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  Should Securities Regulation Promote Equity Crowdfunding?

Hornuf, L., & Schwienbacher, A. (2017). Should Securities Regulation Promote Equity Crowdfunding? Small Business Economics, 49(3), 579-593. doi:10.1007/s11187-017-9839-9.

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http://ssrn.com/abstract=2412124 (Preprint)
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Also published at SSRN
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 Creators:
Hornuf, Lars1, Author           
Schwienbacher, Armin2, Author
Affiliations:
1MPI for Innovation and Competition, Max Planck Society, ou_2035292              
2External Organizations, ou_persistent22              

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Free keywords: crowdinvesting, crowdfunding, securities regulation, investor protection
 Abstract: In this paper, we show that too strong investor protection may harm small firms and entrepreneurial initiatives, which contrasts with the traditional ‘law & finance’ view that stronger investor protection is better. This situation is particularly relevant in crowdinvesting, which refers to a recent financial innovation originating on the Internet and targets small, innovative firms. In many jurisdictions, securities regulation offers exemptions to prospectus and registration requirements. We provide an into-depth discussion of recent regulatory reforms in different countries and discuss how they may impact crowdinvesting. Building on a theoretical framework, we show that optimal regulation depends on the availability of alternative early-stage financing such as venture capital and angel finance. Finally, we offer exploratory portal-level evidence from Germany on the impact of securities regulation on small business finance.

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Language(s): eng - English
 Dates: 2017
 Publication Status: Issued
 Pages: -
 Publishing info: -
 Table of Contents: -
 Rev. Type: -
 Identifiers: DOI: 10.1007/s11187-017-9839-9
 Degree: -

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Title: Small Business Economics
Source Genre: Journal
 Creator(s):
Affiliations:
Publ. Info: New York : Springer
Pages: - Volume / Issue: 49 (3) Sequence Number: - Start / End Page: 579 - 593 Identifier: ISSN: 0921-898X
CoNE: https://pure.mpg.de/cone/journals/resource/954921410343