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Article
Publication date: 6 November 2017

Braam Lowies, Christa Viljoen and Stanley McGreal

The purpose of this study is to investigate the perceptions of property investors of the risks and returns associated with property crowdfunding as an investment vehicle…

Abstract

Purpose

The purpose of this study is to investigate the perceptions of property investors of the risks and returns associated with property crowdfunding as an investment vehicle. The study contributes to the understanding of alternative property investment vehicles and how it is perceived by investors.

Design/methodology/approach

The study focusses on investor perceptions in using property crowdfunding as an investment vehicle and follows a survey-based design. A questionnaire was finalised after the completion of a pilot study and was distributed to existing property crowdfunding investors via email. Inferential statistical measures were used.

Findings

The results show, to an extent, similarities to general equity-based crowdfunding studies. However, the uniqueness of property crowdfunding as an investment vehicle may explain the insignificance of the results when related to other studies. Overall, the property crowdfunding investor seems to present cautious behaviour with a conservative perception of property crowdfunding as an investment vehicle.

Practical implications

It is recommended that property crowdfunding platforms present prospective investors with more formal regulation of the property crowdfunding industry. Such a regulatory framework may lessen the current level of uncertainty presented by investors.

Originality/value

The study enhances the understanding of the role of property crowdfunding as an alternative investment vehicle in Australia. More importantly, it went some way towards enhancing the understanding of how investors perceive and behave vis-à-vis property crowdfunding as an investment vehicle.

Details

Journal of Financial Management of Property and Construction, vol. 22 no. 3
Type: Research Article
ISSN: 1366-4387

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Book part
Publication date: 26 August 2019

Surianom Miskam, Abdul Monir Yaacob and Romzie Rosman

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and…

Abstract

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and challenges to the industry. With the advances in e-finance and mobile technologies, financial technology (Fintech) innovations emerged by combining the e-finance, Internet, social networking services, social media, artificial intelligence (AI) and big data analytics. Fintech promises to reshape the Islamic financial landscape by improving processes’ efficiencies, cost-effectiveness, increased distribution, Sharīʿah compliance and financial inclusion. As far as the Islamic fund management industry is concerned, AI seems to be the keyword. Islamic fund managers have recently started to incorporate AI and big data analytics into their strategy in the process of making accurate decisions based on facts and figures, which eliminates any biases and personal intuition. This disruption in status quo is raising new issues, new concerns and new exciting opportunities. While disruption may carry negative connotations, the industry players have been embracing the innovation and potential revolution the technology could offer. Thus, the objective of this chapter is to discuss legal aspects of Fintech and its impact on the Islamic fund management industry in Malaysia. This chapter introduces a historical overview of Fintech and its evolution in the Islamic fund management industry. This chapter further provides an overview of the legal and regulatory aspects of Fintech with regards to the industry. Finally, legal issues and challenges are identified and discussed. Being a legal research, this chapter adopts a qualitative method by analysing the relevant literatures on the subject. This chapter is expected to provide an insight into the application of Fintech and its impact on the Islamic fund management industry in Malaysia.

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

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Article
Publication date: 7 February 2020

Enrico Battisti, Fabio Creta and Nicola Miglietta

This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study…

Abstract

Purpose

This paper gathers initial evidence about the nature and features of the equity crowdfunding model in Italy, especially in terms of regulations. The purpose of this study is to examine how equity crowdfunding might support the real estate sector in Italy.

Design/methodology/approach

To explore the recent initiatives in the development of FinTech in Italy, especially referring to equity crowdfunding’s instrument, a qualitative perspective is used. In particular, this paper relies on primary data from regulations and secondary data from the public domain, which are examined in relation to the current literature.

Findings

The results of this study show that equity crowdfunding represents a funding method that is rapidly increasing in Italy, despite rather rigid regulation. Among the various sectors involved, the real estate sector could benefit from the crowdfunding models and, specifically, from the equity one. The development of new real estate equity crowdfunding portals that allow diversification of investment (by reducing the typical entry barriers for real estate investment) could guarantee greater investment transparency and simplicity.

Practical implications

Real estate crowdfunding can be a simple way to invest in the real estate industry. Thanks to the use of technology, specifically internet-based platforms, this type of crowdfunding allows for small investors, as well as professional investors, to access an asset class otherwise not open to small investment tickets and improve the diversification of investments.

Originality/value

Although recent literature has examined the concept of crowdfunding and highlighted different models, aspects and campaigns, no prior studies, to the authors’ knowledge, have explicitly and jointly investigated, also based on the state of art of regulation, the equity crowdfunding model and the real estate sector in Italy.

