Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 11, 2016 erstellt
Beschreibung:
Using hedge fund returns and county-level religiosity data during 1996-2013, we examine the effects of local religious beliefs on hedge fund risk-taking behaviors. We find that local religiosity is significantly negatively related to both total and idiosyncratic volatilities of hedge funds, even after controlling for endogeneity using managers' college-location religiosity. Further analyses show that funds located in counties with higher religiosity ratios tend to hold less risky stocks and diversify their stock portfolios across industries, thus contributing to lower risk-taking of these funds. Overall, our evidence suggests that local religiosity may motivate hedge fund managers to reduce excessive idiosyncratic risk