Affiliation:
1. Capital University of Science and Technology, Pakistan
Abstract
Quality signals and social network activities can reduce information asymmetry and influence investors’ investment decision which result in overfunding. Based on signaling theory and elaboration likelihood model, we develop a research model to conduct an empirical study in the context of equity crowdfunding. This study uses quantitative data from Crowdcube, the United Kingdom based world largest equity crowdfunding platform. Results conclude that quality signals (campaign characteristics and directors’ information) have a positive significant impact on overfunding. Social network activities make investors feel the project has good electronic word of mouth, thus, have a positive significant impact on overfunding. Results reveal that investors give more weightage to quality signals than electronic word of mouth when making investment decision in equity crowdfunding.
Subject
Management of Technology and Innovation,Business and International Management
Cited by
2 articles.
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