IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v184y2022ics0040162522005261.html
   My bibliography  Save this article

A topic modelling analysis of white papers in security token offerings: Which topic matters for funding?

Author

Listed:
  • Bongini, Paola
  • Osborne, Francesco
  • Pedrazzoli, Alessia
  • Rossolini, Monica

Abstract

Security token offerings (STOs), based on blockchain technology, are attracting increasing attention as an innovative alternative means of venture financing. Information about specific STOs is generally provided in white papers. This study analyses the content of white papers using a unique sample of 188 STOs from 2017 to 2021 to identify which topic is related to campaign success. We leverage latent Dirichlet allocation (LDA) topic modelling to identify the topics and themes in white papers. Nine topics are identified through LDA: company description, distributed ledger technology components, energy and green issues, financial and legal issues, artificial intelligence, and tech applications in different industries—specifically, healthcare, manufacturing and construction, education, and financial services. We find that energy and green issues represent one of the most prominent topics among all types of projects and that their disclosure is positively related to the probability of campaign success and the amount of funding raised. Another prominent topic that affects campaign outcomes is technology in the healthcare industry, reflecting wider investment trends in this sector. Our results may help entrepreneurs to improve their campaign disclosures and present new issues for policymakers regarding investments in digital tokens.

Suggested Citation

  • Bongini, Paola & Osborne, Francesco & Pedrazzoli, Alessia & Rossolini, Monica, 2022. "A topic modelling analysis of white papers in security token offerings: Which topic matters for funding?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:tefoso:v:184:y:2022:i:c:s0040162522005261
    DOI: 10.1016/j.techfore.2022.122005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162522005261
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2022.122005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Adhami, Saman & Giudici, Giancarlo & Martinazzi, Stefano, 2018. "Why do businesses go crypto? An empirical analysis of initial coin offerings," Journal of Economics and Business, Elsevier, vol. 100(C), pages 64-75.
    2. Fisch, Christian & Masiak, Christian & Vismara, Silvio & Block, Joern, 2021. "Motives and profiles of ICO investors," Journal of Business Research, Elsevier, vol. 125(C), pages 564-576.
    3. Hou, Jianchao & Wang, Che & Luo, Sai, 2020. "How to improve the competiveness of distributed energy resources in China with blockchain technology," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    4. Taejun (David) Lee & TaiWoong Yun & Eric Haley, 2017. "What You Think You Know: The Effects of Prior Financial Education and Readability on Financial Disclosure Processing," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 18(2), pages 125-142, April.
    5. Samieifar, Shadi & Baur, Dirk G., 2021. "Read me if you can! An analysis of ICO white papers," Finance Research Letters, Elsevier, vol. 38(C).
    6. Loughran, Tim & McDonald, Bill, 2013. "IPO first-day returns, offer price revisions, volatility, and form S-1 language," Journal of Financial Economics, Elsevier, vol. 109(2), pages 307-326.
    7. Bellavitis, Cristiano & Fisch, Christian & Wiklund, Johan, 2021. "A comprehensive review of the global development of initial coin offerings (ICOs) and their regulation," Journal of Business Venturing Insights, Elsevier, vol. 15(C).
    8. Savin, Ivan & Ott, Ingrid & Konop, Chris, 2022. "Tracing the evolution of service robotics: Insights from a topic modeling approach," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    9. Kathleen Weiss Hanley, 2010. "The Information Content of IPO Prospectuses," The Review of Financial Studies, Society for Financial Studies, vol. 23(7), pages 2821-2864, July.
    10. Anton Miglo, 2021. "STO vs. ICO: A Theory of Token Issues under Moral Hazard and Demand Uncertainty," JRFM, MDPI, vol. 14(6), pages 1-35, May.
    11. Fisch, Christian, 2019. "Initial coin offerings (ICOs) to finance new ventures," Journal of Business Venturing, Elsevier, vol. 34(1), pages 1-22.
