Inclusive digital finance: the industry of equity crowdfunding

Access to digital finance: Equity crowdfunding across countries and platforms

Financing entrepreneurship spurs innovation and economic growth. Digital financial platforms that crowdfund equity for entrepreneurs have emerged globally, yet they remain poorly understood. We model equity crowdfunding in terms of the relationship between the number of investors and the amount of money raised per pitch. We examine heterogeneity in the average amount raised per pitch that is associated with differences across three countries and seven platforms. Using a novel dataset of successful fundraising on the most prominent platforms in the UK, Germany, and the USA, we find the underlying relationship between the number of investors and the amount of money raised for entrepreneurs is loglinear, with a coefficient less than one and concave to the origin. We identify significant variation in the average amount invested in each pitch across countries and platforms. Our findings have implications for market actors as well as regulators who set competitive frameworks.

Digital inclusive finance and the development of rural logistics in China

The precarious production environment in rural areas limits the services of traditional finance and rural logistics. Digital inclusive finance is expected to alleviate some major drawbacks enabling financial services to contribute to rural logistics development. Using panel data from 31 provinces in China from 2013 to 2020, this paper constructed an indicator system to measure the development level of rural logistics. Furthermore, this paper investigates the mechanism enabling digital inclusive finance influences to enhance rural logistics development. We found that financial inclusion and digital finance have a positive and significant impact on the development level of rural logistics. Moreover, we found a nonlinear relationship with a diminishing marginal effect between digital inclusive finance and the development level of rural logistics. Furthermore, it was highlighted that the promotion efficiency of digital inclusive finance on the development level of rural logistics varies according to the region and economic development. This paper provides a theoretical basis for digital inclusive finance to promote rural logistics development. It also contributes to enhancing the role of financial services enabling good development of rural logistics.

Evolutionary game study of crowdsourcing open innovation synergy mechanism

Open innovation crowdsourcing can help enterprises meet the challenges of a rapidly changing environment and improve their innovation performance. This study introduces network externalities as influencing factors of the crowdsourcing open innovation synergy mechanism. This study constructed the game payment matrix of the crowdsourcing open innovation synergy mechanism, and the evolutionary game method obtained the equilibrium solution of the crowdsourcing open innovation synergy mechanism. The impact of changes in the main influencing factors on the issuers' and receivers' willingness to collaborate and innovate was explored through numerical and case studies. The study shows that the higher the synergy benefit and its allocation coefficient need to be within a reasonable range for the willingness to collaborate and innovate to increase; the lower the original cost of both parties, and the higher the cost reduction coefficient under the policy support of the crowdsourcing platform, the higher the willingness to collaborate and innovate; the higher the network externality and the lower the penalty for breach of contract, the higher the desire to collaborate and innovate. The study recommends strengthening non-school education to guide innovation for all, and refining relevant policies to tailor innovation to local conditions. This study provides a new perspective and theoretical guidance for enterprises to build a crowdsourcing open innovation synergy mechanism and is a valuable reference for open innovation management.

Modified CPT-TODIM method for evaluating the development level of digital inclusive finance under probabilistic hesitant fuzzy environment

Unlike traditional finance, digital inclusive finance is committed to integrating digital technology with the financial industry to bring groups originally excluded from traditional finance back into formal financial services and provide financial services at reasonable prices and matching needs for all social classes. Digital inclusive finance can effectively reduce the financing costs of SMEs, improve the external financing environment of enterprises, and provide more convenient, equal and perfect financial services for enterprises by using technical support such as "big data + artificial intelligence". The development level of digital inclusive finance is a classical multiple attributes group decision making (MAGDM). The Probabilistic hesitant fuzzy sets (PHFSs), which utilize the possible values and its possible membership degrees to depict decision-makers' behavior in different conditions, has been paid great attention. Though numerous methods have been applied in this environment since PHFSs has been introduced, there are still new fields to be explored. In this paper, we introduce the Cumulative Prospect Theory TODIM (CPT-TODIM) for probabilistic hesitant fuzzy MAGDM(PHF-MAGDM). Meanwhile, the information of entropy is utilized to calculate the weight of attributes, which is used to improve the classical TODIM method. At last, we utilize a numerical case for evaluating the development level of digital inclusive finance to compare the extended CPT-TODIM method with the classical TODIM method.

Going green in China: how does digital finance affect environmental pollution? Mechanism discussion and empirical test

With the continuous advancement of the technological revolution and industrial transformation, environmental governance supported by digital finance has become an important engine for achieving carbon neutrality. Based on panel data from 30 provinces in China, this study discusses the spatial spillover effect and transmission mechanism between digital finance and environmental pollution. Our research results confirm that the inhibitory effect of digital finance on local environmental pollution gradually increases with the improvement of digital finance. Interestingly, digital finance has a significant positive spatial spillover effect on environmental pollution in surrounding areas. The mediating effect shows that digital finance can alleviate environmental pollution by improving technological innovation, industrial upgrading and industrial structure rationalization. A higher degree of marketization and governmental support can increase the positive influences of digital finance on pollution reduction. This research proves the effectiveness of digital finance in improving environmental governance, and it encourages policy-makers around the world to rely on digital finance to promote ecological governance and achieve high-quality economic development.

