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Target for campaign success: an empirical analysis of equity crowdfunding in Japan

Author

Listed:
  • Yuji Honjo

    (Chuo University
    Research Institute of Economy, Trade and Industry)

  • Koki Kurihara

    (Chuo University)

Abstract

This study investigates campaign success in equity crowdfunding, using campaigns listed on a leading Japanese equity crowdfunding platform with an all-or-nothing rule. We examine how campaign success depends on campaign- and firm-specific characteristics, including the campaign target amount. We find that patenting positively affects campaign success and the campaign target amount. The results indicate that innovative firms have a higher probability of campaign success, while they set a higher target amount. We also provide evidence that campaigns that have already provided services and products have a lower probability of success, although not always significant, and firms tend to set a lower target amount. Moreover, campaigns launched by venture capital-backed firms are more likely to succeed than others. Furthermore, campaigns launched by firms eligible for the Angel Tax System, introduced in Japan as a tax incentive for investment in young and small firms, have a higher tendency to succeed in equity crowdfunding. Our findings suggest that the Angel Tax System attract more crowd investors and such tax incentives help raise funds on equity crowdfunding platforms for new businesses.

Suggested Citation

  • Yuji Honjo & Koki Kurihara, 2024. "Target for campaign success: an empirical analysis of equity crowdfunding in Japan," The Journal of Technology Transfer, Springer, vol. 49(3), pages 926-958, June.
  • Handle: RePEc:kap:jtecht:v:49:y:2024:i:3:d:10.1007_s10961-023-10010-4
    DOI: 10.1007/s10961-023-10010-4
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    More about this item

    Keywords

    Angel tax system; Campaign success; Equity crowdfunding; Patent; Target amount; Venture capital;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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