Are Sustainability-Oriented Investors Different? Evidence from Equity Crowdfunding

54 Pages Posted: 10 Jun 2020

See all articles by Lars Hornuf

Lars Hornuf

University of Bremen - Faculty of Business Studies and Economics; Max Planck Institute for Innovation and Competition; CESifo (Center for Economic Studies and Ifo Institute)

Eliza Stenzhorn

University of Bremen - Faculty of Business Studies and Economics

Tim Vintis

University of Bremen - Faculty of Business Studies and Economics

Date Written: 2020

Abstract

In this article, we examine how investor motives affect investment behavior in equity crowdfunding. In particular, we compare the investment behavior of sustainability-oriented with ordinary crowd investors on six leading equity crowdfunding platforms in Austria and Germany and investigate whether they suffer from a default shock that was recently identified by Dorfleitner et al. (2019). In general, we find evidence of a default shock in equity crowdfunding that occurs immediately after the event and if investors experience more than two insolvencies. Moreover, we find that sustainability-oriented investors pledge larger amounts of money and invest in more campaigns than ordinary crowd investors. The results also suggest that sustainability-oriented crowd investors care about non-financial returns, as they react more sensitively after experiencing a default in their equity crowdfunding portfolios, which indicates that they suffer beyond the pure financial loss. These findings contribute to recent literature on equity crowdfunding, socially responsible investing, and how individual investment motives and personal experiences affect investment decisions.

JEL Classification: G110, G240, K220, M130

Suggested Citation

Hornuf, Lars and Stenzhorn, Eliza and Vintis, Tim, Are Sustainability-Oriented Investors Different? Evidence from Equity Crowdfunding ( 2020). CESifo Working Paper No. 8339, Available at SSRN: https://ssrn.com/abstract=3623674

Lars Hornuf (Contact Author)

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany
+49 89 20348619 (Phone)

HOME PAGE: http://www.hornuf.com

Max Planck Institute for Innovation and Competition ( email )

Marstallplatz 1
Munich, Bayern 80539
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Eliza Stenzhorn

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany

Tim Vintis

University of Bremen - Faculty of Business Studies and Economics ( email )

Bremen, D-28359
Germany

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