Mapping the venture capital and private equity research: a bibliometric review and future research agenda

The fields of venture capital and private equity are rooted in financing research on capital budgeting and initial public offering (IPO). Both fields have grown considerably in recent times with a heterogenous set of themes being explored. This review presents an analysis of research in both fields. Using a large corpus from the Web of Science, this study used bibliometric analysis to present a comprehensive encapsulation of the fields' geographical focus, methodological choices, prominent themes, and future research directions. Noteworthily, the foundational themes in venture capital research are venture capital adoption and financing processes, venture capital roles in business, venture capital governance, venture capital syndication, and venture capital and creation of public organizations. In private equity research, style drift into venture capital emerges as a key theme alongside buyouts and privatization, and valuation and performance of private equity investment.

The effect of digital finance on Residents' happiness: the case of mobile payments in China

With the popularization of digital finance in China, mobile payments have penetrated into all aspects of residents' daily life. However, few studies have examined the potential impact of mobile payments on people's happiness in China. Using the nationally representative data from the China Household Finance Survey (CHFS), this study adopts the ordered probit regression with endogenous treatment to adjust for possible endogeneity to assess the effect of mobile payments on residents' happiness. The results suggest an association between mobile payment usage and increases in happiness, which is supported by several robustness checks, such as using an alternative instrumental variable (IV), replacing the explained variable, and removing some extreme observations. In addition, we explore the mechanisms by which mobile payments affect residents' happiness from multiple perspectives. Positive mechanisms include promoting quality of life, reducing transaction costs, stimulating entrepreneurship, and increasing social interaction. However, as a non-cash payment method, mobile payments may also lead to over-consumption, which is detrimental to residents' happiness. Furthermore, the heterogeneous analysis shows inclusive attributes of mobile payments. We find mobile payments have a greater positive effect on happiness of some socially disadvantaged groups, such as elderly individuals, rural residents, the low-educated, and low-income households. These findings supplement the literature on online happiness and financial inclusion and refer to the possible negative impact of mobile payments. Therefore, it is necessary to actively promote mobile payments to benefit more socially vulnerable groups and prevent potential risks from over-consumption.

Expanding corporate finance perspectives to equity crowdfunding

In equity crowdfunding, firms raise capital online from a large pool of heterogeneous investors, thereby providing primary market opportunities similar to traditional public markets, such as initial public offerings. The development of secondary markets is instead still limited, making the post-offering perspectives of both crowdfunding investors and firms closer to private equity deals. We believe that equity crowdfunding markets provide an interesting setting where to test existing corporate finance and financial economics theories, as well as to develop new theoretical insights. Relatedly, our understanding of crowdfunding mechanisms can largely benefit from increased attention from finance scholars. This paper and special issue are an attempt in this direction.

Strategic entrepreneurial choice between competing crowdfunding platforms

This paper investigates strategic entrepreneurial choice between the UK Big 3 platforms–Crowdcube, Seedrs and SyndicateRoom–that exemplify the three main equity crowdfunding (ECF) shareholder structures identified in the literature. ECF has become a strategic choice for both entrepreneurs and angel and venture capital funds as it offers mutually beneficial advantages to both, especially under the co-investment ECF model where these funds co-invest alongside the crowd. The multinomial probit results show that large founder teams are more likely to choose the co-investment model (SyndicateRoom) but are less likely to opt for the nominee ownership structure (Seedrs). Although less heterogeneous teams are more likely to choose the Seedrs and Crowdcube ownership structures, our results suggest that the probability of choosing the co-investment model (SyndicateRoom) monotonically increases as teams become more heterogeneous. The conclusion is that larger and heterogeneous teams are more likely to raise ECF funds from campaigns explicitly involving professional investors.

Success factors of initial coin offerings

This study furthers recent research on Initial Coin Offerings (ICO) in understanding the set of characteristics that drive ICO performance and reduce information asymmetry. Using data on 166 ICOs and more than 300,000 contribution addresses that sent funds to ICOs in Bitcoins or in Ether between 2013 and 2017, we examined the effect of ICO characteristics on ICO performance. We found that three boundary conditions predict ICO fundraising amount, number of investors, hard cap achievement and token ranking. These are registering ICO and publishing project’s code on GitHub, obtaining VC or Business angel financing before the campaign or during presale, and finally, publishing the whitepaper before the campaign’s start. Other factors such as serial investors, presale of tokens, bonus sales and funders' ownership share explain ICO performance. We offer implications for ICO investors and policymakers.

Microfinance towards micro-enterprises development in rural Malaysia through digital finance

Microfinance is critical for the development of micro-enterprises and alleviating poverty. However, micro-enterprises are able to get microfinance services, they would face a variety of obstacles, due to the misunderstandings among many stakeholders, microfinance has not acquired widespread acceptance. Therefore, the purpose of this study is to investigate microfinance's impact on the sustainable development of Malaysia's rural micro-enterprises. Besides, digital finance is integrated into the conceptual model to further investigate their mediating impact. Data was collected from 563 rural micro-enterprises using structured questionnaires, which were then statistically analyzed using AMOS-21. The findings of the study reveal that microfinance has a positive substantial influence on rural micro-enterprises development. Moreover, digital finance partially mediates the relationship. Thus, the study concludes that microfinance institutions are needed to adopt digital finance to enhance micro enterprises' productivity through low transaction costs. The findings of the study can be useful to policymakers in the micro-enterprise sector who have a long-term vision and expect the sector to develop steadily. The study also provides scope and space for future academics and scholars to conduct further research.