Full Citation
Title: Attitudes Towards Non-compliance and the Demand for External Finance
Citation Type: Journal Article
Publication Year: 2019
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ISSN:
DOI: https://doi.org/10.1017/S0022109018000868
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Abstract: We study the link between individual propensity to violate moral principles and demand for finance based on two datasets – the World Values Survey and a dataset with the legal records of U.S. 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 towards risk are unlikely explanations of our findings. We contend that non-compliance relaxes participation constraints in capital markets by lowering the psychological costs of entering and breaking a contract.
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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: Land Use/Urban Organization, Other
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