Is the crowd sensitive to distance?—how investment decisions differ by investor type

Christina Guenther (), Sofia Johan and Denis Schweizer ()
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Christina Guenther: WHU—Otto Beisheim School of Management
Denis Schweizer: Concordia University

Small Business Economics, 2018, vol. 50, issue 2, No 4, 289-305

Abstract: Abstract This paper presents the first evidence of the influence of geographic distance among retail, accredited, and overseas investors and venture location in an equity crowdfunding context. By analyzing investment decisions, we show that geographic distance is negatively correlated with investment probability for all home country investors. Our comparison of home country and overseas investors reveals that overseas investors are not sensitive to distance. However, when comparing only home country investors (subdivided into retail and accredited), we document that both investor types are similarly sensitive to the distance of possible ventures.

Keywords: Distance; Equity crowdfunding; Entrepreneurial finance; Entrepreneurship; Home bias; Internet (search for similar items in EconPapers)
JEL-codes: G24 G32 K22 L26 M13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:50:y:2018:i:2:d:10.1007_s11187-016-9834-6

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DOI: 10.1007/s11187-016-9834-6

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