, Protestantism and Catholicism, which—despite theological similarities—have been associated with contrasting preferences for autonomy and reliance on trust. We address identification challenges by combining evidence from panel regressions, geographical regression discontinuity design, and instrumental variable estimation. We find that the local strength of Protestantism reduces ownership concentration. A subsequent analysis suggests that the local strength of Protestantism directly affects blockholder ownership, whereas the effect on shareholding size and insider ownership is indirect through trust.
Keywords: Protestantism, hierarchy, ownership concentration, family ownership, trust
JEL Classification: G32, N3
Suggested Citation: Suggested Citation