International Journal of Business and Economics Volume 22, No. 2 September, 2023

Religious Beliefs, Information Asymmetry, and Bank Financing Risk

Amarjit Gill

Edwards School of Business, University of Saskatchewan, Canada

Harvinder S. Mand

University College Dhuri, India

Gaganpreet Kaur

Panth Rattan Jathedar Gurcharan Singh Tohra Institute for Advance Studies in Sikhism, Punjab, India

Neil Mathur

Walden University, Minneapolis, MN, USA

Abstract

This study aimed to explore the relationship between religious beliefs (RB), information asymmetry (INFO_ASY), and bank financing (BFR). This study used survey research to collect data from the owners of micro, small, and medium enterprises (MSMEs) located in Punjab, Haryana, Maharashtra, Rajasthan, Himachal Pradesh, and the Utter Pradesh States. We asked the research participants about their perceptions of the relationship between religious beliefs, INFO_ASY, and BFR. The empirical analysis shows that RB reduces INFO_ASY between MSME owners and lenders. Results also show that a decrease in INFO_ASY reduces BFR for MSMEs. The results contribute to the literature on the relationship between religious beliefs, INFO_ASY, and BFR. Financial institutions, owners of MSMEs, financial management consultants, and other stakeholders may find results beneficial to decrease BFR. In addition, academia may find the results helpful in further studies on the relationship between religious beliefs, INFO_ASY, and BFR.

Keywords：Religious Beliefs, Information Asymmetry, Bank Financing Risk, India

JEL Classifications：G30, G32

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