Friend or Foe? Crowdfunding Versus Credit when Banks are Stressed

Daniel Blaseg and Michael Koetter

No 8/2015, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Does bank instability push borrowers to use crowdfunding as a source of external finance? We identify stressed banks and link them to a unique, manually constructed sample of 157 new ventures seeking equity crowdfunding. The sample comprises projects from all German equity crowdfunding platforms since 2011, which we compare with 200 ventures that do not use crowdfunding. Crowdfunding is significantly more likely for new ventures that interact with stressed banks. Innovative funding is thus particularly relevant when conventional financiers are facing crises. But crowdfunded ventures are generally also more opaque and risky than new ventures that do not use crowdfunding.

Keywords: equity crowdfunding; credit crunch; bank stress (search for similar items in EconPapers)
JEL-codes: G01 G21 G30 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ban, nep-ent, nep-ppm and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:iwh-8-15

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