Please use this identifier to cite or link to this item: http://hdl.handle.net/20.500.11861/9365
Title: Rational herding: Evidence from equity crowdfunding
Authors: Yi, Lan 
Dr. SHEN Na, Nell 
Xie, Wen 
Liu, Yue 
Issue Date: 2024
Source: Management Decision, 2024, vol. 62(3), pp. 1008-1029.
Journal: Management Decision 
Abstract: Purpose This study explores whether herd behavior exists for equity crowdfunding investors in China and whether this herding is rational. Design/methodology/approach Based on signaling theory and social learning theory, two hypotheses were proposed. This study employed two approaches to collect data. First, this paper analyzed 3,041 investments on an equity crowdfunding platform in China using Python programming and built a panel data model. Second, based on a unique experiment design, this study conducted several relevant herd behavior simulation experiments. Findings We found that investors in the Chinese equity crowdfunding market exhibit herd behavior and that this herding is rational. Project attributes play a negative role in moderating the relationship between the current investment amount and cumulative investments. Experimental results further support our findings. Originality/value This study contributes to the emerging literature on herding in crowdfunding by focusing on equity crowdfunding in China. We are the first to explore whether Chinese equity crowdfunding investors exhibit rational herding behavior. The study is also original in applying social learning theory to equity crowdfunding and in using both actual crowdfunding campaigns and experimental approaches to collect data. This study has valuable implications to practice.
Type: Peer Reviewed Journal Article
URI: http://hdl.handle.net/20.500.11861/9365
ISSN: 0025-1747
1758-6070
DOI: 10.1108/MD-09-2022-1310
Appears in Collections:Business Administration - Publication

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