Signaling and perceiving on equity crowdfunding decisions — a machine learning approach

Jinjuan Yang, Jiayuan Xin, Yan Zeng and Pei Jose Liu ()
Additional contact information
Jinjuan Yang: Shanghai International Studies University
Jiayuan Xin: Newcastle University Business School, Newcastle University
Yan Zeng: University of the West of England
Pei Jose Liu: Newcastle University Business School, Newcastle University

Small Business Economics, 2025, vol. 65, issue 1, No 11, 315-356

Abstract: Abstract This study explores how signaling and perceiving jointly influence crowd investors’ decision-making. We utilize five machine learning models to assess the predictive power of various information types on crowdfunding success. Our findings indicate that investors prioritize well-structured quantitative data over complex qualitative content. Processing quantitative information is also found to be less cognitively taxing than extracting useful information from qualitative text and images. Entrepreneurs’ signaling and investors’ processing jointly reduce information asymmetry in crowdfunding, highlighting the critical yet often-overlooked role of investors’ information processing. Additionally, we test the policy effect of the ‘2016 Interim Measures on Online Lending’ on crowdfunding success by comparing the predictive accuracy of information during the thriving and constraining periods of crowdfunding development in China. Our results have significant implications for policymakers that crowdfunding fosters economic growth by connecting entrepreneurs and investors and should not be halted due to risks, especially during periods of financial constraints.

Keywords: Equity crowdfunding; Information asymmetry; Dual-system; Cognitive processing; Machine learning (search for similar items in EconPapers)
JEL-codes: D82 G11 G21 G32 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11187-024-00991-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:65:y:2025:i:1:d:10.1007_s11187-024-00991-3

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-024-00991-3

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().