    12. Isabel Lourenço & Jeffrey Callen & Manuel Branco & José Curto, 2014. "The Value Relevance of Reputation for Sustainability Leadership," Journal of Business Ethics, Springer, vol. 119(1), pages 17-28, January.
    13. Stephen Brammer & Stephen Pavelin, 2008. "Factors influencing the quality of corporate environmental disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 17(2), pages 120-136, February.
    14. Tom Arnold & Raymond P.H. Fishe & David North, 2010. "The Effects of Ambiguous Information on Initial and Subsequent IPO Returns," Financial Management, Financial Management Association International, vol. 39(4), pages 1497-1519, December.
    15. Zhang, Shuyu & Aerts, Walter & Lu, Liping & Pan, Huifeng, 2019. "Readability of token whitepaper and ICO first-day return," Economics Letters, Elsevier, vol. 180(C), pages 58-61.
    16. Sabrina T Howell & Marina Niessner & David Yermack & Jiang Wei, 2020. "Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales," The Review of Financial Studies, Society for Financial Studies, vol. 33(9), pages 3925-3974.
    17. Butticè, Vincenzo & Colombo, Massimo G. & Fumagalli, Elena & Orsenigo, Carlotta, 2019. "Green oriented crowdfunding campaigns: Their characteristics and diffusion in different institutional settings," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 85-97.
    18. Joern H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 2021. "The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings," Small Business Economics, Springer, vol. 57(2), pages 865-882, August.
    19. Lennart Ante & Philipp Sandner & Ingo Fiedler, 2018. "Blockchain-Based ICOs: Pure Hype or the Dawn of a New Era of Startup Financing?," JRFM, MDPI, vol. 11(4), pages 1-19, November.
    20. Winifred Huang & Michele Meoli & Silvio Vismara, 2020. "The geography of initial coin offerings," Small Business Economics, Springer, vol. 55(1), pages 77-102, June.
    21. Jan Heinrich Beinke & Kai Rohde & Fabian Pohl & Frank Teuteberg, 2021. "Exploring the Success Factors of Security Token Offerings: An Empirical Approach," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 20(05), pages 1339-1362, September.
    22. Mark A Chen & Qinxi Wu & Baozhong Yang, 2019. "How Valuable Is FinTech Innovation?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 2062-2106.
    23. Joern H. Block & Massimo G. Colombo & Douglas J. Cumming & Silvio Vismara, 2018. "New players in entrepreneurial finance and why they are there," Small Business Economics, Springer, vol. 50(2), pages 239-250, February.
    24. Apolline Blandin & Ann Sofie Cloots & Hatim Hussain & Michel Rauchs & Rasheed Saleuddin & Jason Grant Allen & Katherine Cloud & Bryan Zheng Zhang, 2019. "Global Cryptoasset Regulatory Landscape Study," Cambridge Centre for Alternative Finance Reports -201904-gcrls, Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge.
    25. Cormier, Denis & Magnan, Michel, 2007. "The revisited contribution of environmental reporting to investors' valuation of a firm's earnings: An international perspective," Ecological Economics, Elsevier, vol. 62(3-4), pages 613-626, May.
    26. Zhang, Hao & Daim, Tugrul & Zhang, Yunqiu (Peggy), 2021. "Integrating patent analysis into technology roadmapping: A latent dirichlet allocation based technology assessment and roadmapping in the field of Blockchain," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    27. Peter Roosenboom & Tom van der Kolk & Abe de Jong, 2020. "What determines success in initial coin offerings?," Venture Capital, Taylor & Francis Journals, vol. 22(2), pages 161-183, June.
    28. Johannes Sedlmeir & Hans Ulrich Buhl & Gilbert Fridgen & Robert Keller, 2020. "The Energy Consumption of Blockchain Technology: Beyond Myth," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 62(6), pages 599-608, December.
