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Signalling effects of doing good in global ICO markets

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  • Zhao, Ruoran
  • Hou, Wenxuan
  • Kumar, V.
  • Kumar, Ajay

Abstract

The Initial Coin Offerings (ICOs) markets have experienced dramatic development and turmoil worldwide. This paper studies signalling effects of CSR among global ICOs by asking if CSR narratives reflect values that highlight the interests of broad stakeholders, reduce information asymmetry, and improve fundraising outcomes. We construct a sample of ICOs across 44 countries from 2014 to 2018 and define socially responsible ICOs as those that serving education, environment, health, and poverty as described in their whitepapers. We find that ICOs from countries with a lower individualism and high benevolence culture are more likely have socially responsible goals. These projects tend to have better disclosure in whitepapers and are more active in engaging with stakeholders on social networking platforms. They are as competitive as ordinary ICOs in fundraising outcomes. Our analyses could advice entrepreneurial ventures on how to build legitimacy and inform investors of the strategy to verify signals in the risky private equity markets.

Suggested Citation

  • Zhao, Ruoran & Hou, Wenxuan & Kumar, V. & Kumar, Ajay, 2023. "Signalling effects of doing good in global ICO markets," Journal of Business Research, Elsevier, vol. 168(C).
    • Handle: RePEc:eee:jbrese:v:168:y:2023:i:c:s0148296323005830
    DOI: 10.1016/j.jbusres.2023.114224
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    2. Colombo, Jéfferson Augusto & Yarovaya, Larisa, 2024. "Are crypto and non-crypto investors alike? Evidence from a comprehensive survey in Brazil," Technology in Society, Elsevier, vol. 76(C).
    3. Zhan, Yuanzhu & Kumar, Ajay & Hosany, Sameer & Xia, Yusen & Schoenherr, Tobias & Xia, Lan, 2025. "Market competition in the platform economy: new insights, integrative framework and research agenda," Journal of Business Research, Elsevier, vol. 200(C).
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    5. Paul P. Momtaz, 2024. "Decentralized finance (DeFi) markets for startups: search frictions, intermediation, and the efficiency of the ICO market," Small Business Economics, Springer, vol. 63(4), pages 1415-1447, December.

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