Intellectual capital, knowledge sharing and equity crowdfunding
| Published date | 13 July 2020 |
| DOI | https://doi.org/10.1108/JIC-11-2019-0258 |
| Pages | 95-121 |
| Date | 13 July 2020 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
| Author | Demetris Vrontis,Michael Christofi,Enrico Battisti,Elvira Anna Graziano |
Intellectual capital, knowledge
sharing and equity crowdfunding
Demetris Vrontis and Michael Christofi
University of Nicosia, Nicosia, Cyprus
Enrico Battisti
Department of Management, University of Turin, Turin, Italy, and
Elvira Anna Graziano
Link Campus University, Rome, Italy
Abstract
Purpose –This paper explores knowledge sharing (KS) and intellectual capital (IC) impacts on the success rate
of equity crowdfunding (EC) campaigns in the Italian market, which represents a new model for financing
entrepreneurial initiatives.
Design/methodology/approach –The relation between KS, IC and the success rate of EC campaigns is
analysed with a panel regression that measures IC through the value added intellectual coefficient. Social
network analysis is used to measure KS in the users’network on Twitter for EC campaigning. Specifically, the
authors consider the information users exchange on social networks as a proxy of KS and identify the hubs
influencing information dissemination, the size and strength of networks for each EC campaign. Finally, the
success rate of EC campaigns is a ratio of the number of positive campaigns to the total number of campaigns
for each platform.
Findings–The success rateof EC campaigns is positively relatedto IC and significantly and positively related
to the number of connections the EC platforms have.
Practical implications –The positive relationship between the hub role of social network platforms and the
success of EC campaigns provides an important signal to crowdfunding operators. As more potential investors
focus on an EC campaign, a bandwagon effect could involve uninformed investors. This result is crucial in
order to better understand how social media activity affects crowdfunding success.
Originality/value –Although the literature has examined the impact of KS on general firm performance and
the mediating role of intellectual capital, no prior studies have examined the impacts of KS and IC on the
success rate of EC campaigns in a specific market.
Keywords Intellectual capital, VAIC™model, Equity crowdfunding, Knowledge sharing, Social media,
Entrepreneurial initiative
Paper type Research paper
1. Introduction
Knowledge sharing (KS) represents a critical factor for an organization’s success
(Davenport and Prusak, 1998;Leonidou et al., 2018) because resources, capabilities and
other intangible assets help a company to achieve a sustainable competitive advantage
(e.g. Christofi et al., 2019a,b;Christofi et al.,2014;Battisti et al., 2019;Damilano et al.,
2019;Guatri, 1991). In this context, intellectual capital (IC) plays an extremely valued
role because the value creation process depends heavily on intangible resources and on
their appropriate use (Hartono and Sheng, 2016). Following the advent of the Internet,
the use of social networks facilitates information dissemination and also permits
knowledge sharing (Haas and Hansen, 2007;Del Giudice et al., 2014;Della Peruta et al.,
2014;Vrontis and Christofi, 2019). In this scenario, entrepreneurial culture reflects the
deep social and organizational changes (Del Giudice and Straub, 2011)thatimpactalso
on the ability for entrepreneurs to obtain capital. In particular, recent changes in
technology and regulation have reduced barriers for diffusion and adoption of
innovations (Bruton et al., 2015). Such changes have encouraged the development of
new financial instruments for supporting entrepreneurship and have also changed the
Intellectual capital,
knowledge
sharing and equity
crowdfunding
95
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 12 November 2019
Revised 25 February 2020
4 April 2020
Accepted 13 May 2020
Journal of Intellectual Capital
Vol. 22 No. 1, 2021
pp. 95-121
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-11-2019-0258
traditional way of raising money. The attention to new entrepreneurship initiatives has
thus intensified over the last decade, reflecting changes in financial markets after the
global financial crisis that has significantly reduced bank borrowing and venture
capital investment (Piva and Rossi-Lamastra, 2018), and consequently new financing
alternatives, such as crowdfunding (Belleflamme et al.,2013) and microfinance (Khavul,
2010), have rapidly expanded.
Using the Internet, innovators have designed new financial instruments to provide
entrepreneurs new ways to start and grow ventures, thus encouraging the development of
new entrepreneurial initiatives. Specifically, internet-based platforms act as intermediaries or
network orchestrators, connecting entrepreneurs with possible funders. In this context,
crowdfunding has emerged as an innovative method for financing new ventures (Herv
e and
Schwienbacher, 2018) through the use of the Internet, without contribution from usual
financial intermediaries, and by allowing individual founders of for-profit, social or cultural
projects to request funding from multiple people (e.g. Mollick, 2014;Agrawal et al., 2015;
Younkin and Kashkooli, 2016;Hagen et al., 2019;Miglietta et al., 2019). In particular, to attract
the attention of uncommon professional investors, entrepreneurs must find a plausible signal
for making the intrinsic quality of their business (Barbi and Mattioli, 2019). Human capital,
one of the three main forms of IC, is one of the most important aspects which investors
consider before funding a firm.
Nowadays, equity crowdfunding (EC), a widespread model of crowdfunding in which
funders receive interest in the form of equity or equity-like arrangements in the ventures they
fund (Bradford, 2012), plays a significant role in entrepreneurial finance (Cumming et al.,
2019). In recent years, different studies have focused on specific aspects connected to this type
of financing source. Current EC researches have principally examined the factors related to
funding success (e.g. Block et al., 2018) and funding dynamics (e.g. Hornuf and
Schwienbacher, 2018a) on EC platforms, frequently analyzing a single platform (e.g.
Lukkarinen et al., 2016;Mohammadi and Shafi, 2018;Vismara, 2018) and rarely multi-
platforms (Hornuf and Schwienbacher, 2018b;Dezi et al., 2018). However, with regards to the
general topic of intellectual capital, the literature on EC is still scarce, and some researchers
analysed the topic with reference specifically to human capital (Piva and Rossi-Lamastra,
2018;Barbi and Mattioli, 2019). In particular, Barbi and Mattioli (2019) highlight that human
capital represents a credible signal of a venture’s quality in EC. However, for a financial
collection tool whose success depends on the crowd’s response in terms of subscription, the
dissemination of news related to it on social networks is also fundamental. However,
managing knowledge in a crowd-based context is difficult because there is a new mode of
relational exchange between different stakeholders (e.g. creators, funders and platforms)
(Leone and Schiavone, 2018).
To the authors’knowledge, although the literature has examined the impact of KS on a
firm’s general performance and the mediating role of IC, no prior studies have examined KS
and IC impacts on the success rate of campaigns of EC in Italy. Based on these considerations,
the main aim of this study is to fill that gap. Specifically, based on the assumption that
knowledge sharing can be considered in terms of information exchange on social networks
and the intellectual capital can be measured by the value added intellectual coefficient (VAIC),
this paper aims to answer the following research question: Might knowledge sharing and
intellectual capital of the platforms responsible for the launch of an equity crowdfunding
campaign affect the probability of a project’s success and, consequently, impact on new venture
creation? To achieve the research purpose, this paper investigates the relation between KS, IC
and the success rate of EC campaigns with a panel regression that measures IC through
VAIC. In particular, social network analysis is used to measure KS in the users’network on
Twitter for EC campaigning and the success rate of EC campaigns is calculated as a ratio of
the number of positive campaigns to the total number of campaigns for each platform.
JIC
22,1
96
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