Paul-Olivier Klein

We study whether religious language in financial contracts influences investor behavior and bond pricing. Using a dataset of 814 Islamic bond (sukuk) prospectuses, we identify religious references and measure their effect on issuance yields. We find that religious statements-although legally non-binding-significantly reduce bond yields, and especially for riskier issuers. The effect is nonlinear: excessive referencing results in higher yields, suggesting a penalty for overuse. The impact is amplified when religious cues are likely to better capture investors' attention-e.g., positioned early, varied in form, or rarer words. Our results are robust to issuer fixed effects, endogeneity controls, and alternative religious signaling. These findings reveal a behavioral pricing channel through which religious cues function as non-financial signals in contract design.

Essais sur le financement obligatoire des entreprises: Cette thèse étudie le financement obligataire des entreprises. Les résultats soulignent le rôle de l’environnement légal et de la gouvernance. Le premier chapitre démontre le rôle de la protection et l’information des créanciers sur le marché obligataire. Il identifie un impact non homogène entre les firmes. Le second chapitre analyse l’impact d’une émission obligataire sur la valeur d’une entreprise à l’aide d’une méta-analyse. Il souligne les facteurs expliquant des résultats jusqu’alors divergents dans la littérature. Le troisième chapitre se focalise sur le marché des émissions obligataires des entreprises chinoises et met en exergue le rôle de la propriété étatique et managérial sur la valeur créée par une émission obligataire. Enfin, le quatrième chapitre isole un biais religieux des investisseurs professionnels, et contribue à la littérature comportementale s’intéressant à la valeur de l’entreprise.

What happens when financial contracts contain religious statements? Financial prospectuses and contractual documentation of Islamic bonds often refer to sacred principles in unambiguous terms. We show that the use of religious references in these contracts is priced by investors. In general, religious priming leads to a reduction in the yield paid by issuers. The effect is sizeable and exists after controlling for diverse confounding drivers. It is not limited to debt value but spreads to equity value. It also varies across bond’s risk and primarily benefits less risky issuances. At the same time, priming excessively is sanctioned by investors. Securing investors’ attention early, building on a diverse religious rhetoric, and selecting rare religious words reinforce the effect. Additional tests consistently confirm the robustness of the findings.

This study examines the relationship between family ownership and carbon emissions using a large cross-country dataset comprising 6,610 non-financial companies over the period 2010-2019. We document that family firms display lower carbon emissions, both direct and indirect, when compared to non-family firms, suggesting a higher commitment to environmental protection by family owners. We show that this differential effect started following the 2015 Paris Agreement. Differences in governance structure, familial values, and higher spendings in R&D partly explain our results. Paradoxically, we find that family-owned firms and family CEOs commit less publicly to a reduction in their carbon emissions and have lower ESG scores, although polluting less. This suggests a lower participation in the public display of such an outcome and a lower tendency to greenwashing.

This study investigates the role of religiousness - defined as a multidimensional set of religious beliefs, feelings, knowledge, and practice - on the likelihood for individuals to be entrepreneurs. We construct precise measures of both religiousness and entrepreneurship from the 2017 World Value Survey data for a subset of four countries (Egypt, Iraq, Jordan, and Lebanon). In general, religiousness decreases both entrepreneurship and entrepreneurial spirit. Yet, the impact differs across the intrinsic/extrinsic divide. Individuals who believe more, feel more, and pray more, are less likely to be entrepreneurs; individuals who attend services more often are more likely to be entrepreneurs. Interestingly, the effect is opposite for attitudes: strong beliefs and feelings towards religion lead to a more positive attitude towards entrepreneurship – but it does not translate into an actual behaviour. Fatalism, defined as a set of cosmological beliefs, partly explains our results. We also show that religious minorities are more likely to become entrepreneurs, but if they have developed a set of religious practices, and that women are less likely to become entrepreneurs, even more as they are religious.