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Keynes Fund


Project Summary

In this paper, we examine how local bias, the predisposition of investors to invest in local firms is affected by the physical distances from other types of investors, specifically evangelical investors. We show that physical distances to these investors appears as, if not more important than the physical distance to the firm in influencing investment in a novel financial instrument, micro-bonds directly issued by the firm to its investors without a financial intermediary involved. The density of evangelical investors within a five km radius to the investor significantly influences the amount invested in the micro-bonds, the frequency of investment, and the likelihood of making repeat investments. We also identify a potential channel through which this influence operates – co-attendance at corporate information events.