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This paper is about equity crowdfunding syndicates as a form of entrepreneurial finance and looks specifically at the lead investors' human capital and their ability to raise funds.

The authors develop regressions on a unique hand-collected dataset of 178 lead investors taken from the US-based platform AngelList.

Results indicate that lead investors' specialized human capital has a positive effect on their syndicate fundraising performance. However, it does not find a significant effect of general human capital. It also finds that specialized human capital is mediated by the reputation of the lead investor on the platform.

This study extends human capital theory in the crowdfunding context by providing a more comprehensive portrait of human capital and in doing so, shifts the focus from an entrepreneur to an investor perspective, an approach much neglected in the crowdfunding literature.

This study advances the current knowledge on crowdfunding as it is one of the first to understand syndicate investment as an innovative and alternative platform-based financial channel. It also contributes to the current debate on the role of human capital in crowdfunding and more generally to entrepreneurial finance.

The purpose of this paper is to explore the role of trust in the unobservable decision-making process of lead investors and follow-on investors in the specific context of equity crowdfunding (ECF) campaigns.

This work employs a case study approach. The author conducts a three-year inductive field study of Chinese ECF – AngelCrunch. The author gathered both campaign and platform-level data from the selected case covering a period of seven years from 2011 to 2018. The data set used for this study includes the characteristics of 189 online campaigns, 25 face-to-face interviews with the platform managers, early-stage investors and entrepreneurs, first-hand observations and quarterly reports on online campaigns supplemented with informal interviews with the authors for the reports.

The findings from this study provide early insights onto the unobservable decision-making process of ECF investors. It demonstrates that lead investors use both selective signalling information and physical interactions with the entrepreneurs to build competence and relational trust on which they rely for making an early pledge. It also shows that follow-on investors differ from lead investors in the process of building trust for decision-making. Furthermore, this work uncovers the role of ECF platforms in facilitating the process of building interpersonal trust for the decision making, with challenges to maintain the notion of platforms in raising a small amount of capital from a large crowd.

This study is constrained by the limited scale of qualitative elements available. The findings of the study have implications for platform managers, investors and policy makers.

Building on entrepreneurial finance and trust theory, this work demonstrates how lead investors build competence and relational trust on which they rely to make an early pledge in the context of ECF. The perception of a lead investor and the commitment together with the selective and formative information by the entrepreneur/s are key in follow-on investors’ decision making. This study uncovers that crowdfunding enables additional and valuable information to be assessed by crowd investors to manage extreme risk and uncertainty occurred in early-stage investments. This work also demonstrates that virtual world has its limitations to build interpersonal trust for managing extreme risk.

The purpose of this paper is to examine market reactions to private equity placements and intra-industry information spillover effects in the Taiwan Stock Exchange.

The authors first use the market model to compute the abnormal announcement returns. To examine the joint impact of the private investment in public equity (PIPE) purposes and the lead investor industry, the authors regress the issuers’ cumulative abnormal returns (CARs) on the dummy variables of PIPE purposes and the lead investor industry. To study the spillover effects, the authors regress the rivals’ CARs on the issuers’ CARs, PIPE purposes, and the lead investor industry. Finally, the industry Herfindahl index is used as a proxy for the market power of issuers and rivals to examine its impact on the spillover effects.

The authors find that issuing firms experience positive abnormal returns during the announcement period. Issuers enjoy more positive market reactions when the proceeds of offerings are primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the same industry. Furthermore, the authors show that the contagion effect dominates the competitive effect in private equity placements at the aggregate level. At the subsample level, the authors find competitive effect overpowers contagion effect when the purpose of offerings is primarily used to establish a long-term strategic alliance or to integrate business and when the lead investor is in the different industry. Finally, the authors show that rivals with relative lower market power enjoy more positive contagion effects.

First, the analysis documents the simultaneous importance of both the purposes of private offerings and the lead investor’s industry on announcement reactions, which shed new light on the positive abnormal returns during the announcement period. Second, the study adds to the literature on the information spillover effects by analyzing the role played by purposes of offerings and rivals’ market power. This paper provides a more complete picture of the offsetting competitive and contagion effects.

Alongside its remarkable growth, problematic Bitcoin investment (BI) behavior and its associated negative consequences have become prevalent, and only a few studies have examined it. Therefore, this study aims to examine problematic BI behavior by investigating its specific antecedents and consequences and identifying which antecedents were more influential in it. In addition, we also examine the role of financial literacy on the relationship between the antecedents and problematic BI behavior.

We collected survey data from 413 investors with Bitcoin investment experience in 2018, when a Bitcoin frenzy occurred. The partial least squares method was used to test the proposed research model.

The results show that prudent, negative urgency, overexpectation and sensation seeking are positively associated with problematic BI behavior, while restraint is negatively associated. Problematic BI behavior is negatively related to investor well-being. Our findings also indicate that both objective and subjective financial literacy moderate the relationship between the antecedents and problematic BI behavior. Four types of investors in terms of their objective and subjective Bitcoin knowledge show different patterns in the relationship between the antecedents and problematic BI behavior.