    29. Thomas Bourveau & Emmanuel T. De George & Atif Ellahie & Daniele Macciocchi, 2022. "The Role of Disclosure and Information Intermediaries in an Unregulated Capital Market: Evidence from Initial Coin Offerings," Journal of Accounting Research, Wiley Blackwell, vol. 60(1), pages 129-167, March.
    30. Li, Munan & Wang, Wenshu & Zhou, Keyu, 2021. "Exploring the technology emergence related to artificial intelligence: A perspective of coupling analyses," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    31. Florysiak, David & Schandlbauer, Alexander, 2022. "Experts or charlatans? ICO analysts and white paper informativeness," Journal of Banking & Finance, Elsevier, vol. 139(C).
    32. Feng Gu & John Q. Li, 2007. "The Credibility of Voluntary Disclosure and Insider Stock Transactions," Journal of Accounting Research, Wiley Blackwell, vol. 45(4), pages 771-810, September.
    33. Verrecchia, Robert E., 1990. "Information quality and discretionary disclosure," Journal of Accounting and Economics, Elsevier, vol. 12(4), pages 365-380, March.
    34. Yen, Ju-Chun & Wang, Tawei, 2021. "Stock price relevance of voluntary disclosures about blockchain technology and cryptocurrencies," International Journal of Accounting Information Systems, Elsevier, vol. 40(C).
    35. Ming-Yeu Wang & Hsien-Chen Lo & Yu-Yin Liao, 2015. "Knowledge Flow Determinants of Patent Value: Evidence from Taiwan and South Korea Biotechnology Patents," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 12(03), pages 1-18.
    36. Cahill, Daniel & G. Baur, Dirk & (Frank) Liu, Zhangxin & W. Yang, Joey, 2020. "I am a blockchain too: How does the market respond to companies’ interest in blockchain?," Journal of Banking & Finance, Elsevier, vol. 113(C).
    37. Beatty, Randolph P. & Ritter, Jay R., 1986. "Investment banking, reputation, and the underpricing of initial public offerings," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 213-232.
    38. Glaeser, Stephen, 2018. "The effects of proprietary information on corporate disclosure and transparency: Evidence from trade secrets," Journal of Accounting and Economics, Elsevier, vol. 66(1), pages 163-193.
    39. Arora, Jagriti & Chakraborty, Madhumita, 2021. "Does the ease of reading of financial disclosures influence investment decision?," Economics Letters, Elsevier, vol. 204(C).
    40. Vismara, Silvio, 2019. "Sustainability in equity crowdfunding," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 98-106.
    41. Meoli, Michele & Vismara, Silvio, 2022. "Machine-learning forecasting of successful ICOs," Journal of Economics and Business, Elsevier, vol. 121(C).
    42. Sudipto Bhattacharya & Jay R. Ritter, 1983. "Innovation and Communication: Signalling with Partial Disclosure," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(2), pages 331-346.
    43. repec:eme:aaaj00:09513579610109987 is not listed on IDEAS
    44. Fisch, Christian & Momtaz, Paul P., 2020. "Institutional investors and post-ICO performance: an empirical analysis of investor returns in initial coin offerings (ICOs)," Journal of Corporate Finance, Elsevier, vol. 64(C).
    45. Ju‐Chun Yen & Tawei Wang & Yu‐Hung Chen, 2021. "Different is better: how unique initial coin offering language in white papers enhances success," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5309-5340, December.
    46. Diamond, Douglas W & Verrecchia, Robert E, 1991. "Disclosure, Liquidity, and the Cost of Capital," Journal of Finance, American Finance Association, vol. 46(4), pages 1325-1359, September.
    47. Maximilian Klöckner & Christoph G. Schmidt & Stephan M. Wagner, 2022. "When Blockchain Creates Shareholder Value: Empirical Evidence from International Firm Announcements," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 46-64, January.
    48. Goran Calic & Elaine Mosakowski, 2016. "Kicking Off Social Entrepreneurship: How A Sustainability Orientation Influences Crowdfunding Success," Journal of Management Studies, Wiley Blackwell, vol. 53(5), pages 738-767, July.
