Financial Reporting and Entrepreneurial Finance: Evidence from Equity Crowdfunding

• 成果类型: Article
• 署名作者: Donovan, John
• 署名单位: University of Notre Dame
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3810
• 发表日期: 2021
• 页码: 7214-7237
• 关键词: Crowdfunding; entrepreneurship; Financial reporting; regulation

摘要

I study the role of accounting and financial reporting in entrepreneurial finance by examining whether financial statement disclosure increases capital raised through equity crowdfunding. On average, I find a positive association between financial reporting and capital raised, suggesting that accounting reduces information asymmetry with potential investors. Additionally, the importance of financial reporting in equity crowdfunding varies predictably in the cross-section. Specifically, financial reporting is associated with greater capital raised when the firm has longer historical operations, during periods of higher macroeconomic uncertainty, and when complemented by detailed shareholder agreements. Finally, using a mediation analysis, I find evidence that financial reporting is indirectly associated with better ex post performance by increasing the likelihood of raising capital. These results provide insight into the role of financial reporting in entrepreneurial finance and inform the ongoing debate over regulation and disclosure in the equity crowdfunding market.