Lehrstuhladresse:
Universität Bielefeld
Fakultät für Wirtschaftswissenschaften
Lehrstuhl für Arbeitsmarktökonomik
Postfach 10 01 31
33501 Bielefeld, Deutschland
Lieferadresse:
Universität Bielefeld
Fakultät für Wirtschaftswissenschaften
Lehrstuhl für Arbeitsmarktökonomik
Universitätsstraße 25
D-33615 Bielefeld
Büro:
Raum W8-101
Telefon (+49) (0)521 106 5637
Briefkasten U/V3 1757
Email: anna.zaharieva@uni-bielefeld.de
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 examine 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.