Religious Tradition,Legalization Process And Corporate Risk

This paper focuses on the effect of the relationship between the formal system and informal system on the level of Chinese enterprises' risk-taking.In detail,this paper takes the data of listed companies in A-share from 2000 to 2014 as samples to study the function of religious tradition on the corporate risk-taking and its characteristic under different external law environments.What's more,this paper also discusses how the religious tradition influences the corporate risk-taking.Besides,this study further tries to do some robustness tests to make sure that these results are always stable.It shows that the level of corporate risk-taking is lower in the region where there are more religious sites.Further step,the above findings are more apparent in the companies owing small assets.In addition,the external law environment has a substitute for religious tradition,that is,the inverse relationship between religious tradition and corporate risk taking will be weakened with the deepening of the legalization process.To some extent,there is a substitution relation between informal and formal institutions.Finally,religious tradition mainly influences the level of corporate risk-taking from the way of the risk appetite and social capital.In a word,this research provides empirical evidence for understanding Chinese transitional economy operation mechanism,which can also draw the scholars' attention to the role of informal institutional arrangement in the transition economy.