Beyond Financing: Crowdfunding as an Informational Mechanism

26 Pages Posted: 27 Nov 2016

See all articles by Jordana Viotto da Cruz

Jordana Viotto da Cruz

Université Paris Dauphine - PSL Research University; Telecom ParisTech; University of Paris 13 Nord - Faculty of Economic Sciences

Date Written: 2016

Abstract

Besides providing financial support for new ventures, crowdfunding can bring additional advantages for entrepreneurs. In this paper, we test the hypothesis that crowdfunding also serves as an informational mechanism. Using a unique dataset built with publicly available data from Internet-based sources, and after controlling for alternative explanations, we empirically show that even when not successful on crowdfunding, thus not accessing capital, project owners may still decide to release the product in the market if contributions suggest positive valuation of the “crowd”.

Keywords: crowdfunding, information, uncertainty, e-commerce, new product release

JEL Classification: D83, G21, L15, L26

Suggested Citation

Viotto da Cruz, Jordana, Beyond Financing: Crowdfunding as an Informational Mechanism (2016). Available at SSRN: https://ssrn.com/abstract=2870545 or http://dx.doi.org/10.2139/ssrn.2870545

Jordana Viotto da Cruz (Contact Author)

Université Paris Dauphine - PSL Research University ( email )

Place du Maréchal de Lattre de Tassigny
Paris cedex 16, 75775
France

Telecom ParisTech ( email )

46 rue Barrault
Paris, Cedex 13
France

University of Paris 13 Nord - Faculty of Economic Sciences ( email )

France

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