Limitations of imitation: Lessons from another Bitcoin copycat

Daniel Cahill and Liu, Zhangxin (Frank)

Journal of Corporate Finance, 2021, vol. 69, issue C

Abstract: We find strong evidence that imitation to the leader in an uncertain environment provides short-term early success without enhancing long-term survival. Using a unique setting in cryptocurrencies where Bitcoin has been the centre focus, we define copycats as cryptocurrencies that have a name similar to Bitcoin. Our results show copycats earn higher returns in the first day and first week of trading but have a lower survival rate comparing to non-copycats and are robust to alternative definitions of copycat and an instrumental variable. Our results highlight that in an uncertain market created by a novel technology, the name of an organization may be a strong signal to investors when other signals are unclear.

Keywords: Copycats; New ventures; Imitation; Cryptocurrency; Blockchain (search for similar items in EconPapers)
JEL-codes: G10 G40 L10 L20 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:69:y:2021:i:c:s0929119921001139

DOI: 10.1016/j.jcorpfin.2021.101992

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