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Religious attitudes and home bias: theory and new evidence from primary data

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<mark>Journal publication date</mark>05/2014
<mark>Journal</mark>Review of Development Economics
Issue number2
Volume18
Number of pages14
Pages (from-to)401-414
Publication statusPublished
Original languageEnglish

Abstract

This paper examines the relationship between religion and home bias. A theoretical framework is proposed suggesting that countries may show a certain degree of religion-enhanced international altruism associated with a lower home bias. These predictions are investigated empirically using original individual-level data from a survey on religious attitudes and home bias that was designed and collected in 15 countries. Contrary to previous evidence, the empirical investigation suggests that religious denominations may not play an important role in determining home bias. The findings partly corroborate the hypothesis that an open and tolerant attitude towards religion may enhance trust and altruism and, hence, may have a pro-trade effect by lowering home bias. It is concluded that models investigating the relationship between religion and home bias should incorporate different aspects of religion beyond affiliations and should consider different dimensions of home bias.