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Combining the views of managerial myopia and risk aversion, we argue that a short decision horizon could divert corporate investments away from R&D investments. We devise an industry-adjusted measurement combining CEO's expected tenure and age as a proxy for CEO decision horizon and find a positive relationship between the horizon and corporate R&D investments. The relationship is stronger among firms with lower industry-level income volatility and lower firm-level performance pressure. The results also show that CEO age is more important than CEO tenure in affecting the decision horizon. Further analyses indicate that risk aversion determines the studied relationship.

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Drawing on signaling theory, we propose that religious culture leads suppliers to alter their beliefs about their customers’ trustworthiness. Strong religious cultures are interpreted as a signal of fewer agency problems and less information asymmetry, which helps firms gain more trade credit from suppliers. The empirical tests performed in this study show that firms headquartered in areas with strong religious cultures receive more trade credit than other firms. This positive relation is more prominent when such firms are located in areas with lower levels of social trust. A further analysis reveals that the increasing effect of religious culture on trade credit eases financing constraints. Overall, our findings indicate that religious culture can be a broad indicator of firms’ ethical preferences that influences their access to trade credit by signaling their potential for a high level of trustworthiness.