Sustainable Equity Crowdfunding Projects: Are They A Driving Force to Revitalise Italy After Global Socio-Economic Consequences of The COVID-19?

Maria Manganiello,Irina-Virginia Dragulanescu,T Kliestik

doi:10.1051/shsconf/20219201030

Maria Manganiello, Irina-Virginia Dragulanescu + Show 1 more

Open Access

https://doi.org/10.1051/shsconf/20219201030

Copy DOI

Abstract

Research background:The outbreak of COVID-19 has disrupted and shaken all economic and financial sectors. In this scenario, crowdfunding has emerged as a new relevant financing mechanism alongside more traditional funding channels by attracting investors through an internet-based method of fundraising to support ventures. In recent years, many crowdfunding platforms, specialized in green projects rose, allowing start-ups to raise funds for their campaigns. The literature on the use of crowdfunding in the sustainable sector is quite limited.Purpose of the article:We use a hand-collected dataset of 350 equity crowdfunding campaigns, gathered from the Italian platforms over the period January 2016-June 2020, to analyze the impact of COVID-19 outbreak on the success of green equity crowdfunding projects. We also test the greater attractiveness of the projects sustainability-oriented than other types of campaigns and if growth in the number of “green” projects is linked to the increase of local environmental performance.Methods:We measure the probability of success of pitched projects, both in terms of the total amount raised and the number of investors. We run a negative-binomial-regression for the number of investors and a Tobit-regression for the amount of capital raised.Findings & Value added:Coherently with our hypotheses, we find that COVID-19 has reduced the probability of success and that campaigns with a sustainability orientation are more likely to reach the funding target because investors give more importance to a sustainable future. Finally, our search provides that the leading countries in environmental performance have a positive effect on the green crowdfunding projects, by aspiring to move toward a sustainable future.

Highlights

Sustainability is becoming more important for companies across all industries
Our first research question is to investigate if the key drivers that brought the crowd to finance a green equity crowdfunding campaign before COVID-19 are the same nowadays
The study has a relevant impact on the sustainable energy generation because crowdfunding has the potential to represent an interesting source of capital, combining the opportunity of a profit with the desire to contribute to climate action initiatives

Summary

Introduction

Many firms' executives consider a sustainability strategy necessary to be competitive today and to be it in the future. Sustainable finance is a phenomenon increasingly of interest to investors who are more and more demanding reliable information on environmental, social, and governance issues. Crowdfunding is a new means to finance sustainability-oriented projects, as an alternative to traditional financing channels for sourcing capital to support innovative, entrepreneurial ideas and ventures, like equity capital provided by professional investors and bank loans. Crowdfunding is an innovative and relatively new concept that connects investors to entrepreneurs. It is a new internet-based method of fundraising, based on the ability to pool money from potential investors that participate in the future cash flows of a firm [1]

Methods

Results

Conclusion