1,721,000 research outputs found
Crowdfunding European Business
No full textThe main source of financing for European businesses (in some countries more than others) is still bank credit. However, following Basel III and the introduction of the ratings-based approach, it has become increasingly expensive for businesses to obtain capital from banks – both economically and in terms of time. In this context, one of the needs to be addressed is certainly the strengthening of the equity ratio which has a positive impact on the rating and solvency of the company. Another important challenge is to find and use alternative or supplementary forms to bank credit.
Taking this into consideration, this book is intended as a means to reframe contemporary issues surrounding corporate finance and develop relevant knowledge to help companies succeed when it comes to securing the means to grow. Relying on the work of different academics, practitioners, and institutions, this book aims to provide a systematic understanding of crowdfunding as a substitute or complement to other forms of entrepreneurial finance and also to emphasise some misunder- standings surrounding the crowdfunding industry and its future evolution
Building an entrepreneurial ecosystem based on crowdfunding in Europe: the role of public policy
No full textPurpose – The purpose of this paper is to assess the role that public policies may have in re-shaping entrepreneurial ecosystems and supporting the creation of functioning ecosystems based on new forms of finance, i.e. the equity-based crowdfunding.
Design/methodology/approach – The paper first identifies and examines the European policies developed to encourage the use of equity crowdfunding in entrepreneurial finance from 2003 to 2018. Then, it reviews national regulatory frameworks for crowdfunding, and analyses the barriers that constrain the growth of national crowdfunding markets. Finally, the paper addresses the issue of regulatory harmonisation by underlining its importance in building an entrepreneurial ecosystem based on crowdfunding.
Findings – Building an entrepreneurial ecosystem based on crowdfunding requires better policy coordination between European countries and readiness to take concerted actions. National authorities must look at the crowdfunding phenomenon from a European perspective and align their policies. European policymakers must import best practices from thriving national ecosystems by implementing less bureaucratic policies and with greater impact on entrepreneurial activity.
Social implications – In a post-crisis economy, the architecture of entrepreneurial ecosystems must evolve and focus on new financing alternatives ensuring the survival of successful businesses. Originality/value – The paper offers a new perspective on entrepreneurship looking at the formation and development of new ecosystems around equity crowdfunding platforms. It also provides a relevant starting point for subsequent studies into this field
Tackling Gender Bias in Equity Crowdfunding: An Exploratory Study of Investment Behaviour of Latin American Investors
Full text linkPurpose - Belonging to the financial technologies (FinTech) companies, equity-based crowdfunding platforms offer investors the opportunity to become shareholders through the purchase of small equity stakes of new innovative ventures. This paper investigates gender-related differences in the behaviour of investors in firms seeking equity financing in Latin America. Design/methodology/approach - Using a unique database, with combined information from different equity crowdfunding platforms in Brazil, Chile, and Mexico, we study the population of 492 projects between 2013-2017. To analyse the relationship between investors’ gender-related differences and equity crowdfunding investment this paper applies Poisson regression. Findings - Results suggest that the probability that an investor finances a firm is based on gender bias. Investors prefer firms led by entrepreneurs that are similar to them in terms of gender. Furthermore, we find evidence that both female and male investors are risk-averse and are more likely to invest in the equity of firms that are older and offer a higher percentage of equity. However, female investors are associated with firms that are on average older and offer 0.02% more equity. Practical implications – These findings have implications for crowdfunding platforms managers when selecting their target companies and policymakers when defining political actions to promote greater use of equity crowdfunding among female entrepreneurs and decrease barriers hindering women’s access to investment. Originality/value - Unique in its proposition and data usage, this study sheds light on the relationship between investors and entrepreneurs in the Latin American equity crowdfunding market
At the nexus of circular economy, equity crowdfunding and renewable energy sources: Are enterprises from green countries more performant?
No full textCircular economy proposes paradigm shifts from linear production patterns. Entrepreneurs can highly benefit from fresh models driven by industrial symbiosis. In this setting, renewable energy is a prime asset for fostering circular economy and sustainable development. Equity crowdfunding can assist this transition, proposing an array of possibilities for supporting green entrepreneurship. The inquiry at hand is the first exercise linking circular economy, renewable energy and equity crowdfunding. This work tests whether the deal value of an equity-based crowdfunding campaign is higher in countries with renewable energy orientation. It is made use of probit model estimations. One may observe that being a firm from a country consuming large proportions of renewable energy is positively associated with higher crowdfunding performance. Conversely, when a company is located in a country which has large shares/ratios of renewable electricity production, it usually gets modest results when compared to its international competitors. Lower deal values are also attributed to firms situated in countries relying on biomass use. The solidity of the analyses is ensured by robustness tests. The outcomes may elicit policy and research formulation on environmental sustainability and business success at micro/macro levels – of primary importance to illuminate energy, circular economy and ecological transitions
Does competition affect ESG controversies? Evidence from the banking industry
No full textThis study empirically investigates the link between competition (measured by the Lerner index) and banks’ Environmental, Social, and Governance Controversies (ESGC). Using a logit regression analysis on a sample of European banks over the period 2010–2020, we find that banks respond to increased competitive pressure from consumers and competitors by avoiding their engagement in ESG controversies that can undermine their reputation. Overall, these results highlight that competition is an important factor that stimulates banks’ sustainability practices in order to preserve their competitive advantage. These findings are robust and hold for alternative measures of market competition and ESG controversies
Assessing the effects of anti-corruption law on entrepreneurial finance: evidence from Latin America.
