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The role of location in the emergence of crowdfunding

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  • Miglo, Anton

Abstract

Crowdfunding is an innovative and fastly growing way of financing for entrepreneurial firms. England is the leading country in crowdfunding. Yet no research exists that compare different cities of UK with regard to the conditions of crowdfunding emergence. In this article we shed some light on this question. We have found that cities with better access to ultrafast broadband among households and cities with greater number of people with higher education have significantly better results in crowdfunding. Further we find that entrepreneurs in these cities select lower crowdfunding targets and are more likely to publish a spotlight about their ideas suggesting that entrepreneurs in these cities understand the importance of imperfect information and signalling (direct and indirect) in crowdfunding. We also discuss these findings in light of crowdfunding theories.

Suggested Citation

  • Miglo, Anton, 2022. "The role of location in the emergence of crowdfunding," MPRA Paper 115833, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115833
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    References listed on IDEAS

    as
    1. Anton Miglo & Victor Miglo, 2019. "Market imperfections and crowdfunding," Small Business Economics, Springer, vol. 53(1), pages 51-79, June.
    2. Mollick, Ethan, 2014. "The dynamics of crowdfunding: An exploratory study," Journal of Business Venturing, Elsevier, vol. 29(1), pages 1-16.
    3. Laivi Laidroo & Mari Avarmaa, 2020. "The role of location in FinTech formation," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 32(7-8), pages 555-572, August.
    4. Anton Miglo, 2020. "Crowdfunding in a Competitive Environment," JRFM, MDPI, vol. 13(3), pages 1-38, February.
    5. Paolo Crosetto & Tobias Regner, 2014. "Crowdfunding: Determinants of success and funding dynamics," Jena Economics Research Papers 2014-035, Friedrich-Schiller-University Jena.
    6. Evila Piva & Cristina Rossi-Lamastra, 2018. "Human capital signals and entrepreneurs’ success in equity crowdfunding," Small Business Economics, Springer, vol. 51(3), pages 667-686, October.
    7. Belleflamme, Paul & Omrani, Nessrine & Peitz, Martin, 2015. "The economics of crowdfunding platforms," Information Economics and Policy, Elsevier, vol. 33(C), pages 11-28.
    8. Christopher Courtney & Supradeep Dutta & Yong Li, 2017. "Resolving Information Asymmetry: Signaling, Endorsement, and Crowdfunding Success," Entrepreneurship Theory and Practice, , vol. 41(2), pages 265-290, March.
    9. Silvio Vismara, 2016. "Equity retention and social network theory in equity crowdfunding," Small Business Economics, Springer, vol. 46(4), pages 579-590, April.
    10. Chan, C.S. Richard & Parhankangas, Annaleena & Sahaym, Arvin & Oo, Pyayt, 2020. "Bellwether and the herd? Unpacking the u-shaped relationship between prior funding and subsequent contributions in reward-based crowdfunding," Journal of Business Venturing, Elsevier, vol. 35(2).
    11. Simon Kleinert & Christine Volkmann & Marc Grünhagen, 2020. "Third-party signals in equity crowdfunding: the role of prior financing," Small Business Economics, Springer, vol. 54(1), pages 341-365, January.
    12. Mari-Liis Kukk & Laivi Laidroo, 2020. "Institutional Drivers of Crowdfunding Volumes," JRFM, MDPI, vol. 13(12), pages 1-28, December.
    13. Davies, William E. & Giovannetti, Emanuele, 2018. "Signalling experience & reciprocity to temper asymmetric information in crowdfunding evidence from 10,000 projects," Technological Forecasting and Social Change, Elsevier, vol. 133(C), pages 118-131.
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    More about this item

    Keywords

    crowdfunding; reward-based crowdfunding; crowdfunding in technology sector; digital entrepreneurship; information asymmetry; signalling; factors of crowdfunding success; campaign target;
    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
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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