INFORMAL INVESTORS: WHOSE MONEY ARE THEY INVESTING?

• Main Authors: Rögnvaldur J. Saemundsson, Guðrún Mjöll Sigurðardóttir
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Published: 2004
• Subjects: Iceland
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.201.7875; http://web.bi.no/forskning/ncsb2004.nsf/23e5e39594c064ee852564ae004fa010/a6cb7066ea59eda6c12567f30056ef4d/%24FILE/Saemundsson%26al.pdf

The purpose of this paper is to investigate the validity of the assumption that the funds provided by informal investors to new and growing businesses only come from their own savings. The analysis in the paper is descriptive and based on empirical data from the GEM adult population survey in Iceland carried out in May 2003. The results show that the assumption is not valid. Dept is frequently used and more out of necessity and without a clear understanding of the investment opportunity rather than as a mean for sizing opportunities. These findings should be taken into account when constructing policies for stimulating informal investments.