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Beyond financing: crowdfunding as an informational mechanism

Jordana Viotto da Cruz

Journal of Business Venturing, 2018, vol. 33, issue 3, 371-393

Abstract: Besides providing financial support for new ventures, crowdfunding can bring additional advantages for entrepreneurs. In this paper, we test the hypothesis that crowdfunding also serves as an informational mechanism. Using a unique dataset built with publicly available data from Internet-based sources, and after controlling for alternative explanations, we empirically show that when not successful on crowdfunding, thus not accessing capital, project owners may decide to release the product in the market if contributions suggest positive valuation from the “crowd”.

Keywords: Crowdfunding; Information; Uncertainty; E-commerce; New product release (search for similar items in EconPapers)
JEL-codes: D83 G21 L15 L26 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:jbvent:v:33:y:2018:i:3:p:371-393