Religious and Cash Holding: Evidence from Indonesia

Abstract

This research examines the effect of religiosity on the cash holding. The method used to test the model is panel data regression by investigating the effect of religiosity on the cash holding of shari'a and non-shari'a companies. The results show that Religiosity (Islamic Dichotomic), showing a positive and significant coefficient on cash holdings. Companies with a high level of religiosity hold significant amounts of cash. The companies hold cash to reduce risk by reducing debt financing. Keywords: cash holdings, religiosity, risk

The effect of corporate environmental responsibility and religiosity on corporate cash holding decisions and profitability: Evidence from the United States' policies for sustainable development

“…The level of local religiosity around an organization is directly proportional to its level of risk aversion (Hilary & Hui, 2009;Shu et al, 2012). Chen and Hungerman (2014) reveal that the interassociation between religion, economics, and culture has been determined by several financial economists as requiring better comprehension for future studies (Hendrawaty, Pranyoto, & Abubakar, 2019). This research analyzes the levels of local religiosity around organizations with regard to their ability to adversely affect debt financing as well as make investment decisions (Chen, Huang, Lobo, & Wang, 2016).…”