The Importance of Trust for Investment: Evidence from Venture Capital

Bottazzi, Laura ; Da Rin, Marco ; Hellmann, Thomas (2007) The Importance of Trust for Investment: Evidence from Venture Capital. Bologna: Dipartimento di Scienze economiche DSE, p. 32. DOI 10.6092/unibo/amsacta/4640. In: Quaderni - Working Paper DSE (612). ISSN 2282-6483.
Full text available as:
[img]
Preview
PDF
License: Creative Commons Attribution Non-commercial

Download (261kB) | Preview

Abstract

This paper examines the effect of trust in a micro-economic environment, where trust is clearly exogenous. Using a hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment decisions. This holds even after controlling for investor and company fixed effects, geographic distance, information and transaction costs. The national identity of venture capital firms’ partners is shown to matter for the effect of trust. We also considers the relationship between trust and sophisticated contracts involving contingent control rights. We find trust and sophisticated contracts to be complements, not substitutes.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bottazzi, Laura
Da Rin, Marco
Hellmann, Thomas
Subjects
ISSN
2282-6483
DOI
Deposit date
24 Feb 2016 16:22
Last modified
24 Feb 2016 16:23
URI

Other metadata

Downloads

Downloads

Staff only: View the document

^