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The behavior of blockchain ventures on Twitter as a determinant for funding success

Simon Albrecht (), Bernhard Lutz and Dirk Neumann
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Simon Albrecht: University of Freiburg
Bernhard Lutz: University of Freiburg
Dirk Neumann: University of Freiburg

Electronic Markets, 2020, vol. 30, issue 2, No 6, 257 pages

Abstract: Abstract Blockchain ventures rely on a distributed funding instrument called initial coin offering (ICO). Since ICOs are not regulated, potential investors face information asymmetries and decision-making under uncertainty. In this study, we investigate whether blockchain ventures can effectively reduce these information asymmetries by utilizing signaling mechanisms on Twitter and how the resulting effects differ from those in conventional market environments. Based on a corpus of 144,492 tweets from 522 ventures, we provide empirical evidence that positive language and a high, yet steady level of interactivity with the community are linked to higher funding, while frequent stressing of time frames has the opposite effect. To the best of our knowledge, this presents the first study to analyze how the textual content of tweets can be linked to the success of blockchain ventures.

Keywords: Blockchain; Initial coin offering; Twitter; Sentiment; Social media (search for similar items in EconPapers)
JEL-codes: D81 G41 L86 L26 M13 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s12525-019-00371-w

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