Weather-Induced Mood and Crowdfunding

46 Pages Posted: 23 Aug 2019 Last revised: 15 Oct 2020

See all articles by Kourosh Shafi

Kourosh Shafi

California State University, East Bay

Ali Mohammadi

Copenhagen Business School - Department of Strategy and Innovation; Danish Finance Institute; Royal Institute of Technology (KTH) - Center of Excellence for Science and Innovation Studies

Date Written: August 5, 2019

Abstract

Do investors' moods influence their contributions to risky investments in equity crowdfunding? Yes. We use weather as a proxy for mood because besides serving as powerful mood stimulus, changes in weather are plausibly exogenous and orthogonal to attributes of crowdfunding campaigns, yielding an advantageous identification strategy. Our results, based on data from Companisto -- one of the largest European equity crowdfunding platforms -- indicate that change in sky cloud cover from zero to full reduces investors' contribution amounts by about 10-15% (across different specifications). Our paper highlights the broader role of financiers' moods and emotions in providing valuable financial resources to entrepreneurs.

Keywords: crowdfunding, weather, mood, risk-taking

JEL Classification: G41, G11, L26, M13, D26

Suggested Citation

Shafi, Kourosh and Mohammadi, Ali, Weather-Induced Mood and Crowdfunding (August 5, 2019). Journal of Corporate Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3439246 or http://dx.doi.org/10.2139/ssrn.3439246

Kourosh Shafi

California State University, East Bay ( email )

25800 Carlos Bee Boulevard
Hayward, CA California 94542
United States

Ali Mohammadi (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

Danish Finance Institute ( email )

Royal Institute of Technology (KTH) - Center of Excellence for Science and Innovation Studies ( email )

Drottning Kristinas väg 30
Stockholm, SE-100 44
Sweden

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