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This paper investigates the critical role of religion in the economic recovery after high-impact natural disasters. Exploiting the 2005 hurricane season in the southeast United States, we document that establishments in counties with higher religious adherence rates saw a significantly stronger recovery in terms of productivity for 2005-2010. Our results further suggest that a particular religious denomination does not drive the effect. We observe that different aspects of religion, such as adherence, shared experiences from ancestors, and institutionalised features, all drive the effect on recovery. Our results matter since they underline the importance of cultural characteristics like religion during and after economic crises.

This paper investigates the critical role of culture for economic recovery after natural disasters. Using Hurricane Katrina as our laboratory, we find a significant adverse treatment effect for plant-level productivity. However, local religious adherence and larger shares of ancestors with disaster experiences mutually mitigate this detrimental effect from the disaster. Religious adherence further dampens anxiety after Hurricane Katrina, which potentially spur economic recovery. We also detect this effect on the aggregate county level. More religious counties recover faster in terms of population, new establishments, and GDP.

AbstractWe examine how financial analysts respond to public information about corporate social irresponsibility (CSI) conduct. Exploiting a novel dataset on environmental, social, and governance reputational risk rating based on media coverage and analyzing a sample of 667 public corporations over an 11‐year period, we find that analysts' optimistic bias tends to grow in proportion to media coverage of CSI conduct. To deal with the endogeneity issue, we propose as instrumental variable, namely, the Euclidean distance from the Canadian border. The results are robust to the use of different measures of the independent and dependent variables as well as an alternative instrumental variable approach. We also show that over‐optimistic bias is larger when information asymmetries are stronger. Our findings are in line with the rational over‐optimistic behavior hypothesis and have important implications for market efficiency.