PRESS-NEWS.org - Press Release Distribution
PRESS RELEASES DISTRIBUTION

Religion is good for business shows Rotman study

2013-12-21
(Press-News.org) Contact information: Ken McGuffin
mcguffin@rotman.utoronto.ca
416-946-3818
University of Toronto, Rotman School of Management
Religion is good for business shows Rotman study

Toronto – Those looking for honest companies to invest in might want to check out businesses based in more religious communities, suggests a new paper from the University of Toronto's Rotman School of Management.

The study found that businesses with head offices in places with high levels of "religiosity" were less likely to experience stock price crashes as a result of not disclosing bad financial news. And it didn't matter whether those at the top were religious or not. Just being in a town where social norms are influenced by religious codes of behaviour was enough to rub off on the companies operating there.

"There is nothing quicker to losing your good name in a religious milieu than doing something like withholding bad news and not being upfront. There's a real cost," said Prof. Jeffrey Callen, who holds the Joseph L. Rotman Chair in Accounting, who co-wrote the paper with former graduate student Xiaohua Fang, now an assistant business professor at Georgia State University.

The researchers used data from 1971 to 2000 about the number of churches and church membership in U.S. counties from the American Religion Data Archive. They compared this with information about stock returns and accounting restatements for U.S. companies, including where those companies were headquartered.

Previous research has shown that religious managers are less likely to manipulate the flow of information and a religious setting tends to foster more whistleblowers within a corporation, raising the risk of manipulators getting caught.

The researchers' own finding of a strong correlation between religiosity and a low risk of stock price crash due to bad news "hoarding," was particularly strong among companies with weak governance.

"Where you have strong corporate governance, religion doesn't need to kick in," said Prof. Callen. "But where there is poor corporate governance, religion substitutes for it."

Although Prof. Callen is an orthodox Jew, he was "agnostic" about the topic prior to his co-author suggesting it, and was surprised that the findings were so strong.

However, the paper should not be taken to suggest that religious people are more moral than others, he said.

"Social norms of all types are going to be useful to minimize all sorts of bad behaviour by firms," he said.

The paper is forthcoming in the Journal of Financial and Quantitative Analysis.



INFORMATION:



For the latest thinking on business, management and economics from the Rotman School of Management, visit http://www.rotman.utoronto.ca/FacultyAndResearch/NewThinking.aspx.

The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world's most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit http://www.rotman.utoronto.ca.

For more information:

Ken McGuffin
Manager, Media Relations
Rotman School of Management
University of Toronto
Voice 416.946.3818
E-mail mcguffin@rotman.utoronto.ca

Follow Rotman on Twitter @rotmanschool
Watch Rotman on You Tube



ELSE PRESS RELEASES FROM THIS DATE:

Not just the Koch brothers: New Drexel study reveals funders behind the climate change denial effort

2013-12-21
Not just the Koch brothers: New Drexel study reveals funders behind the climate change denial effort A new study conducted by Drexel University's environmental sociologist Robert J. Brulle, PhD, exposes the organizational underpinnings and funding behind the powerful ...

NASA satellites see Tropical Cyclone Amara affecting Rodrigues Island

2013-12-21
NASA satellites see Tropical Cyclone Amara affecting Rodrigues Island When NASA's Terra satellite passed over Tropical Cyclone Amara on December 20, its western quadrant was already moving over Rodrigues Island, Mauritius. Warnings are already in effect for the island, ...

Even or odd: No easy feat for the mind

2013-12-21
Even or odd: No easy feat for the mind MADISON — Even scientists are fond of thinking of the human brain as a computer, following sets of rules to communicate, make decisions and find a meal. But if the brain is like a computer, why do brains make mistakes ...

Van Allen Probes shed light on decades-old mystery

2013-12-21
Van Allen Probes shed light on decades-old mystery New research using data from NASA's Van Allen Probes mission helps resolve decades of scientific uncertainty over the origin of ultra-relativistic electrons in Earth's near space environment, and is likely to ...

Virginia Tech research overturns assumption about mercury in the Arctic

2013-12-21
Virginia Tech research overturns assumption about mercury in the Arctic Mercury concentrations in fish much lower than expected For years, scientists have assumed that if mercury is high and increasing in fish in the North American and European Arctic, the same is true of fish ...

