Religious Freedom as a Catalyst for Economic Growth

What if the secret to unlocking economic growth and business success was hiding in plain sight—in the way societies treat religious freedom? Our foundational research (Grim, Clark, and Snyder, 2014) revealed that religious freedom isn’t just a moral value—it’s a powerful engine for prosperity. Now, new findings by Maung (2025) deliver fresh data and surprising insights, showing exactly how religious freedom fuels innovation, investment, and sustainable development. Curious about the evidence and what it means for the future of business? Dive into the latest research and discover why religious freedom could be the game-changer your country (or organization) needs.

Theoretical Foundations and Empirical Evidence

Grim, Clark, and Snyder’s 2014 study, “Is Religious Freedom Good for Business? A Conceptual and Empirical Analysis,” articulates a clear thesis: countries with greater religious freedom — characterized by low government restrictions and low social hostilities — consistently outperform others on key measures of global competitiveness and economic growth. Their research expands on religious economies theory, which posits that restrictions on religious freedom lead to adverse societal outcomes, including increased violence and economic stagnation.

Our 2014 study provides compelling evidence that religious hostilities and government-imposed restrictions deter investment, disrupt development, and undermine entire economic sectors. Conversely, environments that respect religious freedom foster peace, stability, and lower corruption — conditions essential for sustainable business and economic prosperity. The study’s empirical modeling demonstrates that religious freedom is one of only three significant predictors of GDP growth globally, even when controlling for other economic, political, and social factors. Notably, ten of the twelve pillars of global competitiveness, as measured by the World Economic Forum, are stronger in countries with low religious restrictions and hostilities.

Within organizations, the benefits of religious freedom are equally pronounced. Companies that respect religious diversity and accommodate employees’ beliefs experience improved morale, reduced legal risks, and enhanced stakeholder trust. These advantages translate into higher retention, productivity, and a stronger reputation in the marketplace.

New Evidence from Emerging Markets Review

A new article by Prof. Min Maung (2025), “Do state religions affect entrepreneurial financing? A cross-country analysis,” builds on this foundation with updated datasets and advanced econometric analysis. The study confirms the positive relationship between religious freedom and economic outcomes, demonstrating that countries which improve religious freedom experience measurable gains in foreign investment, innovation, and sustainable development. The research highlights several mechanisms by which religious freedom fosters economic growth:

• — Trust and Social Capital: Religious freedom enhances trust among diverse groups, reducing transaction costs and fostering collaboration.
• — Risk Reduction: Lower religious hostilities and restrictions decrease the risk of conflict and instability, making countries more attractive to investors.
• — Entrepreneurship and Innovation: Environments that protect religious freedom encourage entrepreneurship and the free exchange of ideas, which are critical for innovation, especially in emerging markets.

Importantly, the study finds that religious restrictions and hostilities remain significant barriers to economic growth, echoing the tandem effects identified by Grim, Clark, and Snyder. These findings reinforce the argument that religious freedom is not merely correlated with economic success but is a causal factor enabling societies and businesses to thrive.

Implications for Business Leaders and Policymakers

The convergence of evidence from both studies offers actionable insights for business leaders and policymakers:

• — Strategic Decision-Making: Companies should consider religious freedom when evaluating locations for investment, research and development, and expansion.
• — Workplace Inclusion: Fostering religious inclusion and respect within organizations leads to higher morale, retention, and productivity.
• — Risk Management: Operating in environments with high religious restrictions increases exposure to legal, reputational, and operational risks.
• — Societal Impact: Businesses that champion religious freedom contribute to more stable, prosperous, and innovative societies.

Conclusion

The growing body of evidence is clear: religious freedom is good for business and society. As new research continues to validate and extend these findings, it is imperative for leaders to recognize religious freedom as a strategic asset and integrate it into their decision-making and advocacy. By doing so, they not only advance human rights but also lay the foundation for sustainable economic growth and social well-being.

References:

• — Grim, B.J., Clark, G., & Snyder, R.E. (2014). Is Religious Freedom Good for Business? A Conceptual and Empirical Analysis. Interdisciplinary Journal of Research on Religion, 10(4), https://www.religjournal.com/pdf/ijrr10004.pdf.
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• — Maung, M. (2025). Do state religions affect entrepreneurial financing? A cross-country analysis, Emerging Markets Review, 101434, ISSN 1566-0141, https://doi.org/10.1016/j.ememar.2025.101434.
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