Academic publications

ACADEMIC PUBLICATIONS

  • “Testing-the-Waters Policy with Hypothetical Investment: Evidence form Equity Crowdfunding,” with D. Cumming, F. Hervé, and E. Manthé, Entrepreneurship Theory and Practice, forthcoming.

Abstract: Digitization has enabled “testing-the-waters” in entrepreneurial finance whereby investors can make nonbinding commitments in equity crowdfunding prior to an actual campaign to ascertain interest in the project. We consider whether these nonbinding equity investment commitments are informative about actual investments during the campaign and thus ultimate startup funding success. The data indicate that only 18% of nonbinding commitments are actually invested. The evidence is consistent with hypothetical bias. Hypothetical bias is significantly less pronounced among women and among investors with greater social capital, proxied by education and wealth. While investment intentions are only partially reliable at the individual level, the aggregate amount of collected investment intentions is a strong predictor of campaign success. We investigate alternative reasons for withdrawals, such as lying and informational motives, both of which we find implausible alternatives to hypothetical bias.

  • “Initial Coin Offerings, Information Disclosure, and Fraud,” with L. Hornuf and Th. Kück, Small Business Economics, forthcoming.

Abstract: We study the extent of fraud in initial coin offerings (ICOs), and whether information disclosure prior to the issuance predicts fraud. We document different types of fraud, and that fraudulent ICOs are on average much larger than the sample average. Issuers that disclose their code on GitHub are more likely to be targeted by phishing and hacker activities, which suggests that there are risks related to disclosing the code. Generally, we find it extremely difficult to predict fraud with the information available at the time of issuance. This calls for the need to install a third-party that certifies the quality of the issuers, such as specialized platforms, or the engagement of institutional investors and venture capital funds that can perform a due diligence and thus verify the quality of the project.

  • “The Relevance of Investor Rights in Equity Crowdfunding,” with L. Hornuf and T. Schilling, Journal of Corporate Finance, 101927.

Abstract: A common assumption is that entrepreneurs retain more control of their venture when opting for equity crowdfunding (ECF) rather than venture capital. In this article, we investigate the relevance of cash-flow, control, and exit rights awarded to crowd investors in Germany, where more flexible ECF contracts are offered than in many other countries. In Germany, many of the rights used in venture capital investment contracts are also prevalent in ECF contracts. We find that crowd investors are asked to pay higher prices if they receive more cash-flow and exit rights, consistent with the view that these rights are valuable to the crowd. However, we find no evidence that these rights affect campaign outcome, the likelihood of securing follow-on funding, or the insolvency likelihood of the venture. We interpret this as evidence that investor rights in ECF are irrelevant. Furthermore, crowd investors neither trigger insolvency proceedings nor mention the enforcement of their contractual rights in investor communication blogs or popular media. These results are in contrast with control rights theory and the results documented for venture capital contracts. Our research thus suggests that rights given to crowd investors are either ineffective or not exercised.

  • “How Do Banks Interact with Fintech Startups?” with L. Hornuf, M. F. Klus, and T. S. Lohwasser, Small Business Economics, forthcoming.

Abstract: The increasing pervasiveness of technology-driven firms that offer financial services has led to growing pressure on traditional banks to modernize their core business activities and services. Many banks tackle the challenges of digitalization by cooperating with startup firms that offer technology-driven financial services and novel service packages (fintechs). In this article, we examine which banks typically collaborate with fintechs, how intensely they do so, and which form of alliance they prefer. Using hand-collected data covering the largest banks from Canada, France, Germany, and the United Kingdom, we provide detailed evidence on the different forms of alliances occurring in practice. We show that banks are significantly more likely to form alliances with fintechs when they pursue a well-defined digital strategy and/or employ a chief digital officer. Moreover, in line with incomplete contract theory, we find that banks more frequently invest in small fintechs but often build product-related collaborations with larger fintechs.

  • “Do Venture Capital Firms Benefit from International Syndicates?,” with A. Khurshed, A. Mohamed and F. Wang, Journal of International Business Studies, forthcoming.

  • “Entrepreneurial Fintech Clusters,” with M. Gazel, Small Business Economics, forthcoming.

Abstract: We study the formation and dynamics of entrepreneurial clusters in the emerging fintech industry. Using detailed data on the almost 1000 fintech startups in France to date, we find that most fintechs are geographically clustered and that the location of new fintech startups is affected, among other things, by the size of clusters and the presence of incubators. Larger clusters attract more new fintech startups, and incubators are shown to be an effective mechanism to attract new fintech startups. We further examine entrepreneurial exits of fintechs and find that being located in a larger cluster reduces the risk of failure but increases the likelihood of being acquired. Increased competition within a given segment of fintech increases failure rates. Moreover, the risk of failure is significantly lower for fintech startups that have been developed in an incubator.

