Does religion matter to informal finance? Evidence from trade credit in China

  title={Does religion matter to informal finance? Evidence from trade credit in China},
  author={Chunfang Cao and K. Chan and W. Hou and Fansheng Jia},
  journal={Regional Studies},
  pages={1410 - 1420}
  • Chunfang Cao, K. Chan, +1 author Fansheng Jia
  • Published 2019
  • Economics
  • Regional Studies
  • ABSTRACT Informal finance plays an important role in transitional economies with weak legal institutions, such as China. As a major informal finance instrument, trade credit relies on informal institutions and enforcement. The paper argues that religion enhances the ethical climate in which firms do business, and it predicts that religiosity increases trade credit, in that religion enhances enforcement by increasing non-pecuniary cost and reducing risk-taking. The results based on Chinese non… CONTINUE READING
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