Exploring the causal effect of religious piety on dividend policy: evidence from historical religious identification

Theory suggests that religious piety is associated with greater risk aversion and more conservative financial policies. Returns to shareholders through dividends are much more certain than returns through capital gains expected to be realized far into the future. We hypothesize that religious piety leads to a higher likelihood of dividend payments. We exploit the variation in religious piety across the US counties and estimate the effect of religion on dividend policy. To draw a causal inference, we use historical religious piety in 1971 as the instrument. Our two-stage least squares results confirm that religious piety induces firms to pay larger dividends.     

Effects of M&As on innovation performance: empirical evidence from Chinese listed manufacturing enterprises

With the acceleration of the economic globalisation process, worldwide market competition is becoming increasingly intense. To remain impregnable in face of fierce competition, Merger and Acquisition (M&A) become the important means to obtain technology, gain core competitiveness, and increase market share. Therefore, studying the effects of M&As on innovation performance has a certain practical significance. With a sample of 96 M&A events of Chinese listed manufacturing enterprises from 2004 to 2011, we find that horizontal M&A and conglomerate M&A can reduce innovation performance, while vertical M&A has no significant effect thereon. Technological M&A has a positive effect on the innovation performance of the acquiring firm, while the effect of non-technological M&A thereon is negative. In technological M&As, entered technological M&A will lower innovation performance, complementary technological M&A can increase innovation performance, while upgraded technological M&A has no significant effect on innovation performance.     

The effect of religious piety on managerial entrenchment: evidence from entrenched boards of directors

Prior research shows that religious piety is linked to honesty and risk-aversion. Religious piety alleviates the agency conflict by lessening the motivation for managers to exploit shareholders. Because of its role in mitigating the agency conflict, we argue that religious piety influences corporate governance arrangements. We exploit the variation in religious piety across U.S. counties and show that religious piety significantly influences the probability that a firm has an entrenched (staggered) board of directors. In particular, firms located in an area with stronger religious piety are significantly less likely to have a staggered board. This negative effect, however, is significant only when the degree of religiosity is higher than a certain threshold. Further analysis reveals that our results are unlikely confounded by endogeneity. Our results are especially interesting as they demonstrate that non-financial attributes, such as religious piety, has a significant influence on one of the most crucial governance mechanisms, i.e. the board of directors.     

The effect of risk-sharing government subsidy on corporate R&D investment: Empirical evidence from Korea

Despite the wide belief that the high social rates of returns to R&D investment justify government subsidy policy in advanced countries, there are only limited studies about whether the R&D subsidy as a means of risk-sharing stimulates R&D investment of small and medium sized enterprises (SMEs) in developing countries. This paper empirically investigates the issue, using a unique data set on government subsidy for new technology development of Korean manufacturing firms, listed and non-listed, for the period from 2000 to 2007. The paper employs the DID estimation procedure and controls for simultaneity of the subsidy for new technology development using 2SLS and two step Tobit procedure. Our empirical results show that there is no solid evidence for crowding-out effects of the government subsidy. These results suggest that government subsidies could help SMEs to overcome the barriers to risky R&D projects through sharing R&D failure risk with government and by reducing capital costs to undertake new technology development projects, and thus the subsidy policy for new technology development seems to be partly successful in promoting the R&D investment of the Korean SMEs.     

The effect of Medicaid expansions for low-income children on Medicaid participation and private insurance coverage: evidence from the SIPP

We examine Medicaid enrollment and private coverage loss following expansions of Medicaid eligibility. We attempt to replicate Cutler and Gruber's [Q. J. Econ. 111 (1996) 391.] results using the Survey of Income and Program Participation (SIPP), and find smaller rates of take-up and little evidence of crowding out. We find that some of the difference in results can be attributed to different samples and recall periods in the data sets used. Extending the previous literature, we find that take-up is slightly increased if a child's siblings are eligible and with time spent eligible. Focusing on children whose eligibility status changes during the sample, we estimate smaller take-up effects. We find little evidence of crowding out in any of our extensions.     

The effect of distance and road quality on food collection, marketing margins, and traders' wages: evidence from the former Zaire

Food price variation is typical of the food economies of many low income countries. The presence or absence of road infrastructure is perceived to be one of the main determinants of this variation. This analysis shows that in the case of the former Zaire, food price dispersion is significant both across products and across regions. It is demonstrated that transportation costs explain most of the differences in food prices between producer regions and that road quality is an important factor in the transportation costs. However, food prices decrease relatively faster than transportation costs increase and traders' wages are higher on bad roads.