Religiosity and financial distress in U.S. firms

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Abstract
In our paper, we test the global impact of religiosity on firm's durability. Given that religious firms are more ethics and take less risk, they avoid the costs of misconduct, and they benefit from the good reputation and the excellent relationship with their stakeholders. So, we predict that higher degrees of religiosity can reduce the financial distress. According to this prediction, we detect that corporates headquarters situated in more religious U.S. counties are probably less to suffer from financial problems. We also note that this negative relation becomes stronger during the crisis period. We conclude that the lack of religiosity is a significant cause of the financial difficulty.

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