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The impact of economic policy uncertainty on crowdfunding success

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  • Hsieh, Hui-Ching
  • Vu, Thi Huyen Chi

Abstract

This study provides the first investigation into how reward-based crowdfunding is influenced by economic policy uncertainty (EPU), one of the most important macroeconomic factors today. Strikingly, EPU is found to be positively linked to crowdfunding success and the crowdfunding market, in completely contrast to most financial activities, which are adversely affected by EPU. We further examine what, and how, factors may alter the relation between the EPU index and crowdfunding. We also conduct an analysis on the aggregate demand for crowdfunding, showing that more projects and larger amounts of capital are launched and requested when EPU is high. Overall, our research documents the significance of macroeconomic elements as predictors of crowdfunding success.

Suggested Citation

  • Hsieh, Hui-Ching & Vu, Thi Huyen Chi, 2021. "The impact of economic policy uncertainty on crowdfunding success," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:intfin:v:75:y:2021:i:c:s1042443121001335
    DOI: 10.1016/j.intfin.2021.101418
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    2. Rama, Ali & Jiang, Chunxia & Johan, Sofia & Liu, Hong & Mai, Yong, 2022. "Religious and social narratives and crowdfunding success," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    3. Lenny Phulong Mamaro & Athenia Bongani Sibindi, 2022. "Financial Sustainability of African Small-to-Medium Enterprises during the COVID-19 Pandemic: Determinants of Crowdfunding Success," Sustainability, MDPI, vol. 14(23), pages 1-14, November.
    4. Zeng, Qing & Lu, Xinjie & Dong, Dayong & Li, Pan, 2022. "Category-specific EPU indices, macroeconomic variables and stock market return predictability," International Review of Financial Analysis, Elsevier, vol. 84(C).
    5. Bai, Chenjiang & Duan, Yuejiao & Fan, Xiaoyun & Tang, Shuai, 2023. "Financial market sentiment and stock return during the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 54(C).

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    More about this item

    Keywords

    Crowdfunding; Reward-based; Success; Economic policy uncertainty;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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