Exploring the impact of initial herd on overfunding in equity crowdfunding

Yijing Li; Fei Liu; Wenjie Fan; Eric T.K. Lim; Yong Liu

doi:10.1016/j.im.2020.103269

Exploring the impact of initial herd on overfunding in equity crowdfunding

Yijing Li
, Fei Liu
, Wenjie Fan
, Eric T.K. Lim
, Yong Liu

UNSW Business School
University of New South Wales
Copenhagen Business School

Tutkimustuotos: Lehtiartikkeli › Article › Scientific › vertaisarvioitu

41 Sitaatiot (Scopus)

Abstrakti

Outcome of equity crowdfunding campaigns often exceeds original fundraising goals, leading to market inefficiency. This undesirable phenomenon of overfunding garnered little attention in past studies. Synthesizing extant literature on crowdfunding and herding, we identified the initial herd made visible by funding progress indicator as the main cause of overfunding. The impact of the initial herd can be quantified by three dimensions: maturity, intensity, and persistency. We then advance and validate a research model for examining how dimensions of the initial herd affect overfunding in equity crowdfunding. Findings from this study can shed light on plausible remedies for the overfunding issue.

Alkuperäiskieli	Englanti
Artikkeli	103269
Sivut	1-10
Sivumäärä	10
Julkaisu	Information and Management
Vuosikerta	59
Numero	3
Varhainen verkossa julkaisun päivämäärä	15 tammik. 2020
DOI - pysyväislinkit	https://doi.org/10.1016/j.im.2020.103269
Tila	Julkaistu - huhtik. 2022
OKM-julkaisutyyppi	A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä

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10.1016/j.im.2020.103269

http://www.sciencedirect.com/science/article/pii/S0378720618307407

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title = "Exploring the impact of initial herd on overfunding in equity crowdfunding",

abstract = "Outcome of equity crowdfunding campaigns often exceeds original fundraising goals, leading to market inefficiency. This undesirable phenomenon of overfunding garnered little attention in past studies. Synthesizing extant literature on crowdfunding and herding, we identified the initial herd made visible by funding progress indicator as the main cause of overfunding. The impact of the initial herd can be quantified by three dimensions: maturity, intensity, and persistency. We then advance and validate a research model for examining how dimensions of the initial herd affect overfunding in equity crowdfunding. Findings from this study can shed light on plausible remedies for the overfunding issue.",

keywords = "Crowdfunding, Herd, Herding behavior, Overfunding",

author = "Yijing Li and Fei Liu and Wenjie Fan and Lim, \{Eric T.K.\} and Yong Liu",

year = "2022",

month = apr,

doi = "10.1016/j.im.2020.103269",

language = "English",

volume = "59",

pages = "1--10",

journal = "Information and Management",

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T1 - Exploring the impact of initial herd on overfunding in equity crowdfunding

AU - Li, Yijing

AU - Liu, Fei

AU - Fan, Wenjie

AU - Lim, Eric T.K.

AU - Liu, Yong

PY - 2022/4

Y1 - 2022/4

N2 - Outcome of equity crowdfunding campaigns often exceeds original fundraising goals, leading to market inefficiency. This undesirable phenomenon of overfunding garnered little attention in past studies. Synthesizing extant literature on crowdfunding and herding, we identified the initial herd made visible by funding progress indicator as the main cause of overfunding. The impact of the initial herd can be quantified by three dimensions: maturity, intensity, and persistency. We then advance and validate a research model for examining how dimensions of the initial herd affect overfunding in equity crowdfunding. Findings from this study can shed light on plausible remedies for the overfunding issue.

AB - Outcome of equity crowdfunding campaigns often exceeds original fundraising goals, leading to market inefficiency. This undesirable phenomenon of overfunding garnered little attention in past studies. Synthesizing extant literature on crowdfunding and herding, we identified the initial herd made visible by funding progress indicator as the main cause of overfunding. The impact of the initial herd can be quantified by three dimensions: maturity, intensity, and persistency. We then advance and validate a research model for examining how dimensions of the initial herd affect overfunding in equity crowdfunding. Findings from this study can shed light on plausible remedies for the overfunding issue.

KW - Crowdfunding

KW - Herd

KW - Herding behavior

KW - Overfunding

UR - https://www.scopus.com/pages/publications/85078615387

U2 - 10.1016/j.im.2020.103269

DO - 10.1016/j.im.2020.103269

M3 - Article

SN - 0378-7206

VL - 59

SP - 1

EP - 10

JO - Information and Management

JF - Information and Management

IS - 3

M1 - 103269

ER -

Exploring the impact of initial herd on overfunding in equity crowdfunding

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