Local bias versus home bias: Evidence from debt-based crowdfunding

Li, Jianwen; Zhou, Yang; Hu, Jinyan; Guo, Feng

doi:10.1080/00036846.2023.2200230

Cited by 1 publication

(1 citation statement)

References 64 publications

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“…Debt crowdfunding, also known as peer-to-peer (P2P) lending, allows investors to lend money to businesses or individuals and receive a return on their investment in the form of interest payments, whereas in ECF, backers receive an ownership stake in the company or project they are funding. This type of crowdfunding is regulated by the governments (Kukk, 2022;Li et al, 2023). ECF may become a crucial funding source for SMEs as they increasingly choose alternative finance (Noyes and Mandel, 2020).…”

Section: Introductionmentioning

confidence: 99%

Regulatory framework on governing equity crowdfunding: a systematic literature review and future directions

Gupta,

Singh,

Ghosh

et al. 2024

JFRC

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Purpose The purpose of this study is to comprehensively analyse and compare equity crowdfunding (ECF) regulations across 26 countries, shedding light on the diverse regulatory frameworks, investor and issuer limits and the evolution of ECF globally. By addressing this research gap and providing consolidated insights, the study aims to inform policymakers, researchers and entrepreneurs about the regulatory landscape of ECF, fostering a deeper understanding of its potential and challenges in various economies. Ultimately, the study contributes to the advancement of ECF as an alternative financing method for small and medium enterprises (SMEs) and startups, empowering them to access much-needed capital for growth. Design/methodology/approach The study used the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) model for a systematic literature review on global ECF regulations. Starting with 74 initial articles from Web of Sciences and Scopus databases, duplicates were removed and language criteria applied, leaving 42 articles. After a thorough full-text screening, 20 articles were excluded, resulting in the review of 22 papers from 2016 to 2022. PRISMA’s structured framework enhances the quality of systematic reviews, ensuring transparency and accessibility of findings for various stakeholders, including researchers, practitioners and policymakers, in the field of ECF regulations. Findings This study examines ECF regulations across various countries. Notably, the UK has advanced regulations, while the USA adopted them later through the Jumpstart Our Business Startups Act. Canada regulates at the provincial level. Malaysia and China were early adopters in Asia, but Hong Kong, Japan, Israel and India have bans. Turkey introduced regulations in 2019. New Zealand and Australia enacted laws, with Australia referring to it as “crowd-sourced equity funding”. Italy, Austria, France, Germany and Belgium have established regulations in Europe. These regulations vary in investor and issuer limits, disclosure requirements and anti-corruption measures, impacting the growth of ECF markets. Research limitations/implications This study’s findings underscore the diverse regulatory landscape governing ECF worldwide. It reveals that regulatory approaches vary from liberal to protectionist, reflecting each country’s unique economic and political context. The implications of this research highlight the need for cross-country analysis to inform practical implementation and the effectiveness of emerging ECF ecosystems. This knowledge can inspire regulatory adjustments, support startups and foster entrepreneurial growth in emerging economies, ultimately reshaping early-stage funding for new-age startups and SMEs on a global scale. Originality/value This study’s originality lies in its comprehensive analysis of ECF regulations across 26 diverse countries, shedding light on the intricate interplay between regulatory frameworks and a nation’s political-economic landscape. By delving into the nuanced variations in investor limits, investment types and regulatory strategies, it unveils the multifaceted nature of ECF regulation globally. Furthermore, this research adds value by comparing divergent perspectives on investment constraints and offering an understanding of their impact on ECF efficacy. Ultimately, the study’s unique contribution lies in its potential to inform practical implementation, shape legislative frameworks and catalyse entrepreneurial ecosystems in emerging economies, propelling the evolution of early-stage funding practices.

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Section: Introductionmentioning

confidence: 99%