What is an effective #signal? While this question has been answered theoretically by Spence (1973) and others, there is surprisingly little empirical clarity on this question and research findings remain fragmented. In this new working paper https://lnkd.in/e_MFPVHK, we examine the top-notch #crowdfunding articles (#FT50 + x) and summarize the lessons that the #entrepreneurial #finance community has learned over the last two decades.
First, we asked 326 authors of top-notch crowdfunding articles to rank the most frequently studied explanatory variables according to what they believe are the most effective signals.
👉 Out of the 83 participants, 18 ranked Entrepreneur’s Past Crowdfunding Success as the most efficient signal, with an average rank of 3.61.
👉 Other highly ranked signals are Entrepreneur’s Business Experience, Patent Ownership, and Equity Share Offered by the Entrepreneur.
👉 More than one third of the survey participants indicated that Technology Sector Affiliation, Planned Campaign Duration, Firm Location in a Metropolitan Area, and Entrepreneur’s Gender are not signals.
👉 All remaining variables are considered regular signals in the context of our article. However, these are in fact the most important explanatory variables and effective signals in empirical research.
Second, we revisit the empirical findings from the literature and consolidate them through a #metaanalysis. Our final sample for the meta-analysis comprises 145 articles published between 2011 and 2023.
👉 Our results provide robust evidence that signals considered to be strong by expert researchers do not have significantly larger effect sizes than regular signals.
👉 The share of positive coefficients is similar for regular and for strong signals. When examining the share of significantly positive coefficients instead of only positive ones, the results even turn in favor of the regular signals.
👉 Regarding the statistical significance of coefficients, we find regular signals are more often statistically significant than strong signals.
Overall 56 pages of Appendix.
👉 Most articles use data from the most popular U.S. platform #Kickstarter and #Prosper as well as #Crowdcube from the UK.
👉 Regarding the explanatory variables, we find research examining 1,003 variables studying the success of a crowdfunding campaign.
Armin Schwienbacher, Daniel Blaseg, Silvio Vismara, Douglas Cumming, Sofia Johan, David Audretsch, Simon Kleinert, Thomas Lambert, Paul Belleflamme, Joern Block, Prof. Dr. Alexandra Moritz, Helen Bollaert, massimo colombo, Michele Meoli, Denis Schweizer, Gaël LEBOEUF, Rotem Shneor, Saul Estrin, Gregor Dorfleitner, Maximilian Goethner, Paul P. Momtaz, Mingfeng Lin, PhD Siva Viswanathan Anna Lukkarinen, Ethan Mollick, Cristina Rossi-Lamastra, Aleksandrina Ralcheva, Peter Roosenboom, Ed Saiedi, Ali Mohammadi, Andrew A. Schwartz, Kourosh Shafi, Silvana Signori, Nir Vulkan, Thomas Astebro
