Identity, instability, and investors: An empirical investigation of the home bias

Arbeitspapier

In this paper, we present novel data from the German-speaking area on 13,422 venture capital investments between 1999 and 2019, and document a novel and yet unexplained contributor to investors' home bias. We propose a new measure of regional identity based on a recent vehicle license plate liberalization in Germany, and leverage on a unique dataset of historical borders to show how regional identity is formed. We use an instrumental strategy to establish a causal link between historical political instability, regional identity, and the home bias. Our results indicate that a common regional identity is highly relevant for investment decisions.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Papers of the Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour" ; No. 35

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Portfolio Choice; Investment Decisions ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡ ; Economic History: Financial Markets and Institutions: General, International, or Comparative ; Cultural Economics: Other
• Thema: home bias ; venture capital ; start-ups ; investor behavior ; common regional identity ; historical political instability

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Huning, Thilo R. ; Wahl, Fabian
• Ereignis: Veröffentlichung
• (wer): Humboldt University Berlin
• (wo): Berlin
• (wann): 2022

Weitere Informationen

• DOI: doi:10.18452/25369
• Handle: http://hdl.handle.net/10419/265254
• URN: urn:nbn:de:kobv:11-110-18452/26058-9
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