Equity Crowdfunding: Brave Market or Safe Haven for the Crowd During the COVID-19 Crisis?

Francesca Battaglia, Francesco Busato and Maria Manganiello

Chapter 14 in Financial Transformations Beyond the COVID-19 Health Crisis, 2022, pp 403-445 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter explores the impact of the COVID-19 pandemic on the Italian equity crowdfunding sector by analyzing a full dataset of 437 Italian equity crowdfunding campaigns over the period 2014–2020 and focusing on a sub-sample of 79 projects posted on the websites of platforms from January 2020 to June 2020. In detail, we investigate whether and to what extent the key drivers (i.e. female founders, social capital, and equity offered) that brought backers to finance a specific project before COVID-19 are the same nowadays, and which type of ventures backers are more prone to finance via equity crowdfunding in the aftermath of the crisis. We provide evidence that the strength of the effect of our key variables on the campaign’s success has changed during the COVID-19 crisis. We also find that backers are more prone to finance companies with a high level of R&D expenditure and technological projects. Moreover, we point out that ventures not located in a red zone are more likely to be successfully financed by backers and that they are more willing to invest in projects launched in platforms implementing specific measures in response to COVID-19.

Keywords: COVID19; Pandemic; Pandemic Outbreak; Health Crisis; Economics; Macroeconomics; Finance; Sustainable Finance; Financial Crisis; Financial Integration; Economic Integration; Global Financial Crisis; Financial Institutions; Corporate Finance; Corporate Governance; Board of Directors; ESG; Corporate Social Responsibility; Sustainable Finance; Stock Markets; Financial Markets; Stock Market Behaviour; Firm Liquidity; Emerging Markets; China; Financial Institutions; Money; Banks; Banking System; Banking Sector; Business Groups; Resilience; Safe Heaven; Gold; Oil; Peer-to-Peer Lending Market; Foreign Trading; Stock Market Volatility; Extreme Events (search for similar items in EconPapers)
JEL-codes: F4 F62 G15 G17 G3 O16 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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