Journal of Business Ethics

, Volume 154, Issue 1, pp 147–166 | Cite as

Do Local Protestant Values Affect Corporate Cash Holdings?

  • Huajing HuEmail author
  • Yili Lian
  • Wencang Zhou
Original Paper


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.


Cash policy Corporate cash holdings Corporate governance Protestant Religion 


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Copyright information

© Springer Science+Business Media Dordrecht 2017

Authors and Affiliations

  1. 1.Robert B. Willumstad School of BusinessAdelphi UniversityGarden City, New YorkUSA
  2. 2.Pennsylvania State University, Worthington ScrantonDunmoreUSA
  3. 3.School of BusinessMontclair State UniversityMontclairUSA

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