No full textCorruption normally causes distrust among investors and can negatively affect investments. Particularly in Latin America, decline of investments is one of the most significant problems. In such a context, anti-corruption laws can both fight corruption and promote business, restoring investors’ trust. In this article, we ask whether the introduction of an anti-corruption framework affecting both the public and private spheres is able to increase investors’ confidence in a new form of investment, that is, equity crowdfunding. By using a unique database, with combined information from different platforms in Brazil, Chile and Mexico, we study the population of 492 projects between 2013 and 2017. Implementing a set of linear probability regressions, we find that the new Mexican anti-corruption law has increased the probability of success of equity crowdfunding projects in this country
ESG disruptive innovation. A literature review of ESG rating, regulation, and financial institutions’ business practices
No full textThis chapter analyses the theoretical foundations of ESG criteria and their relevance for transforming the economy and finance. It examines the centrality of ESG considerations in the functioning of financial institutions’ investor and regulator adoption by reviewing the peer-reviewed studies. It argues how ESG ratings continue to provide an understanding of credit decisions and broader risk management frameworks but also highlights that greenwashing and lack of consistency in climate risk assessment mark significant challenges ahead
Financing the cultural and creative industries through crowdfunding: the role of national cultural dimensions and policies
Full text linkThe trend towards digitalisation and technological innovation has reshaped the cultural and creative industries (CCIs) by changing the existing funding models and structures. The aim of this article is to explore the impact of cultural dimensions and policies on the adoption of reward-based crowdfunding as a new form of finance for firms in the CCIs in 12 different European countries during the 2015–2019 period. Our results show that national cultural dimensions and policies significantly affect the demand for cultural and creative crowdfunding. Specifically, the adoption of crowdfunding is broader in individualistic countries and in societies characterised by higher uncertainty avoidance, indulgence, short-term orientation, and lower levels of discrimination between genders. Furthermore, we find that the liberal welfare state model, characterised by limited government interference, market orientation, privatisation and a focus on self-responsibility, and the Southern European welfare model, based on a weak and inefficient state, increase the adoption of crowdfunding in the CCIs. The presence of a central ministry with cultural competence also increases the adoption of crowdfunding in the CCIs. Our findings show a U-shaped relationship between European grants and the demand for crowdfunding, mainly driven by a high or low European involvement within these sectors. We also identify a moderation effect of EU grants on the relationship between cultural dimensions and crowdfunding adoption, suggesting that the magnitude of this relationship depends on the amount of EU grants awarded in a specific country. As a robustness check, we run a set of Poisson regressions with correlated random effects (CREs), confirming our main results
Does a rising tide lift all boats? An empirical analysis of the relationship between country digitalization and low-tech SMEs performance
No full textThe impact of corruption on companies' engagement in sustainability reporting practices: An empirical examination
Full text linkPurpose – This paper aims to investigate whether the perceived level of corruption influences companies’
decision to address principles and standards aimed, inter alia, at fighting corruption [i.e. Sustainable
Development Goals (SDGs), (2) United Nations Global Compact (UNGC), (3) International Standards
Organisation (ISO) 26,000 and (4) Organisation for Economic Co-operation and Development (OECD)
Guidelines] in companies’ sustainability reporting.
Design/methodology/approach – The paper uses a sample of 1,171 sustainability reports published in the
year 2017 by organisations from Asia and Africa’s low- and middle-income countries.
Findings – Results from the Probit model reveal that corruption negatively affects corporate sustainability
reporting activity. Indeed, the more companies are exposed to high levels of corruption, the less likely they
appear to engage in sustainability reporting. Furthermore, the authors find clear regional and sector-level
differences in the extent to which companies engage in sustainability reporting. The results show that
Asian companies operating in the agricultural and financial services sectors exhibit significantly higher
reporting activity, whilst those operating in the construction and mining sectors report less than the
sectors’ peers.
Research limitations/implications – The authors’ findings provide important implications for
understanding companies’ behaviour in the sustainability reporting in emerging economies as well as for
designing corporate social responsibility (CSR) disclosure initiatives in the future.
Originality/value – This paper provides a better understanding of the impact of corruption on companies’
reporting behaviour in the context of emerging economies
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