Law, Trust, and the Development of Crowdfunding

49 Pages Posted: 20 Jun 2017 Last revised: 11 Nov 2021

Date Written: July 1, 2020


Using a unique hand-collected sample of crowdfunding volume obtained by surveying over 2,200 crowdfunding platforms worldwide, I show that the introduction of explicit legal regulation appears to significantly increase crowdfunding volume. The effect appears to be at least partly causal. Crowdfunding volume is at best weakly related to social factors such as the country level of generalized trust.

Keywords: Industrial Organization, Alternative finance, Distributed finance, Crowdsourcing, Crowdfunding, Law and finance, Peer-to-Peer, P2P lending, Equity crowdfunding, Social Finance

JEL Classification: G21, G23

Suggested Citation

Rau, P. Raghavendra, Law, Trust, and the Development of Crowdfunding (July 1, 2020). Available at SSRN: or

P. Raghavendra Rau (Contact Author)

University of Cambridge ( email )

Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)


Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics