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Crowdfunding and Bank Stress

  • Daniel Blaseg
  • Michael KoetterEmail author
Chapter
Part of the New Economic Windows book series (NEW)

Abstract

Bank instability may induce borrowers to use crowdfunding as a source of external finance. A range of stress indicators help identify banks with potential credit supply constraints, which then can be linked to a unique, manually constructed sample of 157 new ventures seeking equity crowdfunding, for comparison with 200 ventures that do not use crowdfunding. The sample comprises projects from all major German equity crowdfunding platforms since 2011, augmented with controls for venture, manager, and bank characteristics. Crowdfunding is significantly more likely for new ventures that interact with stressed banks. Innovative funding sources are thus particularly relevant in times of stress among conventional financiers. But crowdfunded ventures are generally also more opaque and risky than new ventures that do not use crowdfunding.

Keywords

Crowdfunding Bank stress Funding alternative New ventures Credit crunch 

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Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  1. 1.Goethe-University FrankfurtFrankfurtGermany
  2. 2.Frankfurt School of Finance and Management, Deutsche Bundesbank, and IWHFrankfurtGermany

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