The upper echelons theory states that organizational engagements may replicate the experiences, personalities and values of dominant players within a firm. Based on this theory, this study examines the effect of religion (Buddhism and Taoism) on employment protection in an emerging market (China). Using data collected from Chinese private firms in 2010, the empirical results show that employment protection is positively associated with religion, indicating that religion plays a positive role in improving employment protection. Moreover, the relationship between religion and employment protection is more prominent in regions with stronger formal institutions. According to the restricted data resources and the few studies in the context of China, this study presents a new proof of the relationship between religion and employment protection.
Keywords: Employment protection; Formal institutions; Religion.
© 2021. The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.