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Are Sustainability-Oriented Investors Different? Evidence from Equity Crowdfunding

Lars Hornuf, Eliza Stenzhorn and Tim Vintis

No 8339, CESifo Working Paper Series from CESifo

Abstract: In this article, we examine how investor motives affect investment behavior in equity crowdfunding. In particular, we compare the investment behavior of sustainability-oriented with ordinary crowd investors on six leading equity crowdfunding platforms in Austria and Germany and investigate whether they suffer from a default shock that was recently identified by Dorfleitner et al. (2019). In general, we find evidence of a default shock in equity crowdfunding that occurs immediately after the event and if investors experience more than two insolvencies. Moreover, we find that sustainability-oriented investors pledge larger amounts of money and invest in more campaigns than ordinary crowd investors. The results also suggest that sustainability-oriented crowd investors care about non-financial returns, as they react more sensitively after experiencing a default in their equity crowdfunding portfolios, which indicates that they suffer beyond the pure financial loss. These findings contribute to recent literature on equity crowdfunding, socially responsible investing, and how individual investment motives and personal experiences affect investment decisions.

Keywords: equity crowdfunding; individual investor behaviour; entrepreneurial finance; social; ethical; and environmental investing; socially responsible investing (search for similar items in EconPapers)
JEL-codes: G11 G24 K22 M13 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-eur and nep-hme
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