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Equity Crowdfunding: Brave Market or Safe Haven for the Crowd During the COVID-19 Crisis?

In: Financial Transformations Beyond the COVID-19 Health Crisis

Author

Listed:
  • Francesca Battaglia
  • Francesco Busato
  • Maria Manganiello

Abstract

This chapter explores the impact of the COVID-19 pandemic on the Italian equity crowdfunding sector by analyzing a full dataset of 437 Italian equity crowdfunding campaigns over the period 2014–2020 and focusing on a sub-sample of 79 projects posted on the websites of platforms from January 2020 to June 2020. In detail, we investigate whether and to what extent the key drivers (i.e. female founders, social capital, and equity offered) that brought backers to finance a specific project before COVID-19 are the same nowadays, and which type of ventures backers are more prone to finance via equity crowdfunding in the aftermath of the crisis. We provide evidence that the strength of the effect of our key variables on the campaign’s success has changed during the COVID-19 crisis. We also find that backers are more prone to finance companies with a high level of R&D expenditure and technological projects. Moreover, we point out that ventures not located in a red zone are more likely to be successfully financed by backers and that they are more willing to invest in projects launched in platforms implementing specific measures in response to COVID-19.

Suggested Citation

  • Francesca Battaglia & Francesco Busato & Maria Manganiello, 2022. "Equity Crowdfunding: Brave Market or Safe Haven for the Crowd During the COVID-19 Crisis?," World Scientific Book Chapters, in: Sabri Boubaker & Duc Khuong Nguyen (ed.), Financial Transformations Beyond the COVID-19 Health Crisis, chapter 14, pages 403-445, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781800610781_0014
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    Citations

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    Cited by:

    1. Nikolaos Daskalakis, 2023. "COVID-19 Effects on Reward-based Crowdfunding Campaigns," Business & Entrepreneurship Journal, SCIENPRESS Ltd, vol. 12(2), pages 1-6.
    2. Guillochon, Justine, 2022. "The role of media, policy and regional heterogeneity in renewable energy project crowdfunding," Energy Economics, Elsevier, vol. 115(C).

    More about this item

    Keywords

    COVID19; Pandemic; Pandemic Outbreak; Health Crisis; Economics; Macroeconomics; Finance; Sustainable Finance; Financial Crisis; Financial Integration; Economic Integration; Global Financial Crisis; Financial Institutions; Corporate Finance; Corporate Governance; Board of Directors; ESG; Corporate Social Responsibility; Sustainable Finance; Stock Markets; Financial Markets; Stock Market Behaviour; Firm Liquidity; Emerging Markets; China; Financial Institutions; Money; Banks; Banking System; Banking Sector; Business Groups; Resilience; Safe Heaven; Gold; Oil; Peer-to-Peer Lending Market; Foreign Trading; Stock Market Volatility; Extreme Events;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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