The status quo and the investment decisions

Abstract

Purpose

This article investigates the influence of status quo bias (SQB) on venture capital investments.

Design/methodology/approach

The authors use the dynamic panel probit (respectively logit) model for 24 countries over nine years (from 2007–2015).

Findings

The authors’ regressions reveal that the SQB is meaningful in real decisions. Indeed, the authors find that the choice of investment sectors depends positively on the previous choice. Moreover, the study identifies other factors that were perceived to influence the choice of the investment industry such as added value by activity and the venture capital (VC) country attractiveness index.

Practical implications

By knowing the behavior of VC FIRMS, entrepreneurs would better frame their business plans and better target the VC to whom they should better contact.

Originality/value

No research has dealt with this question, yet status quo is consensually recognized as an omnipresent institutional factor.

Citation

EL Harbi, S. and Toumia, O. (2020), "The status quo and the investment decisions", Managerial Finance, Vol. 46 No. 9, pp. 1183-1197. https://doi.org/10.1108/MF-11-2019-0571