The importance of trust for investment
Subtitle: evidence from venture capital
By: Laura Bottazzi, Marco Da Rin, Thomas F. Hellmann
Contributors: Rin,Marco Da; Hellmann, Thomas; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16923; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16923.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] :
Description: "We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where trust is exogenous.  Using 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' individual partners further contributes to the effect of trust.  Education and work experience reduce the effect of trust but do not eliminate it.  We also examine the relationship between trust and sophisticated contracts involving contingent control rights and find that, even after controlling for endogeneity, they are complements, not substitutes"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/16/2011.

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