Details

Journal of Financial Regulation and Compliance, vol. 28 no. 3
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 7 June 2019

Manuchehr Shahrokhi and A.M. Parhizgari

The purpose of this paper is to analyze the determinants and the operational aspects of real estate crowdfunding (RECF henceforth). It addresses RECF growth, drivers and…

Abstract

Purpose

The purpose of this paper is to analyze the determinants and the operational aspects of real estate crowdfunding (RECF henceforth). It addresses RECF growth, drivers and platforms in light of modern digital technology.

Design/methodology/approach

A comparison with traditional real estate funding is provided, and the ease and advantages that RECF offers to real estate investors are analyzed. The risks and rewards of crowdfunding in general and RECF in particular are also addressed.

Findings

Inasmuch as RECF appears novel and disruptive, research in this paper dates RECF back to the seventieth century. The findings thus posit that RECF is an evolutionary process while it is currently transformative and disruptive.

Originality/value

This is a novel look into RECF, particularly in terms of data, analyses and evaluation of alternatives.

Details

Managerial Finance, vol. 46 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 16 August 2018

Nicolle Montgomery, Graham Squires and Iqbal Syed

The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real…

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Abstract

Purpose

The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real estate finance industry, assessing whether RECF constitutes a potentially disruptive innovation to the real estate finance industry. Based on a review and synthesis of the literature, the paper advances an initial conceptual framework of core characteristics of disruptive innovations. This framework is used to examine the disruptive potential of RECF in the real estate finance industry.

Design/methodology/approach

This paper is a systematic literature review that synthesizes and analyzes relevant extant research articles retrieved from online databases.

Findings

Findings suggest that according to the theory of disruptive innovations, and the core characteristics of disruptive innovations, RECF is a potentially disruptive innovation to the real estate finance industry. RECF seems to generally align with the classic characteristics of disruptive innovations. A more comprehensive and systematic analysis, supported by empirical data, is necessary to evaluate whether and to what extent RECF constitutes a disruptive innovation to the real estate finance industry.

Research limitations/implications

This study has only captured and reviewed articles published and available in database searches. RECF is a nascent field that has recently begun receiving academic attention.

Practical implications

Real estate plays an integral part in the economy, and the way it is financed has become an increasingly important issue following the Global Financial Crisis. This paper provides useful insights for assessing whether and to what extent RECF may be disruptive to the real estate finance industry.

Social implications

RECF may potentially improve accessibility and affordability of real estate finance, thereby helping to address the problem of shortage of real estate project finance.

Originality/value

While RECF is portrayed in the academic and gray literature as a disruptive innovation, its disruptive potential is yet to be determined. This paper advances an initial conceptual framework of defining characteristics of disruptive innovations. This framework is used to evaluate RECF as a potentially disruptive innovation in the real estate project finance industry. This study forms a basis for future empirical examination of the disruptive potential of RECF in the real estate finance industry.

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Article
Publication date: 30 March 2020

Lucia Gibilaro and Gianluca Mattarocci

The paper aims to study the performance of crowdfunding REITs with respect to traditional REITs in order to evaluate the differences in the risk–return profile and their…

Abstract

Purpose

The paper aims to study the performance of crowdfunding REITs with respect to traditional REITs in order to evaluate the differences in the risk–return profile and their usefulness for a diversification strategy within the indirect real estate investments.

Design/methodology/approach

The paper considers the crowdfunding REITs introduced after the JOBS act in the United States and evaluates their performance and risk during the time period 2016–2018. Performance achieved by crowdfunding REITs is compared with other types of REITs in order to evaluate their usefulness for constructing an optimal portfolio strategy based on a standard mean variance approach.

Findings

Results show that the performance of crowdfunding REITs is more stable over time with respect to other REITs and the lack of correlation with traditional REITs may be exploited for constructing a more efficient diversified portfolio of indirect real estate investments.

Practical implications

Crowdfunding REITs have different performance with respect to standard REITs and, especially individual investors, may benefit from including this new investment opportunity in their portfolio.

Originality/value

The paper is the first study on the performance of the crowdfunding REITs that is evaluating their usefulness for a diversification strategy within the real estate sector.

Details

Journal of Property Investment & Finance, vol. 39 no. 2
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 21 October 2021

Gimede Gigante and Giacomo Cozzio

This study analyses the success factors of crowdfunding campaigns in the real estate sector.

Abstract

Purpose

This study analyses the success factors of crowdfunding campaigns in the real estate sector.

Design/methodology/approach

The success factors of general crowdfunding campaigns were identified then adapted to real estate and tested through multiple statistical analyses (T-tests, correlation matrices, variance inflation factor (VIF) and linear regression).

Findings

The findings shows that crowdfunding use in the real estate sector is evolving and that crowdfunding is a potentially disruptive tool in this sector. They also demonstrate that project duration and expected return on investment (ROI) play key roles in campaign success.