    49. Ivan Savin & Stefan Drews & Sara Maestre-Andrés & Jeroen Bergh, 2020. "Public views on carbon taxation and its fairness: a computational-linguistics analysis," Climatic Change, Springer, vol. 162(4), pages 2107-2138, October.
    50. Chunguang Bai & Joseph Sarkis, 2020. "A supply chain transparency and sustainability technology appraisal model for blockchain technology," International Journal of Production Research, Taylor & Francis Journals, vol. 58(7), pages 2142-2162, April.
    51. Savin, Ivan & Drews, Stefan & van den Bergh, Jeroen, 2021. "Free associations of citizens and scientists with economic and green growth: A computational-linguistics analysis," Ecological Economics, Elsevier, vol. 180(C).
    52. Akyildirim, Erdinc & Corbet, Shaen & Sensoy, Ahmet & Yarovaya, Larisa, 2020. "The impact of blockchain related name changes on corporate performance," Journal of Corporate Finance, Elsevier, vol. 65(C).
    53. Roberts, Robin W., 1992. "Determinants of corporate social responsibility disclosure: An application of stakeholder theory," Accounting, Organizations and Society, Elsevier, vol. 17(6), pages 595-612, August.
    54. Ana Simpson & Ane Tamayo, 2020. "Real effects of financial reporting and disclosure on innovation," Accounting and Business Research, Taylor & Francis Journals, vol. 50(5), pages 401-421, July.
    55. Stephanie F. Cheng & Gus De Franco & Haibo Jiang & Pengkai Lin, 2019. "Riding the Blockchain Mania: Public Firms’ Speculative 8-K Disclosures," Management Science, INFORMS, vol. 65(12), pages 5901-5913, December.
    56. Farzad Saidi & Alminas Žaldokas, 2021. "How Does Firms’ Innovation Disclosure Affect Their Banking Relationships?," Management Science, INFORMS, vol. 67(2), pages 742-768, February.
    57. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chung, Kenneth Hsien Yung & Li, Dan & Adriaens, Peter, 2023. "Technology-enabled financing of sustainable infrastructure: A case for blockchains and decentralized oracle networks," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    2. Sun, Yan & Yang, Sung-Byung, 2024. "Are ICOs the best? A comparison of different fundraising models in blockchain-based fundraising," Journal of Financial Stability, Elsevier, vol. 73(C).
    3. Oana Marin & Tudor Cioara & Liana Toderean & Dan Mitrea & Ionut Anghel, 2023. "Review of Blockchain Tokens Creation and Valuation," Future Internet, MDPI, vol. 15(12), pages 1-27, November.
    4. Gartner, Johannes & Moro, Andrea, 2024. "C-level managers and born-digitals' scaling: The case of Initial Coin Offerings (ICOs)," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    5. Ernest Barceló & Katarina Dimić-Mišić & Monir Imani & Vesna Spasojević Brkić & Michael Hummel & Patrick Gane, 2023. "Regulatory Paradigm and Challenge for Blockchain Integration of Decentralized Systems: Example—Renewable Energy Grids," Sustainability, MDPI, vol. 15(3), pages 1-27, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sun, Yan & Yang, Sung-Byung, 2024. "Are ICOs the best? A comparison of different fundraising models in blockchain-based fundraising," Journal of Financial Stability, Elsevier, vol. 73(C).
    2. Muneer M. Alshater & Mayank Joshipura & Rim El Khoury & Nohade Nasrallah, 2023. "Initial Coin Offerings: a Hybrid Empirical Review," Small Business Economics, Springer, vol. 61(3), pages 891-908, October.
    3. Xia, Feilian & Thewissen, James & Shrestha, Prabal & Yan, Shuo, 2024. "The power of a name: Exploring the relationship between ICO name fluency and investor decision making," International Review of Financial Analysis, Elsevier, vol. 93(C).
