Financial Reporting and Entrepreneurial Finance: Evidence from Equity Crowdfunding

Published Online:https://doi.org/10.1287/mnsc.2020.3810

References

  • Abrams E (2017) Securities crowdfunding: More than family, friends, and fools? Working paper, University of Chicago, Chicago.Google Scholar
  • Agrawal A, Catalini C, Goldfarb A (2014) Some simple economics of crowdfunding. Lerner J, Stern S, eds. Innovation Policy and the Economy (University of Chicago Press Journals, Chicago).Google Scholar
  • Ahlers G, Cumming D, Guenther C, Schweizer D (2015) Signaling in equity crowdfunding. Entrepreneurship Theory Practice 39(4):955–980.CrossrefGoogle Scholar
  • Ali A, Klasa S, Yeung E (2014) Industry concentration and corporate disclosure policy. J. Accounting Econom. 58(2–3):240–264.CrossrefGoogle Scholar
  • Allee K, Yohn T (2009) The demand for financial statements in an unregulated environment: An examination of the production and use of financial statements by privately held small businesses. Accounting Rev. 84(1):1–25.CrossrefGoogle Scholar
  • Allison P (2009) Fixed Effects Regression Models. Quantitative Applications in Social Sciences, vol. 160 (Sage Publications, Thousand Oaks, CA).CrossrefGoogle Scholar
  • Armstrong C, Davila A, Foster G (2006) Venture-backed private equity valuation and financial statement information. Rev. Accounting Stud. 11(1):119–154.CrossrefGoogle Scholar
  • Barry C (1990) The role of venture capital in the creation of public companies: Evidence from the going-public process. J. Financial Econom. 27(2):447–471.CrossrefGoogle Scholar
  • Barth M, Landsman W, Taylor D (2017) The JOBS Act and information uncertainty in IPO firms. Accounting Rev. 92(6):25–47.CrossrefGoogle Scholar
  • Barton J, Waymire G (2004) Investor protection under unregulated financial reporting. J. Accounting Econom. 38:65–116.CrossrefGoogle Scholar
  • Benston G (1973) Required disclosure and the stock market: An evaluation of the Securities Exchange Act of 1934. Amer. Econom. Rev. 63(1):132–155.Google Scholar
  • Bernard D, Burgstahler D, Kaya D (2018) Size management by European private firms to minimize proprietary costs of disclosure. J. Accounting Econom. 66(1):94–122.CrossrefGoogle Scholar
  • Bernstein S, Korteweg A, Laws K (2017) Attracting early stage investors: Evidence from a randomized field experiment. J. Finance 72(2):509–538.CrossrefGoogle Scholar
  • Beyer A, Cohen D, Lys T, Walther B (2010) The financial reporting environment: Review of the recent literature. J. Accounting Econom. 50(2–3):296–343.CrossrefGoogle Scholar
  • Bloom N (2009) The impact of uncertainty shocks. Econometrica 77(3):623–685.CrossrefGoogle Scholar
  • Bogdani E, Causholli M, Knechel R (2019) The role of assurance in equity crowdfunding. Working paper, University of Kentucky, Lexington, KY.Google Scholar
  • Bonsall S, Green J, Muller K (2018) Are credit ratings more rigorous for widely covered firms? Accounting Rev. 93(6):61–94.CrossrefGoogle Scholar
  • Boulton T, Smart S, Zutter C (2011) Earnings quality and international IPO underpricing. Accounting Rev. 86(2):483–505.CrossrefGoogle Scholar
  • Bushee B, Friedman H (2016) Disclosure standards and the sensitivity of returns to mood. Rev. Financial Stud. 29(3):787–822.Google Scholar
  • Cassar G (2009) Financial statement and project preparation in start-up ventures. Accounting Rev. 84(1):27–51.CrossrefGoogle Scholar
  • Cassar G, Ittner C, Cavalluzzo K (2015) Alternative information sources and information asymmetry reduction: Evidence from small business debt. J. Accounting Econom. 59(2–3):242–263.CrossrefGoogle Scholar
  • Chaplinsky S, Hanley K, Moon S (2017) The JOBS Act and the costs of going public. J. Accounting Res. 55(4):795–836.CrossrefGoogle Scholar
  • Chemmanur T, Fulghieri P (2014) Entrepreneurial finance and innovation: An introduction and agenda for future research. Rev. Financial Stud. 27(1):1–19.CrossrefGoogle Scholar