  • “Crowdfunding Models: Keep-it-All vs. All-or-Nothing,” with D. Cumming and G. Leboeuf, Financial Management, forthcoming.

Abstract: Reward-based crowdfunding campaigns are commonly offered in one of two models via fundraising goals set by an entrepreneur: “Keep-It-All” (KIA), where the entrepreneur keeps the entire amount raised regardless of achieving the goal, and “All-Or-Nothing” (AON), where the entrepreneur keeps nothing unless the goal is achieved. We hypothesize that AON forces the entrepreneur to bear greater risk and encourages crowdfunders to pledge more capital enabling entrepreneurs to set larger goals. We further hypothesize that AON is a costly signal of commitment for entrepreneurs yielding a separate equilibrium with higher quality and more innovative projects with greater success rates. Empirical tests support both hypotheses.


  • “The Narcissism of Crowdfunding Entrepreneurs,” with H. Bollaert and G. Leboeuf, Small Business Economics, forthcoming.

  • (Book chapter) “Equity Crowdfunding and Capital Formation for Early-Stage Firms,” in: Palgrave-MacMillan Handbook on Alternative Finance. Palgrave-MacMillan (Ed. R. Rau and R. Wardrop), forthcoming.

  • “Herd Behavior in Buyout Investments,” with A. Buchner and A. Mohamed (2020), Journal of Corporate Finance 60, 101503.

  • “Tranching in the Syndicated Loan Market around the World,” with D. Cumming, F. Lopez-de-Silanes and J. McCahery (2020), Journal of International Business Studies 51, pp. 95-120.

  • “Incentives Work: Performance-Related Remuneration of Directors Before and During the Great Depression in Belgium,” with M. Deloof and V. Vermoesen (2020), European Review of Economic History 24 (1), pp. 192-218.

  • “Determinants of Individual Investment Decisions in Investment-Based Crowdfunding,” with F. Hervé, E. Manthé and A. Sannajust (2019), Journal of Business Finance and Accounting 46 (5-6), pp. 762-783.

  • “Equity Crowdfunding: Anything to Celebrate?” (2019), Venture Capital: An International Journal of Entrepreneurial Finance 21 (1), 65-74.

  • “The Economic Impact of Forming a European Stock Company,” with L. Hornuf and A. Mohamed (2019), Journal of Common Market Studies 57 (4), pp. 659–674.

  • (Book chapter) “Effets de réseau et financement participatif : une analyse empirique,” with P. Belleflamme and Th. Lambert (2018), in: Financement participatif : une voie d'avenir pour la culture ? Presse de Sciences Po (Ed. F. Moreau and Y. Nicolas), pp. 21-101.

  • (Book chapter) “The Structure and Role of the Underwriting Syndicate,” with S. Dereeper (2018), in: The Oxford Handbook of IPOs: Oxford University Press (Ed. D. Cumming and S. Johan), pp. 390-411.

  • “Entrepreneurial Risk-Taking in Crowdfunding Campaigns” (2018), Small Business Economics 51 (4), 843-859.

  • “Crowdfunding and Innovation,” with F. Hervé (2018), Journal of Economic Surveys 32 (5), 1514-1530.

  • “Round-Number Bias in Investment: Evidence from Equity Crowdfunding,” with F. Hervé (2018), Finance 39, 71-105.

  • “Fintech Venture Capital,” with D. Cumming (2018), Corporate Governance: An International Review 26, 374-389.

  • “Equity Crowdfunding: First Resort of Last Resort?,” with X. Walthoff-Borm and T. Vanacker (2018), Journal of Business Venturing 33, 513-533.

  • “The Political Economy of Financial Systems: Evidence from Suffrage Reforms in the Last Two Centuries,” with H. Degryse and Th. Lambert (2018), Economic Journal 128 (611), pp. 1433-1475.

  • “Market Mechanisms and Funding Dynamics in Equity Crowdfunding,” with L. Hornuf, Journal of Corporate Finance 50, pp. 556-574 (available on open access).

  • (Book chapter) “Crowdfunding as a New Financing Tool,” with G. Leboeuf (2018), in: The Economics of Crowdfunding — Startups, Portals and Investor Behavior: Palgrave Macmillan (Ed. D. Cumming and L. Hornuf), pp. 11-28.