    4. Shih‐Chu Chou & Zhe‐An Li & Tawei Wang & Ju‐Chun Yen, 2023. "How the quality of initial coin offering white papers influences fundraising: Using security token offerings white papers as a benchmark," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 30(1), pages 3-18, January.
    5. Mansouri, Sasan & Momtaz, Paul P., 2022. "Financing sustainable entrepreneurship: ESG measurement, valuation, and performance," Journal of Business Venturing, Elsevier, vol. 37(6).
    6. Chitsazan, Hasti & Bagheri, Afsaneh & Tajeddin, Mahdi, 2022. "Initial coin offerings (ICOs) success: Conceptualization, theories and systematic analysis of empirical studies," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    7. Paul P. Momtaz, 2024. "Decentralized finance (DeFi) markets for startups: search frictions, intermediation, and the efficiency of the ICO market," Small Business Economics, Springer, vol. 63(4), pages 1415-1447, December.
    8. Carolina Camassa, 2023. "Legal NLP Meets MiCAR: Advancing the Analysis of Crypto White Papers," Papers 2310.10333, arXiv.org, revised Oct 2023.
    9. Meoli, Michele & Vismara, Silvio, 2022. "Machine-learning forecasting of successful ICOs," Journal of Economics and Business, Elsevier, vol. 121(C).
    10. Wang, Tong & Zhao, Sheng & Zhou, Mengqiu, 2022. "Does soft information in expert ratings curb information asymmetry? Evidence from crowdfunding and early transaction phases of Initial Coin offerings," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 81(C).
    11. Anton Miglo, 2022. "Choice between IEO and ICO: Speed vs. Liquidity vs. Risk," FinTech, MDPI, vol. 1(3), pages 1-18, September.
    12. Luisa Faust & Maura Kolbe & Sasan Mansouri & Paul P. Momtaz, 2022. "The Crowdfunding of Altruism," JRFM, MDPI, vol. 15(3), pages 1-29, March.
    13. Alexander Guzmán & Cristian Pinto-Gutiérrez & María-Andrea Trujillo, 2020. "Attention to Global Warming and the Success of Environmental Initial Coin Offerings: Empirical Evidence," Sustainability, MDPI, vol. 12(23), pages 1-16, November.
    14. Florysiak, David & Schandlbauer, Alexander, 2022. "Experts or charlatans? ICO analysts and white paper informativeness," Journal of Banking & Finance, Elsevier, vol. 139(C).
    15. Maksim Belitski & Dmitri Boreiko, 2022. "Success factors of initial coin offerings," The Journal of Technology Transfer, Springer, vol. 47(6), pages 1690-1706, December.
    16. Thewissen, James & Shrestha, Prabal & Torsin, Wouter & Pastwa, Anna M., 2022. "Unpacking the black box of ICO white papers: A topic modeling approach," Journal of Corporate Finance, Elsevier, vol. 75(C).
    17. Pastwa, Anna M. & Shrestha, Prabal & Thewissen, James & Torsin, Wouter, 2021. "Unpacking the black box of ICO white papers: a topic modeling approach," LIDAM Discussion Papers LFIN 2021018, Université catholique de Louvain, Louvain Finance (LFIN).
    18. de Andrés, Pablo & Arroyo, David & Correia, Ricardo & Rezola, Alvaro, 2022. "Challenges of the market for initial coin offerings," International Review of Financial Analysis, Elsevier, vol. 79(C).
    19. Feilian Xia & James Thewissen & Winifred Huang & Shuo Yan, 2024. "Founder-CEO Extraversion and Sustainability Orientation in Initial Coin Offerings," Entrepreneurship Theory and Practice, , vol. 48(4), pages 941-980, July.
    20. Lars Hornuf & Theresa Kück & Armin Schwienbacher, 2022. "Initial coin offerings, information disclosure, and fraud," Small Business Economics, Springer, vol. 58(4), pages 1741-1759, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:184:y:2022:i:c:s0040162522005261. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.