In family we trust. Religiosity and credit rationing in family-owned firms

This paper investigates the influence of regional religiosity on credit rationing for family-owned firms in Italy. By using data from the VIII UniCredit Survey on medium-sized enterprises, we examine how the intersection of family ownership and religious engagement is related with firms’ access to credit. The results indicate that family firms are generally more likely to face credit restrictions; however, this likelihood is significantly reduced in regions with high levels of religious participation. This suggests that religious norms, which convey trustworthiness and lower risk in family firms, enhance their chances of obtaining credit from banks.