Full Citation
Title: Attitudes Toward Noncompliance and the Demand for External Financing
Citation Type: Journal Article
Publication Year: 2019
ISBN:
ISSN: 0022-1090
DOI: 10.1017/S0022109018000868
NSFID:
PMCID:
PMID:
Abstract: We study the link between the individual propensity to violate moral principles and the demand for finance based on two data sets: the World Values Survey and a data set with the legal records of U.S. chief executive officers (CEOs). We find that individuals who are more tolerant of moral principle violations are more likely to borrow. Corporate executives with legal records are also associated with larger mortgages. Reverse causality and attitudes toward risk are unlikely explanations for our findings. We contend that noncompliance relaxes participation constraints in capital markets by lowering the psychological costs of entering and breaking a contract.
Url: https://www.cambridge.org/core/product/identifier/S00221090
User Submitted?: No
Authors: Davidson, Robert H.; Pirinsky, Christo
Periodical (Full): Journal of Financial and Quantitative Analysis
Issue: 2
Volume: 54
Pages: 967-991
Data Collections: IPUMS USA
Topics: Other
Countries: United States