  • “Internet-Based Entrepreneurial Finance: Lessons from Germany,” with L. Hornuf (2018), California Management Review 60 (2), pp. 150-175.

  • “Should Securities Regulation Promote Equity Crowdfunding?,” with L. Hornuf (2017), Small Business Economics 49 (3), pp. 579-593 (available on open access).

  • “Diversification, Risk and Returns in Venture Capital,” with A. Mohamed and A. Buchner (2017), Journal of Business Venturing 32, pp. 519-535.

  • “Crowdfunding Cleantech,” with D. Cumming and G. Leboeuf (2017), Energy Economics 65, pp. 292-303.

  • “Private Equity Fundraising and Firm Specialization,” with M. Gejadze and P. Giot (2017), Quarterly Review of Economics and Finance 64, pp. 259-274.

  • “Does Risk Explain Persistence in Private Equity Performance?,” with A. Mohamed and A. Buchner (2016), Journal of Corporate Finance 39, pp. 18-35.

  • (Book chapter) “The Internet, Crowdfunding, and the Banking Industry” (2016), in: The Palgrave Handbook of European Banking: Palgrave Macmillan (Ed. Th. Beck and B. Casu), pp. 213-229.

  • “Crowdfunding and the ‘Alternativfinanzierungsgesetz’ in Austria” (2016), CESifo DICE Report – Journal for Institutional Comparisons 2 (June), pp. 33-36.

  • “Venture Capital Investors and Foreign Listing Choices of Chinese Companies,” with C. Cheng (2016), Emerging Markets Review 29, pp. 42-67.

  • (Book chapter) “Le Financement Entrepreneurial,” with C. Van Wymeersch (2016), in: Entreprendre : Une Introduction à l’Entrepreneuriat (2e Edition): Edition De Boeck (Ed. F. Janssen), pp. 129-150.

  • (Book chapter) “Crowdinvesting – Angel Investing for the Masses?,” with L. Hornuf (2016), in: Handbook of Research on Business Angels: Edward Elgar (Ed. C. Mason and H. Landström), pp. 381-397.

  • “Paulson Plan Credits,” with E. de Bodt and F. Lobez (2016), Finance 37 (1), pp. 97-112.

  • “Voluntary Disclosure of Corporate Venture Capital Investments,” with A. Mohamed (2016), Journal of Banking & Finance 68, pp. 69-83.

  • “Overcollateralization in Corporate Securitizations,” with I. Riachi (2015), Finance 36 (3), pp. 7-52.

  • “The Scope of International Mutual Fund Outsourcing: Fees, Performance and Risks,” with D. Cumming and Feng Zhan (2015), Journal of International Financial Markets, Institutions & Money 38, pp. 185-199.

  • (Book chapter) “Le Crowdinvesting : Une Nouvelle Forme de Finance Entrepreneuriale” (2015), in: Le Financement de l’Innovation: Nouvelles Perspectives Théoriques & Pratiques: Edition De Boeck (Ed. V. Bessière and E. Stéphany).

  • “International Analysis of Venture Capital Programs of Large Companies and Financial Institutions,” with L. Da Gbadji and B. Gailly (2015), Entrepreneurship Theory and Practice 39 (5), pp. 1213-1245.

  • “Investment, Firm Performance and Securitization: Evidence from Industrial Companies,” with I. Riachi (2015), Finance Research Letters 13, pp. 17-28.

  • (Book chapter) “Financing the Business” (2015), in: Routledge Companion on Entrepreneurship: Routledge (Ed. T. Baker and F. Welter), pp. 193-206.

  • “Are Novice Private Equity Funds Risk-Takers? Evidence From a Comparison with Established Funds,” with P. Giot and U. Hege (2014), Journal of Corporate Finance 27, pp. 55-71.

  • “Crowdfunding: Tapping the Right Crowd,” with P. Belleflamme and Th. Lambert (2014), Journal of Business Venturing 29(5), pp. 585-609.

  • “Debt Capacity of Real Estate Collateral,” with E. Giambona and J. Golec (2014), Real Estate Economics 42 (3), pp. 578–605.

  • “Securitization of Corporate Assets and Executive Compensation,” with I. Riachi (2013), Journal of Corporate Finance 21, pp. 235–251.

  • “The Entrepreneur’s Investor Choice: The Impact on Later-Stage Firm Development” (2013), Journal of Business Venturing 28 (4), pp. 528-545.

