Religiosity and Innovation Attitudes: An Instrumental Variables Analysis

TL;DR

This study investigates how religiosity influences individual attitudes towards innovation, using instrumental variables to address endogeneity, and finds that higher religiosity generally correlates with less favorable innovation attitudes.

Contribution

It introduces an individual-level analysis of religiosity's effect on innovation attitudes employing instrumental variables to establish causality.

Findings

Religiosity negatively affects innovation attitudes.

Instrumental variables approach confirms causal relationship.

Three channels identified: time allocation, fear of uncertainty, traditional roles.

Abstract

Estimating the influence of religion on innovation is challenging because of both complexness and endogeneity. In order to untangle these issues, we use several measures of religiosity, adopt an individual-level approach to innovation and employ the instrumental variables method. We analyse the effect of religiosity on individual attitudes that are either favourable or unfavourable to innovation, presenting an individual's propensity to innovate. We instrument one's religiosity with the average religiosity of people of the same sex, age range, and religious affiliation who live in countries with the same dominant religious denomination. The results strongly suggest that each measure of religiosity has a somewhat negative effect on innovation attitudes. The diagnostic test results and sensitivity analyses support the main findings. We propose three causality channels from religion to innovation: time allocation, the fear of uncertainty, and conventional roles reinforced by religion.