This study offers insights for researchers by providing a deeper understanding of the contextual antecedents of problematic BI behavior and the role of financial literacy in it. This study provides detailed implications for financial institutions, policymakers, and regulators to guide rational Bitcoin investment behaviors.

This paper aims to investigate the role of informational and relational mechanisms on equity crowdfunding investors' conformity behaviors by focusing on a relational culture of China.

The data of 108 financing projects and 7,688 investment records from a union of Chinese equity crowdfunding platforms are gathered. Lead investors' response to a campaign and follow-investors’ former links explain investors' conformity by social network analysis (SNA) and ordinary least squares (OLS) analysis.

The results show that informational and relational influences drive conformity in Chinese equity crowdfunding. Moreover, the informational influence weakens in a highly centralized structure of linked investors.

The results add new knowledge to follow-investors’ conformity behaviors in equity crowdfunding and enrich the literature on conformity theory by finding the contextual effect of information-influenced conformity and the adaption of conformity theory to cultural uniqueness. Besides, this preliminary work also suggests opportunities for future research.

The paper inspires new consideration on a strategical use of follow-investors’ conformity mentality to promote successfully financing and reminds platform managers to be alert to the interference of small groups formed based on informal relationships to the normal financing order.

This is the first study that discovers the non-informational influence and the limited influence of information on equity crowdfunding conformity through contextual concerns.

This article aims to systematically review the literature published in recognized journals focused on cognitive heuristic-driven biases and their effect on investment management activities and market efficiency. It also includes some of the research work on the origins and foundations of behavioral finance, and how this has grown substantially to become an established and particular subject of study in its own right. The study also aims to provide future direction to the researchers working in this field.

For doing research synthesis, a systematic literature review (SLR) approach was applied considering research studies published within the time period, i.e. 1970–2021. This study attempted to accomplish a critical review of 176 studies out of 256 studies identified, which were published in reputable journals to synthesize the existing literature in the behavioral finance domain-related explicitly to cognitive heuristic-driven biases and their effect on investment management activities and market efficiency as well as on the origins and foundations of behavioral finance.

This review reveals that investors often use cognitive heuristics to reduce the risk of losses in uncertain situations, but that leads to errors in judgment; as a result, investors make irrational decisions, which may cause the market to overreact or underreact – in both situations, the market becomes inefficient. Overall, the literature demonstrates that there is currently no consensus on the usefulness of cognitive heuristics in the context of investment management activities and market efficiency. Therefore, a lack of consensus about this topic suggests that further studies may bring relevant contributions to the literature. Based on the gaps analysis, three major categories of gaps, namely theoretical and methodological gaps, and contextual gaps, are found, where research is needed.

The skillful understanding and knowledge of the cognitive heuristic-driven biases will help the investors, financial institutions and policymakers to overcome the adverse effect of these behavioral biases in the stock market. This article provides a detailed explanation of cognitive heuristic-driven biases and their influence on investment management activities and market efficiency, which could be very useful for finance practitioners, such as an investor who plays at the stock exchange, a portfolio manager, a financial strategist/advisor in an investment firm, a financial planner, an investment banker, a trader/broker at the stock exchange or a financial analyst. But most importantly, the term also includes all those persons who manage corporate entities and are responsible for making their financial management strategies.

Currently, no recent study exists, which reviews and evaluates the empirical research on cognitive heuristic-driven biases displayed by investors. The current study is original in discussing the role of cognitive heuristic-driven biases in investment management activities and market efficiency as well as the history and foundations of behavioral finance by means of research synthesis. This paper is useful to researchers, academicians, policymakers and those working in the area of behavioral finance in understanding the role that cognitive heuristic plays in investment management activities and market efficiency.

The main purpose of this research is to empirically test the impacts of emotional intelligence score and emotional intelligence processing on the performance of investor’s portfolio.

A mail questionnaire survey was conducted on a sample of 983 international investors. The total number of usable responses received was 197 giving a response rate of 20.4 per cent. From 197 investors, 46 accepted to complete the experiment study during two trading hours for each investor from January first until February 19, 2015.

The results reveal a positive impact of emotional intelligence on portfolio performance. Additional analysis shows that the emotional intelligence process has a significant impact on the portfolio performance. The higher impact is revealed when the investors understand the markets tendency, manage their own emotions, take their financial decisions and finally control their personnel emotions during market fluctuations. The lower impact is detected when investors take reactive decisions after perceiving the markets tendency. This research also reveals that the investors have high capacity to manage and control their emotions during market fluctuations especially who are characterized by high emotional intelligence level.

The first limit of this research is the exploration of limited number of investors and financial operations during limited period. Therefore, the results could not be generalized, and further studies should include larger samples during larger period. The second limitation concerns the used variables to measure the portfolio performance and the emotional intelligence level. For future studies, it will be preferred to use other quantitative and qualitative variables lead to measure the different analytical dimensions of portfolio performance and emotional intelligence.

The results hold implications for investors that seek to enhance efficiently and effectively the portfolio performance. It also prompts investors to focus on effort that can improve the management and the control of personnel emotions.

This paper presents one of the first empirical studies that attempt to explore how emotional intelligence and, particularly, emotional process serve to sustain the performance of portfolio during market fluctuations.