Research limitations/implications

Results are based on the Italian context only. Extending the analysis to other markets represents a fruitful starting point for further analysis.

Practical implications

The outcomes of the paper might be useful both for perspective entrepreneurs, who are considering crowdfunding to finance their projects, and for platforms in order to shape systems and services towards enhancing campaign success.

Originality/value

Although there are existing studies on crowdfunding success factors and applications of crowdfunding as a tool, no previous study specifically investigates the use of crowdfunding in Italian real estate by analysing success factors.

Details

Journal of Property Investment & Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 11 June 2018

Tao Wang, Xiaowei Liu, Minghui Kang and Haichao Zheng

The purpose of this paper is to examine factors affecting fundraisers’ voluntary information disclosure on crowdfunding platforms based on risk-perception theory (RPT).

Abstract

Purpose

The purpose of this paper is to examine factors affecting fundraisers’ voluntary information disclosure on crowdfunding platforms based on risk-perception theory (RPT).

Design/methodology/approach

Structural equation modeling was employed to test the hypothesized relationships using data collected from China.

Findings

The authors found that plagiarism risk and financing risk are two important variables that influence fundraisers’ voluntary information disclosure. Specifically, plagiarism risk has a negative effect on fundraisers’ voluntary information disclosure, while financing risk has a positive effect on fundraisers’ voluntary information disclosure. Plagiarism risk is affected by information concerns, perceived control, project innovativeness, and quality of alternatives, while financing risk is affected by protection policy and information norms.

Originality/value

This study enriches crowdfunding research by identifying factors influencing fundraisers’ voluntary information disclosure and contributes to RPT by applying it in a new crowdfunding context.

Details

Online Information Review, vol. 42 no. 3
Type: Research Article
ISSN: 1468-4527

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Article
Publication date: 10 July 2018

Braam Lowies, Robert Brenton Whait, Christa Viljoen and Stanley McGreal

The purpose of this paper is to determine the profile of the typical online fractional residential property investor in Australia. This study also seeks to understand the…

Abstract

Purpose

The purpose of this paper is to determine the profile of the typical online fractional residential property investor in Australia. This study also seeks to understand the motives for engaging with and investing in alternative residential property investments.

Design/methodology/approach

This study employs a survey-based design via an online questionnaire to gather information on investor age, gender, type, education levels, time horizons and investment history and risk and return expectations. It also gathers information regarding investors’ financial literacy including tax implications of fractional property investment.

Findings

The findings of this study suggest amongst others, that fractional property investors tend to be younger, although the platform also attracts older investors including older females. The study also found that investors do not select alternative investment platforms in anticipation of super-normal investment returns. Return expectations are realistic and are based on a balance between capital growth and income.

Practical implications

This study indicates that alternative investment platforms lowers the barriers of entry into residential property for first time investors. It therefore creates opportunities to allow many first time individual investors to invest in property, often as an alternative to bank savings or investing in the stock market.

Originality/value

This study enhances our understanding of the influence of alternative investment platforms on investment decision-making. More specifically, it contrasts fractional property investment with more traditional investment opportunities to understand the motives of investors for diversifying into online investment vehicles.

Details

Journal of Property Investment & Finance, vol. 36 no. 6
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 4 June 2018

Lili Liu, Ayoung Suh and Christian Wagner

Researchers have called for the synthesis of divergent perspectives and the development of a theoretical model that examines individuals’ donation behavior in charitable…

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3064

Abstract

Purpose

Researchers have called for the synthesis of divergent perspectives and the development of a theoretical model that examines individuals’ donation behavior in charitable crowdfunding. To fill this research gap, the purpose of this paper is to synthesize the literature pertaining to the determinants of donation behavior in charitable crowdfunding. Then, drawing on the stimulus-organism-response framework, the authors develop and test a model that explains individuals’ intention to donate to charitable crowdfunding.

Design/methodology/approach

This paper follows a quantitative research approach. An online survey was distributed to collect data from individuals who had experienced charitable crowdfunding. In total, 205 valid responses were received and analyzed.

Findings

First, this study finds that individuals’ empathy and the perceived credibility of a charitable crowdfunding project are key determinants for their intention to donate in charitable crowdfunding. Second, the study finds that website quality, transaction convenience, and project content quality influence both empathy and perceived credibility in different ways. Third, it is noteworthy that initiator reputation is positively related to perceived credibility, while project popularity is positively associated with empathy.

Originality/value

This research advances the knowledge of individual donation behavior in charitable crowdfunding. The model can help researchers understand individuals’ philanthropic behavior by providing empirical explanations of the interplay between technological and project characteristics, emotional and cognitive states, and individuals’ donation behavior. For practitioners, the research suggests appropriate design, launch, and operation strategies to facilitate individuals’ donation behavior in charitable crowdfunding.

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