Religion and corporate innovation

This study represents the first comprehensive analysis of the role of national religiosity in corporate innovation. Using a PCA method, we divide religiosity into five dimensions: ideological, ritualistic, experiential, intellectual, and consequential. For 1506 firms in 27 countries, we find that the ideological and ritualistic dimensions promote corporate innovation, whereas the experiential, intellectual, and consequential dimensions hinder corporate innovation. Furthermore, religiosity overall has a positive impact on corporate innovation. Finally, we show that the positive effect of religiosity is more pronounced for firms in Judeo-Christian countries. Overall, we provide the first guideline to understand the diverse and comprehensive effects of religion on corporate innovation. (JEL G3, O3, Z12)