Religious beliefs and local government financing, investment, and cash holding decisions

Yangyang Chen, Zoltan Murgulov, S. Ghon Rhee, Madhu Veeraraghavan

Research output: Journal article publicationJournal articleAcademic researchpeer-review

19 Citations (Scopus)


This paper is the first to examine the association between religious beliefs and the local government financing, investment and cash holding decisions. Using a sample of 15,204 county-year observations for census years between 1992 and 2012, we show that the degree of religiosity is negatively associated with the level of local government debt and investments while it is positively associated with accumulated cash holdings. Our results indicate that local governments in counties with a higher degree of religiosity are more conservatively managed. To validate the main findings we conduct a range of robustness tests and demonstrate that our main results hold.
Original languageEnglish
Pages (from-to)258-271
Number of pages14
JournalJournal of Empirical Finance
Publication statusPublished - 1 Sept 2016


  • Local government cash holdings
  • Local government financing
  • Local government investment
  • Religiosity
  • Risk-taking

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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