Belonging to the financial technologies’ companies, equity-based crowdfunding platforms offer investors the opportunity to become shareholders through the purchase of small equity stakes of new innovative ventures. This paper aims to investigate gender-related differences in the behaviour of investors in firms seeking equity financing in Latin America.

Using a unique database, with combined information from different equity crowdfunding platforms in Brazil, Chile and Mexico, the authors study the population of 492 projects between 2013 and 2017. To analyse the relationship between investors’ gender-related differences and equity crowdfunding investment, this paper applies Poisson regression.

Results suggest that the probability that an investor finances a firm is based on gender bias. Investors prefer firms led by entrepreneurs that are similar to them in terms of gender. Furthermore, the authors find evidence that both female and male investors are risk-averse and are more likely to invest in the equity of firms that are older and offer a higher percentage of equity. However, female investors are associated with firms that are on average older and offer 0.02% more equity.

These findings have implications for crowdfunding platforms managers when selecting their target companies and policymakers when defining political actions to promote greater use of equity crowdfunding among female entrepreneurs and decrease barriers hindering women’s access to investment.

Unique in its proposition and data usage, this study sheds light on the relationship between investors and entrepreneurs in the Latin American equity crowdfunding market.

Women-led companies receive less than 5 per cent of early-stage equity investment. This paper aims to explore the disparity in equity funding between men- and women-led companies, using a social identity perspective, complemented by insights from signaling theory. We argue that in the angel group context, which is male-dominated, gender stereotypes may bias angels’ interpretation of the signals sent by entrepreneurs, so that entrepreneurial ventures led by men are more favorably evaluated, thus excluding women entrepreneurs from funding. The ideas are tested on a sample of 358 entrepreneurs who applied for funding from a northeast US angel group using perceptual data from both sides of the investment dyad. Findings suggest that angel investors view women-led entrepreneurial ventures as having less legitimacy, even though we see no difference in actual legitimacy across ventures.

The ideas are tested on a sample of 358 entrepreneurs who applied for funding from a northeast angel group using perceptual data from both sides of the investment dyad.

The findings suggest that, in the context of angel investing, there is a subtle bias that follows from the perceived stereotype between being female and the ability to lead a legitimate new venture. Thus, this study tests the tenets of the social identity theory by finding that mostly male angel investors act in accordance to their gender prescribed roles when they evaluate businesses presented by women entrepreneurs providing some evidence of “in-group” and “out-group” effects and stereotypes.

The findings continue the conversation about biases toward women in early-stage financing by using a social identity lens to look at the way in which adopted identities lead to particular outcomes and stereotypes. The authors have used the context of angel investing to test these ideas, finding some support for their contention that gender is pivotal when angels are making investment decisions. For researchers, this study suggests that gender should not be used solely as a control variable, but instead should be the focus of the inquiry itself.

For practitioners, this study reminds women seeking angel investment that they are not playing on a level field and so they should do all that they can to enhance the legitimacy of themselves and their ventures.

The authors contend that within an angel group that is composed of predominantly men, role stereotypes of entrepreneurs as masculine will be expected, therefore creating gender biases against women. The authors expect these biases, whether conscious or unconscious, will lead the angel investors to evaluate men entrepreneurs more favorably than women entrepreneurs as they move through the angel investment process. Therefore, for women entrepreneurs in the early stages of investment funding, the authors posit that the dearth of funding is a function of gender identity stereotypes which may be manifested in hidden and often unconscious biases on the part of the angel investor.

This study aims to use a qualitative approach to explore and clarify the mechanism by which heuristic-driven biases influence the decisions and performance of individual investors actively trading on the Pakistan Stock Exchange (PSX). It also aims to identify how to overcome the negative effect of heuristic-driven biases, so that finance practitioners can avoid the expensive errors which they cause.

This study adopts an interpretative approach. Qualitative data was collected in semistructured interviews, in which the target population was asked open-ended questions. The sample consists of five brokers and/or investment strategists/advisors who maintain investors’ accounts or provide investment advice to investors on the PSX, who were selected on a convenient basis. The researchers analyzed the interview data thematically.

The results confirm that investors often use heuristics, causing several heuristic-driven biases when trading on the stock market, specifically, reliance on recognition-based heuristics, namely, alphabetical ordering of firm names, name memorability and name fluency, as well as cognitive heuristics, such as herding behavior, disposition effect, anchoring and adjustment, repetitiveness, overconfidence and availability biases. These lead investors to make suboptimal decisions relating to their investment management activities. Due to these heuristic-driven biases, investors trade excessively in the stock market, and their investment performance is adversely affected.

This study provides a practical framework to explore and clarify the mechanism by which heuristic-driven biases influence investment management activities. To the best of authors’ knowledge, the current study is the first to focus on links between heuristic-driven biases, investment decisions and performance using a qualitative approach. Furthermore, with the help of a qualitative approach, the investigators also highlight some factors causing an increased use of heuristic variables by investors and discuss practical approaches to overcoming the negative effects of heuristics factors, so that finance practitioners can avoid repeating the expensive errors which they cause, which also differentiates this study from others.