TY - JOUR
T1 - Social trust and angel investors' decisions
T2 - A multilevel analysis across nations
AU - Ding, Zhujun
AU - Au, Kevin
AU - Chiang, Flora
N1 - Publisher Copyright:
© 2014 Elsevier Inc.
PY - 2015/3/1
Y1 - 2015/3/1
N2 - 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.
AB - 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.
KW - Angel investment
KW - Comparative entrepreneurship
KW - Entrepreneurship
KW - Institutional perspective
KW - L26
KW - Social trust
UR - http://www.scopus.com/inward/record.url?scp=84925035962&partnerID=8YFLogxK
U2 - 10.1016/j.jbusvent.2014.08.003
DO - 10.1016/j.jbusvent.2014.08.003
M3 - Journal article
AN - SCOPUS:84925035962
SN - 0883-9026
VL - 30
SP - 307
EP - 321
JO - Journal of Business Venturing
JF - Journal of Business Venturing
IS - 2
ER -
