Geopolitical risk and crowdfunding performance

Naif Alsagr, Douglas Cumming, Justin G. Davis and Ahmed Sewaid

Journal of International Financial Markets, Institutions and Money, 2023, vol. 85, issue C

Abstract: The most pronounced risk that fund providers assume in rewards-based crowdfunding is reward delivery. Developing markets around the world exhibit geopolitical risks (GPR) that impact the likelihood that the rewards will be delivered. Hence, this points towards a potential association between GPR and the likelihood of successful crowdfunding financing. This paper examines 1,672 fundraising attempts from the 19 developing countries listed in the GPR index. The data indicate that GPR is negatively associated with the likelihood of crowdfunding success. Further, the evidence shows that entrepreneurs can moderate the costs of GPR via signaling and campaign disclosures. Implications for policymakers and entrepreneurs are discussed.

Keywords: Geopolitical risk; Uncertainty; Crowdfunding (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:85:y:2023:i:c:s1042443123000343

DOI: 10.1016/j.intfin.2023.101766

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