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:
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
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.
Document type
Monograph
(Working Paper)
Creators
Subjects
ISSN
2282-6483
DOI
Deposit date
24 Feb 2016 16:22
Last modified
24 Feb 2016 16:23
URI
Other metadata
Document type
Monograph
(Working Paper)
Creators
Subjects
ISSN
2282-6483
DOI
Deposit date
24 Feb 2016 16:22
Last modified
24 Feb 2016 16:23
URI
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