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Real effects of lending-based crowdfunding platforms on the SMEs

Olena Havrylchyk () and Aref Mahdavi-Ardekani
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Olena Havrylchyk: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - UP1 - Université Paris 1 Panthéon-Sorbonne
Aref Mahdavi-Ardekani: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Authors registered in the RePEc Author Service: Aref Mahdavi Ardekani ()

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper explores the short_term impact of borrowing via lending_based crowdfunding on performance and health of small and medium enterprises (SMEs) in France. We find that firms borrowing from lending-based crowdfunding platforms are more dynamic (higher asset growth and higher profitability) and innovative, but they have lower leverage, less cash, higher funding costs and less tangible assets that could be pledged as as collateral. To account for this selection bias, we construct three control groups by using Propensity Score Matching, Mahalanobis Distance Matching and Coarsened Exact Matching methods and then run difference-in-difference regressions. We find that borrowing via lending-based crowdfunding platforms increases SMEs' leverage and interest rate burden in the short-term, but these impacts disappear after two years. We observe asset growth during the year of borrowing, but no impact on sales growth, investment, employment or profitability.

Keywords: lending-based crowdfunding; firm financing; firm performance; informational asymmetry (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-ent and nep-mac
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-02994903
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Published in 2020

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Working Paper: Real effects of lending-based crowdfunding platforms on the SMEs (2020) Downloads
Working Paper: Real effects of lending-based crowdfunding platforms on the SMEs (2020) Downloads
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