"Signaling in Equity Crowdfunding" is the title of the paper that received this year's Helena Yli-Renko Research Impact Award. Its authors include Prof. Dr. Christina Günther, holder of the IHK Chair for Small and Medium-Sized Enterprises at WHU - Otto Beisheim School of Management, as well as Gerrit Ahlers (Kearney), Douglas Cumming (Florida Atlantic University), and Denis Schweizer (Concordia University). "We are extremely pleased to receive this international award, as well as with the impact our study has on entrepreneurship research," said Christina Günther. "Our research provides founders and young companies with a better basis for increasing the likelihood of success for financing their business or growth via equity crowdfunding. It also provides researchers with a starting point for further research on this financing tool."
The award, sponsored by the USC Greif Center for Entrepreneurial Studies, is given annually to a research paper published six years earlier that has been cited the most in subsequent years. This is measured by the Social Sciences Citation Index, an interdisciplinary citation database that includes more than 3100 journals from more than 50 social science disciplines. The Impact Award has now been presented to the authors at the 81st meeting of the Academy of Management.
The much-cited study, "Signaling in equity crowdfunding," was the first to empirically investigate the effectiveness of the signals entrepreneurs use to persuade (small) investors to provide funding through equity crowdfunding. The influence of human capital, social capital, and intellectual capital as well as uncertainty on the success of fundraising was investigated. The work was able to demonstrate that retaining equity and disclosing detailed information about risks are interpreted as effective signals and therefore have a significant impact on the likelihood of funding success. In contrast, social capital and intellectual capital had little impact on financing success.
Original publication
Ahlers, G. K., Cumming, D., Günther, C., & Schweizer, D. (2015): Signaling in equity crowdfunding, in: Entrepreneurship Theory & Practice, 39(4), 955-980.