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Beyond financing: crowdfunding as an informational mechanism

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  • Viotto da Cruz, Jordana

Abstract

Besides providing financial support for new ventures, crowdfunding can bring additional advantages for entrepreneurs. In this paper, we test the hypothesis that crowdfunding also serves as an informational mechanism. Using a unique dataset built with publicly available data from Internet-based sources, and after controlling for alternative explanations, we empirically show that when not successful on crowdfunding, thus not accessing capital, project owners may decide to release the product in the market if contributions suggest positive valuation from the “crowd”.

Suggested Citation

  • Viotto da Cruz, Jordana, 2018. "Beyond financing: crowdfunding as an informational mechanism," Journal of Business Venturing, Elsevier, vol. 33(3), pages 371-393.
    • Handle: RePEc:eee:jbvent:v:33:y:2018:i:3:p:371-393
    DOI: 10.1016/j.jbusvent.2018.02.001
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    More about this item

    Keywords

    Crowdfunding; Information; Uncertainty; E-commerce; New product release;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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