  • Chen S, Miao B, Shevlin T (2015) A new measure of disclosure quality: The level of disaggregation of accounting data in annual reports. J. Accounting Res. 53(5):1017–1054.CrossrefGoogle Scholar
  • Coffee J (2007) Law and the market: The impact of enforcement. Univ. Pennsylvania Law Rev. 156(2):229–311.Google Scholar
  • Crowdfunding Hub (2016) Current state of crowdfunding in Europe: An overview of the crowdfunding industry in more than 25 countries: Trends, volumes, and regulations, https://www.crowdfundinghub.eu/current-state-of-crowdfunding-in-europe-2016/.Google Scholar
  • Cumming D, Johan S (2013) Demand-driven securities regulation—Evidence from crowdfunding. Venture Capital 15(4):361–379.CrossrefGoogle Scholar
  • Cumming D, Leboeuf G, Schwienbacher A (2020) Crowdfunding models: Keep-it-all vs. all-or-nothing. Financial Management 49(2):331–360.CrossrefGoogle Scholar
  • Cumming D, Meoli M, Vismara S (2019) Does equity crowdfunding democratize entrepreneurial finance? Small Bus. Econom. 53:1–20.Google Scholar
  • Da Rin M, Hellmann T, Puri M (2013) A survey of venture capital research. Handbook of the Economics of Finance, vol. 2, 573–648.Google Scholar
  • Dambra M, Field L, Gustafson M (2015) The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision. J. Financial Econom. 116(1):121–143.CrossrefGoogle Scholar
  • Decker R, Haltiwanger J, Jarmin R, Miranda J (2014) The role of entrepreneurship in U.S. job creation and economic dynamism. J. Econom. Perspect. 28(3):3–24.CrossrefGoogle Scholar
  • Demerjian P, Donovan J, Lewis-Western M (2020) Income smoothing and the usefulness of earnings for monitoring in debt contracting. Contemporary Accounting Res. 37(2):857–884.CrossrefGoogle Scholar
  • de Kok T (2019) Reporting frequency and market pressure in crowdfunding markets. Working paper, University of Washington, Seattle.Google Scholar
  • Diamond D (1985) Optimal release of information by firms. J. Finance 40(4):1071–1094.CrossrefGoogle Scholar
  • Drake M, Roulstone D, Thornock J (2016) The usefulness of historical accounting reports. J. Accounting Econom. 61(2–3):448–464.CrossrefGoogle Scholar
  • Duarte J, Siegel S, Young L (2012) Trust and credit: The role of appearance in peer-to-peer lending. Rev. Financial Stud. 25(8):2455–2484.CrossrefGoogle Scholar
  • Easterbrook F, Fischel D (1984) Mandatory disclosure and the protection of investors. Virginia Law Rev. 70(4):669–715.CrossrefGoogle Scholar
  • Erel I, Julio B, Kim W, Weisbach M (2012) Macroeconomic conditions and capital raising. Rev. Financial Stud. 25(2):341–376.CrossrefGoogle Scholar
  • European Crowdfunding Network (2014) Review of crowdfunding regulation: Interpretations of existing regulation concerning crowdfunding in Europe, North America, and Israel, http://eurocrowd.org/wp-content/blogs.dir/sites/85/2014/12/ECN-Review-of-Crowdfunding-Regulation-2014.pdf.Google Scholar
  • Feltham G, Ohlson J (1995) Valuation and clean surplus accounting for operating and financial activities. Contemporary Accounting Res. 11(2):689–731.CrossrefGoogle Scholar
  • Financial Conduct Authority (2014) The FCA’s regulatory approach to crowdfunding over the internet, and the promotion of non-readily realizable securities by other media. Policy statement PS14/4, https://www.fca.org.uk/publication/policy/ps14-04.pdfGoogle Scholar
  • Frank KA (2000) Impact of a confounding variable on a regression coefficient. Sociol. Methods Res. 29(2):147–194.CrossrefGoogle Scholar
  • Geiger M, Oranburg S (2018) Female entrepreneurs and equity crowdfunding the US: Receiving less when asking for more. J. Bus. Venturing Insights 10:1–8.CrossrefGoogle Scholar
  • Gigler F (1994) Self-enforcing voluntary disclosures. J. Accounting Res. 32(2):224–240.CrossrefGoogle Scholar
  • Gompers P (1995) Optimal investment, monitoring, and the staging of venture capital. J. Finance 50(5):1461–1489.CrossrefGoogle Scholar
  • Greene W (2004) The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects. Econometrics J. 7(1):98–119.CrossrefGoogle Scholar
