The influence of dispositional affect and cognition on venture investment portfolio concentration

Chien Sheng Richard Chan and Haemin Dennis Park

Journal of Business Venturing, 2013, vol. 28, issue 3, 397-412

Abstract: We explore how an investor's dispositional affect and cognitive style influence venture investment portfolio concentration. Based on a field study using a sample of 128 judges from a business plan competition, we find that high positive affectivity investors construct more concentrated investment portfolios than their low positive affectivity counterparts, whereas high negative affectivity investors construct more diversified investment portfolios than their low negative affectivity counterparts. Further, investors who rely on analytical decision making display a weaker relationship between negative affectivity and investment diversification whereas investors who rely on emotion-based decision making display a stronger relationship between positive affectivity and investment concentration.

Keywords: Venture investment decisions; Dispositional affect; Cognition (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:28:y:2013:i:3:p:397-412

DOI: 10.1016/j.jbusvent.2012.02.006

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