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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: Centre d'Economie de la Sorbonne & LabEx ReFi, https://sites.google.com/site/olenahavrylchyk/home

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

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 a 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)
JEL-codes: G21 G23 G31 G32 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2020-08
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-cse
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Downloads: (external link)
http://mse.univ-paris1.fr/pub/mse/CES2020/20024.pdf (application/pdf)
https://halshs.archives-ouvertes.fr/halshs-02994903

Related works:
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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