Ohio State study shows 2 drugs help adolescents with ADHD, aggression

2013-12-21
Ohio State study shows 2 drugs help adolescents with ADHD, aggression COLUMBUS, Ohio – Prescribing both a stimulant and an antipsychotic drug to children with physical aggression and attention-deficit/hyperactivity disorder (ADHD), ...

Adult stem cells found to suppress cancer while dormant

2013-12-21
Adult stem cells found to suppress cancer while dormant Researchers at UCLA's Eli and Edythe Broad Center of Regenerative Medicine and Stem Cell Research have discovered a mechanism by which certain adult stem cells suppress their ability to initiate ...

Concussion tests' marketing outpaces scientific evidence, new review says

2013-12-20
Concussion tests' marketing outpaces scientific evidence, new review says Computerized neurocognitive testing for concussions is widely used in amateur and professional sports, but little research over the past decade proves its effectiveness, a paper ...

Classic signaling pathway holds the key to prostate cancer progression

2013-12-20
Classic signaling pathway holds the key to prostate cancer progression Approximately 1 out of every 6 American men will be diagnosed with prostate cancer, and this year alone there are expected to be nearly a quarter of a million new cases diagnosed, making prostate ...

Helping good genes win in brain cancer cells

2013-12-20
Helping good genes win in brain cancer cells Porto Alegre, Brazil - Researchers at the Federal University of Rio Grande do Sul (UFRGS), the university hospital (Hospital de Clínicas de Porto Alegre, HCPA) and the Children's Cancer Institute (Instituto ...

LAST 30 PRESS RELEASES:

CMD-OPT model enables the discovery of a potent and selective RIPK2 inhibitor as preclinical candidate for the treatment of acute liver injury

Melatonin receptor 1a alleviates sleep fragmentation-aggravated testicular injury in T2DM by suppression of TAB1/TAK1 complex through FGFR1

Single-cell RNA sequencing reveals Shen-Bai-Jie-Du decoction retards colorectal tumorigenesis by regulating the TMEM131–TNF signaling pathway-mediated differentiation of immunosuppressive dendritic ce

Acta Pharmaceutica Sinica B Volume 15, Issue 7 Publishes

New research expands laser technology

Targeted radiation offers promise in patients with metastasized small cell lung cancer to the brain

A high clinically translatable strategy to anti-aging using hyaluronic acid and silk fibroin co-crosslinked hydrogels as dermal regenerative fillers

Mount Sinai researchers uncover differences in how males and females change their mind when reflecting on past mistakes

CTE and normal aging are difficult to distinguish, new study finds

Molecular arms race: How the genome defends itself against internal enemies

Tiny chip speeds up antibody mapping for faster vaccine design

KTU experts reveal why cultural heritage is important for community unity

More misfolded proteins than previously known may contribute to Alzheimer’s and dementia

“Too much going on”: Autistic adults overwhelmed by non-verbal social cues

What’s driving America’s deep freezes in a warming world?

A key role of brain protein in learning and memory is deciphered by scientists

Heart attacks don’t follow a Hollywood script

Erin M. Schuman wins 2026 Nakasone Award for discovery on neural synapse function and change during formation of memories

Global ocean analysis could replace costly in-situ sound speed profiles in seafloor positioning, study finds

Power in numbers: Small group professional coaching reduces rates of physician burnout by nearly 30%

Carbon capture, utilization, and storage: A comprehensive review of CCUS-EOR

New high-temperature stable dispersed particle gel for enhanced profile control in CCUS applications

State gun laws and firearm-related homicides and suicides

Use of tobacco and cannabis following state-level cannabis legalization

Long-term obesity and biological aging in young adults

Eindhoven University of Technology and JMIR Publications announce unlimited open access publishing agreement

Orphan nuclear receptors in metabolic dysfunction-associated steatotic liver disease development

A technological breakthrough for ultra-fast and greener AI

Pusan National University researchers identify key barriers hindering data-driven smart manufacturing adoption

Inking heterometallic nanosheets: A scalable breakthrough for coating, electronics, and electrocatalyst applications

[Press-News.org] Religion is good for business shows Rotman study