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Community-level social capital and investment decisions in equity crowdfunding

Author

Listed:
  • Massimiliano Barbi

    (University of Bologna)

  • Valentina Febo

    (EM Normandie Business School)

  • Giancarlo Giudici

    (Politecnico Di Milano)

Abstract

We investigate the role of community-level social capital in individuals’ investment decisions in equity crowdfunding. We exploit a hand-collected dataset of individual investments pledged to successful campaigns in Italy between 2014 and 2018. Individuals born in provinces with high social capital invest more substantially in riskier campaigns. Contrary to inborn social capital, social capital in the province where investors live has no impact. This evidence survives several robustness checks and highlights the crucial role of an individual's cultural traits in fostering investment in equity crowdfunding.

Suggested Citation

  • Massimiliano Barbi & Valentina Febo & Giancarlo Giudici, 2023. "Community-level social capital and investment decisions in equity crowdfunding," Small Business Economics, Springer, vol. 61(3), pages 1075-1110, October.
    • Handle: RePEc:kap:sbusec:v:61:y:2023:i:3:d:10.1007_s11187-022-00724-4
    DOI: 10.1007/s11187-022-00724-4
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    More about this item

    Keywords

    Equity crowdfunding; Community-level social capital; Generalized trust; Culture;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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