Volume 29 Number 3, 2024

Local Religion and Insider Trading

Mehmet E. Akbulut, Erdem Ucar
California State University Fullerton, College of Business and Economics. SGMH-5189, 800 N. State College Blvd., Fullerton, CA 92831
makbulut@fullerton.edu
erucar@fullerton.edu
 

ABSTRACT

We examine the effect of local religiosity on managers’ financial decisions using insider trading. Managers in more religious counties sell less than those in less religious counties and are granted fewer options. We use the link between higher religiosity and higher levels of risk aversion to explain the results. Managers in more religious counties make fewer unprecedented big sales transactions, which are likely to be made to fund spending on big-ticket items. Firms in more religious counties make fewer option grants in order not to increase their managers’ risk appetite, and those managers sell less as a result.

JEL Classification: G14, G19

Keywords: insider trading, local religion, risk aversion

Cite this article: 

Akbulut, M.E., Ucar, E., 2024, Local Religion and Insider Trading, International Journal of Business, 29(3), 004. https://doi.org/10.55802/IJB.029(3).004