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  • religiosity_and_VCs_02-12-19_final

    Rights statement: This is the author’s version of a work that was accepted for publication in Journal of Corporate Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Corporate Finance, 62, 2020 DOI: 10.1016/j.jcorpfin.2020.101589

    Accepted author manuscript, 458 KB, PDF document

    Embargo ends: 8/08/21

    Available under license: CC BY-NC-ND

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Does religiosity influence venture capital investment decisions?

Research output: Contribution to journalJournal article

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Article number101589
<mark>Journal publication date</mark>30/06/2020
<mark>Journal</mark>Journal of Corporate Finance
Volume62
Number of pages14
Publication statusPublished
Early online date8/02/20
Original languageEnglish

Abstract

Theories on contextual behavior (e.g., social norm, self-identity, and legitimacy theories) suggest that the religiosity of the geographical area in which an organization operates influences its behavior. Using a sample of 91,020 VC investments in the U.S., we study whether religiosity influences VC investment decisions. Based on prior literature that finds a positive relation between religiosity and risk aversion, we posit that VCs located in more religious counties make less risky investments. We find that VCs located in more religious areas are more likely to be involved in staging and syndication and have a greater propensity to invest in later and expansion stages of portfolio companies. Taken together, our results suggest that VCs located in religious counties tend to be more risk averse.

Bibliographic note

This is the author’s version of a work that was accepted for publication in Journal of Corporate Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Corporate Finance, 62, 2020 DOI: 10.1016/j.jcorpfin.2020.101589