Does religion matter to dividend policy? Evidence from Buddhism and Taoism in China

Purpose - The purpose of this paper is to examine the relation between Buddhism/Taoism and dividend payout decisions among Chinese listed firms during 2003-2013. Design/methodology/approach - The authors include all Chinese A-share listed stocks in their sample during 2003-2013 and use a multiple regression method to conduct their analyses. Findings - Their findings suggest that firms in regions with high influence of Buddhism and Taoism lean toward having high dividend payouts. The results are robust to a battery of alternative specifications in dividend payout, religiosity measures, research methods and dividend regulation regimes. Originality/value - They show that the religions of Buddhism/Taoism play a role in determining dividend payout, complementing other informal institution studies of dividend policy. They complement the literature by providing insights into the impact of Buddhism and Taoism on corporate behaviors beyond immoral or unethical practices. They are able to relate specific doctrinal tenets of Buddhism and Taoism to corporate behavior rather than using only the general moral and ethical guidelines of religiosity.