Does Venture Capital Backing Improve Disclosure Controls and Procedures? Evidence from Management's Post-IPO Disclosures.

Firm managers make ethical decisions regarding the form and quality of disclosure. Disclosure can have long-term implications for performance, earnings manipulation, and even fraud. We investigate the impact of venture capital (VC) backing on the quality and informativeness of disclosure controls and procedures for newly public companies. We find that these controls and procedures are stronger, as evidenced by fewer material weaknesses in internal control under Section 302 of the Sarbanes-Oxley Act, when companies are VC-backed. Moreover, these disclosures are informative and are more likely to be followed by subsequent financial statement restatements than are disclosures made by non-VC-backed IPO companies.

Disentangling Crowdfunding from Fraudfunding.

Fraud in the reward-based crowdfunding market has been of concern to regulators, but it is arguably of greater importance to the nascent industry itself. Despite its significance for entrepreneurial finance, our knowledge of the occurrence, determinants, and consequences of fraud in this market, as well as the implications for the business ethics literature, remain limited. In this study, we conduct an exhaustive search of all media reports on Kickstarter campaign fraud allegations from 2010 through 2015. We then follow up until 2018 to assess the ultimate outcome of each allegedly fraudulent campaign. First, we construct a sample of 193 fraud cases, and categorize them into detected vs. suspected fraud, based on a set of well-defined criteria. Next, using multiple matched samples of non-fraudulent campaigns, we determine which features are associated with a higher probability of fraudulent behavior. Second, we document the short-term negative consequences of possible breaches of trust in the market, using a sample of more than 270,000 crowdfunding campaigns from 2010 through 2018 on Kickstarter. Our results show that crowdfunding projects launched around the public announcement of a late and significant misconduct detection (resulting in suspension) tend to have a lower probability of success, raise less funds, and attract fewer backers. Supplementary Information: The online version contains supplementary material available at 10.1007/s10551-021-04942-w.

E-Commerce Policy and International Business.

The rise of digitization and information and communication technologies (ICT) is playing a vital role in facilitating global trade and business activities and in overcoming cross-border transaction costs. In so doing, it offers firms significant benefits and opportunities to compete on a global scale, as witnessed during the ongoing COVID-19 pandemic. The growth and widespread diffusion of internet-enabled technologies and platforms have created numerous opportunities for firms to provide products and services across both developed and developing markets. Yet, limited research has been conducted in the international business domain to explore the rise of ecommerce and its implications for international business scholarship. In this focused issue, we present an examination of the role played by e-commerce in international business, paying particular attention to the policy aspect of e-commerce and issuing a call for a greater integration of e-commerce policy in international business research.

Mapping the venture capital and private equity research: a bibliometric review and future research agenda.

The fields of venture capital and private equity are rooted in financing research on capital budgeting and initial public offering (IPO). Both fields have grown considerably in recent times with a heterogenous set of themes being explored. This review presents an analysis of research in both fields. Using a large corpus from the Web of Science, this study used bibliometric analysis to present a comprehensive encapsulation of the fields' geographical focus, methodological choices, prominent themes, and future research directions. Noteworthily, the foundational themes in venture capital research are venture capital adoption and financing processes, venture capital roles in business, venture capital governance, venture capital syndication, and venture capital and creation of public organizations. In private equity research, style drift into venture capital emerges as a key theme alongside buyouts and privatization, and valuation and performance of private equity investment.

Financing is an important aspect of business that creates opportunities for investors and invested entities. Venture capital and private equity are two major vehicles of financing a business. While venture capital manifests as small investments that support the business operations of a large number of promising firms (more risky) in the early stage (startup), private equity transpires as large investments that support the business expansion of a small number of stable firms (less risky) in the later stage (scaleup). This study presents state-of-the-art insights into the current trends and future directions of venture capital and private equity using a bibliometric analysis of high-quality research on these forms of financing.

COVID-19 bust, policy response, and rebound: equity crowdfunding and P2P versus banks.

Traditional intermediaries have the ability and the incentive to intertemporarily smooth outcomes. Fintechs, such as peer-to-peer (P2P) lending platforms and equity crowdfunding (ECF) platforms, enable riskier projects without regard to intertemporal smoothing. U.S. data from May 2016 to June 2020 show that COVID-19 had an adverse impact on bank consumer lending. However, counter to our expectations, ECF and P2P are much more stable, timely, and resilient in the COVID-19 crisis compared to bank consumer lending. Moreover, the data indicate that P2P lending is a leading indicator for bank consumer lending and that bank consumer lending substitutes ECF. The policy response-CARES Act-caused: (1) a significant increase in ECF volumes, (2) a substantial rebound to bank consumer lending, and iii) at best, neutralized an already-stabilized level of P2P lending.