COVID-19 and Entrepreneurial Processes in U.S. Equity Crowdfunding

Journal of Small Business Management 2022

42 Pages Posted: 13 Apr 2022

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Robert Reardon

Florida Atlantic University

Multiple version iconThere are 3 versions of this paper

Date Written: March 21, 2022

Abstract

The COVID-19 pandemic brought about a shift in entrepreneurial opportunities in the United States. In this paper, we proxy entrepreneurial processes by examining housing prices in different regions of the United States. Housing prices capture the movement in people, tax dynamics, and behavioral preferences for equity ownership in different regions and over time, all of which were drastically impacted by COVID-19. We examine all U.S. equity crowdfunding offerings starting with the very first offerings in 2016 Q2 until 2021 Q1 based on data from the Securities and Exchange Commission. The data indicate that regional housing prices post the start of COVID-19 are a strong predictor of the number of equity crowdfunding campaigns and the amount of capital raised. Also, the impact of housing price changes on crowdfunding is more pronounced among more prosperous regions. The housing price effect is robust to numerous controls and consideration of outliers.

Keywords: Equity Crowdfunding, COVID-19, Regional Entrepreneurship

JEL Classification: G21, G28, G51

Suggested Citation

Cumming, Douglas J. and Reardon, Robert S., COVID-19 and Entrepreneurial Processes in U.S. Equity Crowdfunding (March 21, 2022). Journal of Small Business Management 2022, Available at SSRN: https://ssrn.com/abstract=4082500 or http://dx.doi.org/10.2139/ssrn.4082500

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/douglascumming/bio?authuser=0

Robert S. Reardon (Contact Author)

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://sites.google.com/view/robertsreardon

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