Herding in Equity Crowdfunding

Thomas Stebro, Manuel Fernnndez Sierra, Stefano Lovo and Nir Vulkan

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Abstract: Do equity crowdfunding investors herd? We build a model where informed and uninformed investors arrive sequentially and choose whether and how much to invest. We test the model using data of investments on a leading European equity crowdfunding platform. We show theoretically and find empirically that the size and likelihood of a pledge is affected positively by the size of the most recent pledges, and negatively by the time elapsed since the most recent pledge. The empirical analysis is inconsistent with naive herding, independent investments, or exogenously correlated investments.

Keywords: Equity Crowdfunding; Herding (search for similar items in EconPapers)
Date: 2017-12-08
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Citations: View citations in EconPapers (4)

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Working Paper: Herding in Equity Crowdfunding (2018)
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