Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265254 
Year of Publication: 
2022
Series/Report no.: 
Working Papers of the Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour" No. 35
Publisher: 
Humboldt University Berlin, Berlin
Abstract: 
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.
Subjects: 
home bias
venture capital
start-ups
investor behavior
common regional identity
historical political instability
JEL: 
G11
G24
G41
N20
Z19
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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