Ban, Boom, and Echo! Entrepreneurship and Initial Coin Offerings

Cristiano Bellavitis, Douglas Cumming and Tom Vanacker

Entrepreneurship Theory and Practice, 2022, vol. 46, issue 5, 1136-1169

Abstract: Regulatory spillovers occur when regulation in one country affects either the expected regulatory approach and/or entrepreneurial finance markets in other countries. Drawing on institutional theory, we investigate the global implications of a regulatory spillover on entrepreneurship. We argue that regulatory spillovers have both short- and long-term effects on the number and quality of entrepreneurial finance initiatives such as Initial Coin Offerings (ICOs). Based on a large-scale sample of ICOs in 108 countries, we find that a regulatory ban of ICOs in one country causes a short-term increase in the number of low-rated ICOs in other countries and a long-term drop in the number of ICOs, especially low-rated, which increases the average ICO rating. That is, a restrictive regulation triggered a process of increased market selection.

Keywords: entrepreneurial finance; entrepreneurship; institutions; blockchain; initial coin offering (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:46:y:2022:i:5:p:1136-1169

DOI: 10.1177/1042258720940114

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