Do Local Protestant Values Affect Corporate Cash Holdings?

Huajing Hu, Yili Lian, Wencang Zhou

Research output: Contribution to journalArticlepeer-review

24 Scopus citations


This study examines how local Protestant belief, as one type of social norms, affects corporate cash policies. We find that firms located in areas with more Protestants hold less cash reserves. The influence of local Protestant belief on cash holdings is more profound for firms with weak corporate governance and firms with one geographic segment. In addition, we find that the difference in cash deployment is reflected in the difference in firms’ investment and payout policies. Overall, our study shows that local Protestant belief is an important factor in determining corporate cash policies and helps to mitigate the potential free cash flow problem.

Original languageEnglish (US)
Pages (from-to)147-166
Number of pages20
JournalJournal of Business Ethics
Issue number1
StatePublished - Jan 15 2019

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • General Business, Management and Accounting
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law


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