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The “C” in crowdfunding is for co-financing: exploring participative co-financing, a complement of novel and traditional bank financing

Author

Listed:
  • Carolin Bock

    (Technische Universität Darmstadt)

  • Sven Siebeneicher

    (Technische Universität Darmstadt)

  • Jens Rockel

    (Fraunhofer Center for International Management and Knowledge Economy)

Abstract

We explore the potentials of participative co-financing as a means for regional banks to integrate an innovative financing technique that enhances their strengths. Our goal is to interest platform operators, decision-makers of regional banks, and researchers in the potentials of participative co-financing. We define participative co-financing as capital provision, where professional financing sources provide one part, and the other is supplied via participative crowdfunding. We claim that crowdfunding and regional banks are compatible by common interests. We explore potentials emanating at the intersection of both fields by drawing on entrepreneurship and finance literature. Eventually, we bridge the gap between both fields of research. To guide our research, we develop a framework featuring the intersection of crowdfunding and regional banks. We ask: Which potentials affect the intentions of decision-makers in regional banks to offer participative co-financing? The technology acceptance model (TAM) provides a theoretical foundation for our analysis. We conduct a twofold analysis by looking at the direct effects of potentials first and acceptance according to the TAM second. Thereby we consider the intention to offer lending- and equity-based co-financing. We surveyed decision-makers from an association of German savings banks and derived 108 answers. We show that regional banks generally accept participative co-financing as an innovative financing technique. The most likely model is lending-based co-financing, with individual persons, startups, and SMEs as target groups. Decision-makers hope to profit from cross-selling and being perceived as innovative. Nevertheless, further research and trials are necessary to advance participative co-financing.

Suggested Citation

  • Carolin Bock & Sven Siebeneicher & Jens Rockel, 2022. "The “C” in crowdfunding is for co-financing: exploring participative co-financing, a complement of novel and traditional bank financing," Journal of Business Economics, Springer, vol. 92(9), pages 1559-1602, November.
    • Handle: RePEc:spr:jbecon:v:92:y:2022:i:9:d:10.1007_s11573-022-01112-w
    DOI: 10.1007/s11573-022-01112-w
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    References listed on IDEAS

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    Cited by:

    1. Wolfgang Breuer & Andreas Pfingsten, 2022. "Non-standard issues in business finance: an overview," Journal of Business Economics, Springer, vol. 92(9), pages 1417-1430, November.
    2. Maiolini, Riccardo & Cappa, Francesco & Franco, Stefano & Quaratino, Giovanni Raimondo, 2024. "The impact of sustainable development goals in lending-based prosocial crowdfunding: A topic modeling analysis on the kiva platform," International Review of Financial Analysis, Elsevier, vol. 95(PB).

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    More about this item

    Keywords

    Banking; Co-financing; Crowdfunding; Crowdinvesting; Financing; Participation;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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