Abstract

http://ssrn.com/abstract=2219546
 
 

References (26)



 
 

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Home Bias in Online Investments: An Empirical Study of an Online Crowdfunding Market


Mingfeng Lin


University of Arizona - Eller College of Management

Siva Viswanathan


University of Maryland - Robert H. Smith School of Business

January 26, 2014

Forthcoming, Management Science

Abstract:     
An extensive literature in economics and finance has documented “home bias,” the tendency that transactions are more likely to occur between parties in the same geographical area, rather than outside. Using data from a large online crowdfunding marketplace and employing a quasi-experimental design, we find evidence that home bias still exists in this virtual marketplace for financial products. Furthermore, through a series of empirical tests, we show that rationality-based explanations cannot fully explain such behavior, and that behavioral reasons at least partially drive this remarkable phenomenon. As crowdfunding becomes an alternative and increasingly appealing channel for financing, a better understanding of home bias in this new context provides important managerial, practical, and policy implications.

Number of Pages in PDF File: 36

Keywords: home bias; peer-to-peer lending; quasi-experiment; crowdfunding; behavioral explanations


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Date posted: February 18, 2013 ; Last revised: March 27, 2015

Suggested Citation

Lin, Mingfeng and Viswanathan, Siva, Home Bias in Online Investments: An Empirical Study of an Online Crowdfunding Market (January 26, 2014). Forthcoming, Management Science. Available at SSRN: http://ssrn.com/abstract=2219546 or http://dx.doi.org/10.2139/ssrn.2219546

Contact Information

Mingfeng Lin (Contact Author)
University of Arizona - Eller College of Management ( email )
Tucson, AZ 85721
United States
Siva Viswanathan
University of Maryland - Robert H. Smith School of Business ( email )
College Park, MD 20742-1815
United States
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