  • Grossman S (1981) The informational role of warranties and private disclosure about product quality. J. Law Econom. 24(3):461–484.CrossrefGoogle Scholar
  • Haltiwanger J, Jarmin R, Miranda J (2012) Who creates jobs? Small versus large versus young. Rev. Econom. Statist. 95(2):347–361.CrossrefGoogle Scholar
  • Hand J (2005) The value relevance of financial statements in the venture capital market. Accounting Rev. 80(2):613–648.CrossrefGoogle Scholar
  • Hayn C (1995) The information content of losses. J. Accounting Econom. 20(2):125–153.CrossrefGoogle Scholar
  • Hellmann T, Puri M (2002) Venture capital and the professionalization of start-up firms: Empirical evidence. J. Finance 57(1):169–197.CrossrefGoogle Scholar
  • Hornuf L, Schwienbacher A (2017) Which securities regulation promotes crowdfunding? Small Bus. Econom. 49:579–593.CrossrefGoogle Scholar
  • Ivanov V, Knyazeva A (2017) U.S. securities-based crowdfunding under Title III of the JOBS Act. SEC White Paper. Accessed March 29, 2019, https://www.sec.gov/files/2017-03/RegCF_WhitePaper.pdf.Google Scholar
  • Jog V, McConomy B (2003) Voluntary disclosure of management earnings forecasts in IPO prospectuses. J. Bus. Finance Accounting 30(1–2):125–168.CrossrefGoogle Scholar
  • Kausar A, Shroff N, White H (2016) Real effects of the audit choice. J. Accounting Econom. 62(1):157–181.CrossrefGoogle Scholar
  • Kerr W, Lerner J, Schoar A (2014) The consequences of entrepreneurial finance: Evidence from angel financings. Rev. Financial Stud. 27(1):20–55.CrossrefGoogle Scholar
  • Kothari SP (2001) Capital markets research in accounting. J. Accounting Econom. 31(1–3):105–231.CrossrefGoogle Scholar
  • Krauth BV (2007) Peer effects and selection effects on youth smoking in California. J. Bus. Econom. Statist. 25(3):288–298.CrossrefGoogle Scholar
  • Krauth BV (2016) Bounding a linear causal effect using relative correlation restrictions. J. Econom. Methods 5(1):117–141.CrossrefGoogle Scholar
  • Landsman W, Maydew E, Thornock J (2012) The information content of annual earnings announcements and mandatory adoption of IFRS. J. Accounting Econom. 53(1–2):34–54.CrossrefGoogle Scholar
  • Lang M, Lins K, Maffett M (2012) Transparency, liquidity, and valuation: International evidence on when transparency matters most. J. Accounting Res. 50(3):729–774.CrossrefGoogle Scholar
  • Lawrence A (2013) Individual investors and financial reporting. J. Accounting Econom. 56(1):130–147.CrossrefGoogle Scholar
  • Leland H, Pyle D (1977) Informational asymmetries, financial structure, and financial intermediation. J. Finance 32(2):371–387.CrossrefGoogle Scholar
  • Leone A, Minutti-Meza M, Wasley C (2019) Influential observations and inference in accounting research. Accounting Rev. 94(6):337–364.CrossrefGoogle Scholar
  • Lerner J (1994) The importance of patent scope: An empirical analysis. RAND J. Econom. 25(2):319–333.CrossrefGoogle Scholar
  • Leuz C (2003) IAS versus U.S. GAAP: Information asymmetry-based evidence from Germany’s new market. J. Accounting Res. 41(3):445–472.CrossrefGoogle Scholar
  • Lourie B, Olivola C, Ruchti T (2018) Gender-based discrimination in crowdfinancing. Working paper, University of California-Irvine.Google Scholar
  • Lovell M (1963) Seasonal adjustment of economic time series and multiple regression analysis. J. Amer. Statist. Assoc. 58(204):993–1010.CrossrefGoogle Scholar
  • Lukkarinen A, Teich J, Wallenius H, Wallenius J (2016) Success drivers of online equity crowdfunding campaigns. Decision Support Systems 87:26–38.CrossrefGoogle Scholar
  • Madsen J, McMullin J (2020) Economic consequences of risk disclosures: Evidence from crowdfunding. Accounting Rev. 95(4):331–363.CrossrefGoogle Scholar
  • McMullin J, Schonberger B (2020) Entropy-balanced discretionary accruals. Rev. Accounting Stud. 25:84–119.CrossrefGoogle Scholar
  • Mele A, Sangiorgi F (2015) Uncertainty, information acquisition, and price swings in assets markets. Rev. Econom. Stud. 82(4):1533–1567.CrossrefGoogle Scholar
