Social trust and angel investors' decisions: A multilevel analysis across nations

Zhujun Ding, Kevin Au*, Flora CHIANG

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    80 Citations (Scopus)


    The decisions made by angel investors are embedded in and influenced by their institutional settings. This paper advances a multilevel model of the direct and indirect effects of social trust on individuals' angel-investment decisions. It is postulated that two dimensions of social trust, namely the level and radius, can enhance information transmission, collaboration, and sanctioning mechanisms within a society. Consequently, they facilitate angel investment and moderate the relationship between it and individual factors. A multilevel model of data from 191,907 individuals across 25 countries shows that individuals in countries with a high level of trust are more likely to make angel investments. Whereas both the level of trust and the radius of trust are found to heighten the positive relationship between an individual's perceived entrepreneurial skills and angel investment, it is interesting to note that these factors weaken the relationship between the perception of new business opportunities and angel investment. These direct and moderating effects are robust after controlling for wealth, cultural values, and other factors. This study contributes to the crossover between research on entrepreneurship and social-trust research.

    Original languageEnglish
    Pages (from-to)307-321
    Number of pages15
    JournalJournal of Business Venturing
    Issue number2
    Publication statusPublished - 1 Mar 2015

    Scopus Subject Areas

    • Business and International Management
    • Management of Technology and Innovation

    User-Defined Keywords

    • Angel investment
    • Comparative entrepreneurship
    • Entrepreneurship
    • Institutional perspective
    • L26
    • Social trust


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