Religiosity and corporate risk-taking: evidence from Italy

Cebula, Richard J.; Rossi, Fabrizio

This study investigates the impact of local culture, as measured by religiosity, on corporate risk-taking, based on a sample of 155 Italian listed firms, involving 2,382 firm-year observations over the study period 2000–2016. The empirical estimation results suggest a statistically significant negative relationship between corporate risk-taking and religiosity, i.e., greater religiosity reduces corporate risk-taking behavior. Overall, these results are consistent with the empirical literature dealing with other nations on the relationship between corporate decisions and social values (local culture). Finally, the findings are robust to alternative empirical specifications.