  • Merkley K (2014) Narrative disclosure and earnings performance: Evidence from R&D disclosures. Accounting Rev. 89(2):725–757.CrossrefGoogle Scholar
  • Michels J (2012) Do unverifiable disclosures matter? Evidence from peer-to-peer lending. Accounting Rev. 87(4):1385–1413.CrossrefGoogle Scholar
  • Milgrom P (1981) Good news and bad news: Representation theorems and applications. Bell J. Econom. 12(2):380–391.CrossrefGoogle Scholar
  • Minnis M, Sutherland A (2017) Financial statements as monitoring mechanisms: Evidence from small commercial loans. J. Accounting Res. 55(1):197–233.CrossrefGoogle Scholar
  • Mollick E (2014) The dynamics of crowdfunding: An exploratory study. J. Bus. Venturing 29(1):1–16.CrossrefGoogle Scholar
  • Moritz A, Block J (2016) Crowdfunding: A literature review and research directions. Brüntje D, Gajde O, eds. Crowdfunding in Europe: State of the Art in Theory and Practice (Springer, Switzerland), 25–53.CrossrefGoogle Scholar
  • Mummolo J, Peterson E (2018) Improving the interpretation of fixed effects in regression results. Political Sci. Res. Methods 6(48):829–835.CrossrefGoogle Scholar
  • Neilson J (2016) Uncertainty, investor learning, and positive post-announcement returns. Working paper, Pennsylvania State University, University Park, PA.Google Scholar
  • Ohlson J (1995) Earnings, book values, and dividends in equity valuation. Contemporary Accounting Res. 11(2):661–687.CrossrefGoogle Scholar
  • Ou J, Penman S (1989) Financial statement analysis and the prediction of stock returns. J. Accounting Econom. 11(4):295–329.CrossrefGoogle Scholar
  • Piotroski J (2000) Value investing: The use of historical financial statement information to separate winners from losers. J. Accounting Res. 38:1–41.CrossrefGoogle Scholar
  • Prosser D (2017) How crowdfunding took on private equity and won. Forbes Online (February 10), https://www.forbes.com/sites/davidprosser/2017/02/10/how-crowdfunding-took-on-private-equity-and-won/#276fedb5ddbd.Google Scholar
  • Ralcheva A, Roosenboom P (2016) On the road to success in equity crowdfunding. Working paper, Erasmus University, Rotterdam, Netherlands.Google Scholar
  • Securities and Exchange Commission (2017) SEC-NYU dialogue on securities markets: Securities crowdfunding in the U.S. Accessed October 1, 2019, https://www.sec.gov/dera/announcement/dera_event-022817_securities-crowdfunding-in-the-us.html.Google Scholar
  • Securities and Exchange Commission (2019) Regulation crowdfunding. Accessed March 6, 2020, https://www.sec.gov/smallbusiness/exemptofferings/regcrowdfunding.Google Scholar
  • Shipman J, Swanquist Q, Whited R (2016) Propensity score matching in accounting research. Accounting Rev. 92(1):213–244.CrossrefGoogle Scholar
  • Signori A, Vismara S (2018) Does success bring success? The post-offering lives of equity crowdfunded firms. J. Corporate Finance 50:575–591.CrossrefGoogle Scholar
  • Siriopoulos C, Fassas A (2008) The information content of the VFTSE. Working paper, Zayed University, Dubai, UAE.Google Scholar
  • Sivakumar K, Waymire G (1994) Voluntary interim disclosure by early 20th century NYSE industrials. Contemporary Accounting Res. 10(2):673–698.CrossrefGoogle Scholar
  • Testoni M, Wilson K (2014) Improving the role of equity crowdfunding in Europe’s capital markets. Bruegel Policy Contribution 2014(9):1–14.Google Scholar
  • Verrecchia R (1983) Discretionary disclosure. J. Accounting Econom. 5:179–194.CrossrefGoogle Scholar
  • Verrecchia R (2001) Essays on disclosure. J. Accounting Econom. 21(1–3):97–180.CrossrefGoogle Scholar
  • Verrecchia R, Weber J (2006) Redacted disclosure. J. Accounting Res. 44(4):791–814.CrossrefGoogle Scholar
  • Vismara S (2016) Information cascades among investors in equity crowdfunding. Entrepreneurship Theory Practice 42(3):467–497.Google Scholar
  • Williams C (2015) Asymmetric responses to earnings news: A case of ambiguity. Accounting Rev. 90(2):785–817.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.