  • “Legality and the Spread of Voluntary Investor Protection,” with D. Cumming and G. Imad’Eddine (2013), Finance 34 (3), pp. 31-66.

  • “Individual Crowdfunding Practices,” with P. Belleflamme and Th. Lambert (2013), Venture Capital: An International Journal of Entrepreneurial Finance 15 (4 - Special Issue), pp. 313-333.

  • “Underwriting Syndicate Structure and Lead Manager Reputation: An Empirical Study on European Stock Markets,” with A. Bernoussi and S. Dereeper (2013), Finance 34 (2), pp. 7-34.

  • “International Capital Flows into the European Private Equity Market,” with G. Imad’Eddine (2013), European Financial Management 19 (2), pp. 366-398.

  • “Harmonized Regulatory Standards, International Distribution of Investment Funds and the Recent Financial Crisis,” with D. Cumming and G. Imad’Eddine (2012), European Journal of Finance 18 (3-4), pp. 261-292.

  • (Book chapter) “Crowdfunding of Small Entrepreneurial Ventures,” with B. Larralde (2012), Chapter of The Oxford Handbook of Entrepreneurial Finance: Oxford University Press (Ed. D. Cumming).

  • “When Bank Loans Are Bad News: Evidence from Market Reactions to Loan Announcements under the Risk of Expropriation,” with W. Huang and S. Zhao (2012), Journal of International Financial Markets, Institutions & Money 22, pp. 233-252.

  • “Bank Reputation in the Private Debt Market,” with J. McCahery (2010), Journal of Corporate Finance 16 (4), pp. 498-515.

  • (Book chapter) “Venture Capital Exits” (2010), Chapter 18 of Venture Capital: Investment Strategies, Structures, and Policies (Robert W. Kolb Series in Finance): Wiley/Blackwell (Ed. D. Cumming).

  • “Corporate Relocation in Venture Capital Finance,” with D. Cumming and G. Fleming (2009), Entrepreneurship Theory and Practice 33 (5), pp. 1121-1155.

  • “Venture Capital Performance: The Disparity between Europe and the United States,” with U. Hege and F. Palomino (2009), Finance 30 (1), lead article, pp. 7-50.

  • “Style Drift in Private Equity,” with D. Cumming and G. Fleming (2009), Journal of Business Finance and Accounting 36 (5-6), pp. 645–678.

  • “The Political Origin of Pension Reform,” with E. Perotti (2008), Journal of Financial Intermediation 18, pp. 384-404.

  • “Innovation and Venture Capital Exits” (2008), Economic Journal 118 (533), pp. 1888-1916.

  • (Book chapter) “Reputation in the Private Loan Syndication Market,” with J. McCahery (2008), Chapter 13 of Rationality in Company Law: Essays in Honour of Dan Prentice: Hart Publishing (Ed. J. Armour and J. Payne), pp. 377-388.

  • “Financial Intermediaries, Ownership Structure and Monitored Finance: Evidence from Japan,” with D. Cumming and G. Fleming (2008), Small Business Economics 31 (1), pp. 59-92.

  • “Venture Capital Investment Practices in Europe and in the United States” (2008), Financial Markets and Portfolio Management 22 (3), pp. 195-217.

  • “IPOs, Trade Sales and Liquidations: Modelling Venture Capital Exits Using Survival Analysis,” with P. Giot (2007), Journal of Banking & Finance 31 (3), pp. 679-702.

  • “A Theoretical Analysis of Optimal Financing Strategies for Different Types of Capital-Constrained Entrepreneurs” (2007), Journal of Business Venturing 22 (6), pp. 753-781.

  • “International Capital Flows into Private Equity Funds” (2007), Maandblad voor Accountancy en Bedrijfseconomie 7/8, pp. 335-343.

  • (Book chapter) “The Structure of Venture Capital Funds,” with D. Cumming and G. Fleming (2007), Chapter 5 of Handbook of Research on Venture Capital: Edward Elgar, pp. 155-176.

  • “Legality and Venture Capital Exits,” with D. Cumming and G. Fleming (2006), Journal of Corporate Finance 12, pp. 214-245.

  • “The Strategic Use of Corporate Venture Financing for Securing Demand,” with Y.E. Riyanto (2006), Journal of Banking & Finance 30 (10), pp. 2809-2833.

  • “Liquidity Risk and Venture Capital Finance,” with D. Cumming and G. Fleming (2005), Financial Management 34 (4), pp. 77-105.