Religion and returns in Europe

Salaber, Julie 2013. Religion and returns in Europe. European Journal of Political Economy. 32, p. 149–160. doi:10.1016/j.ejpoleco.2013.07.002

TitleReligion and returns in Europe
AuthorsSalaber, Julie
Abstract

Drawing on social identity and social impact theory, this paper is the first to investigate the impact of religious preferences on share prices and expected returns at the country level. Using data from 12 European countries, our findings suggest that religion has a significant effect on the share price of companies whose activities are considered unethical, i.e., tobacco manufacturers and alcohol producers. The share price of these companies (called sin stocks) is depressed when they are located in a predominantly Protestant environment (relative to a Catholic environment). With investors in Protestant countries being more sin averse than in Catholic countries, they insist upon higher expected returns on sin stocks. Conversely, religious preferences do not have the same impact on the performance of other companies, e.g. socially responsible companies. Our results are robust to various methodologies and controlling for several firm-specific, industry-specific and country-specific characteristics.

KeywordsFinancial performance; Religious preferences; Sin stock premium; Social identity; Social responsibility
JournalEuropean Journal of Political Economy
Journal citation32, p. 149–160
ISSN0176-2680
Year2013
PublisherElsevier
Accepted author manuscriptEJPE_open.pdf
Digital Object Identifier (DOI)doi:10.1016/j.ejpoleco.2013.07.002
Publication dates
Published25 Jul 2013
PublishedDec 2013

Related outputs

The Effects of Mergers and Acquisitions on Acquiring Banks’ Contribution to Systemic Risk
van Dellen, S., Benamraoui, A., Ngo, H. and Salaber, Julie 2019. The Effects of Mergers and Acquisitions on Acquiring Banks’ Contribution to Systemic Risk. 27th Edition of International Rome Conference on Money, Banking & Finance. Rome, Italy 10 - 11 Dec 2018

The effects of mergers and acquisitions on acquiring banks' contribution to systemic risk
Van Dellen, S., Benamraoui, A., Ngo, H. and Salaber, Julie 2018. The effects of mergers and acquisitions on acquiring banks' contribution to systemic risk. 11th Edition of International Risk Management Conference (Risk Society). Paris, France 07 - 08 Jun 2018

Cross-border arbitrage and acquirers’ returns in the Eurozone crisis
Salaber, Julie and Rao-Nicholson, Rekha 2018. Cross-border arbitrage and acquirers’ returns in the Eurozone crisis. Journal of Economics and Business. 95, pp. 87-102. doi:10.1016/j.jeconbus.2017.05.001

The recent development and performance of ethical investments
Gillet, Philippe and Salaber-Ayton, Julie 2017. The recent development and performance of ethical investments. in: Lehner, O. (ed.) Routledge Handbook of Social and Sustainable Finance Routledge. pp. 530

Euphoria in financial markets: how Indian companies generate value in their cross-border acquisitions
Rao-Nicholson, Rekha and Salaber, Julie 2016. Euphoria in financial markets: how Indian companies generate value in their cross-border acquisitions. Research in International Business and Finance. 38, pp. 494-508. doi:10.1016/j.ribaf.2016.07.022

Long-term performance of mergers and acquisitions in ASEAN countries
Salaber, Julie, Rao-Nicholson, Rekha and Cao, Tuan H. 2016. Long-term performance of mergers and acquisitions in ASEAN countries. Research in International Business and Finance. 36, p. 373–387. doi:10.1016/j.ribaf.2015.09.024

Impact of the financial crisis on cross-border mergers and acquisitions and concentration in the global banking industry
Salaber, Julie and Rao-Nicholson, Rekha 2016. Impact of the financial crisis on cross-border mergers and acquisitions and concentration in the global banking industry. Thunderbird International Business Review. 58 (2), pp. 161-173. doi:10.1002/tie.21731

Consumer confidence indices and stock markets’ meltdowns
Ferrer, Elena, Salaber, Julie and Zalewska, Ania 2016. Consumer confidence indices and stock markets’ meltdowns. European Journal of Finance. 22 (3), pp. 195-220. doi:10.1080/1351847X.2014.963634

Impact of the financial crisis on banking acquisitions: a look at shareholder wealth
Rao-Nicholson, Rekha and Salaber, Julie 2015. Impact of the financial crisis on banking acquisitions: a look at shareholder wealth. International Journal of the Economics of Business . 22 (1), pp. 87-117. doi:10.1080/13571516.2014.982901

Impact of the Financial Crisis on the Performance of European Acquisitions
Rao Nicholson, Rekha and Salaber, Julie 2014. Impact of the Financial Crisis on the Performance of European Acquisitions. in: Temouri, Yama and Jones, Chris (ed.) International Business and Institutions after the Financial Crisis Palgrave Macmillan. pp. 73-92

Facilitating student engagement and collaboration in a large postgraduate course using wiki-based activities
Salaber, Julie 2014. Facilitating student engagement and collaboration in a large postgraduate course using wiki-based activities. The International Journal of Management Education. 12 (2), pp. 115-126. doi:10.1016/j.ijme.2014.03.006

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms
Rao-Nicholson, Rekha and Salaber, Julie 2013. The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms. International Business Review. 22 (6), p. 963–980. doi:10.1016/j.ibusrev.2013.02.003

Permalink - https://westminsterresearch.westminster.ac.uk/item/9vw6q/religion-and-returns-in-europe


Share this
Tweet
Email