Entrepreneur Gender,Project Title Information,and Crowdfunding Performance

With the rapid growth of Internet finance,crowdfunding,with its low threshold,convenience,and openness,has received great support from both entrepreneurs and investors,and has gradually become an important bridge that connects start-ups and the capital market.Under the background of the continuous deepening of China’s financial system reform,the development of the crowdfunding market has important practical significance for building a multi-layer capital market structure,promoting the development of inclusive finance,stimulating innovation and entrepreneurship,and alleviating the financing difficulties faced by small,medium,and micro enterprises.However,as an emerging financial product,crowdfunding is still in its early stage and still has a certain distance from standardized development.According to the theory of gender stereotypes and availability heuristics,since the participants of crowdfunding are mostly inexperienced individual investors,when they invest in the crowdfunding market with serious information asymmetry,they are prone to be affected by the gender of entrepreneurs and the title of crowdfunding projects.As a result,they tend to form cognitive bias on the quality of crowdfunding projects and then make irrational investment decisions,which adversely affects the healthy development of crowdfunding markets.Although prior studies have found that both the gender of entrepreneurs and the title information of crowdfunding projects will affect the financing performance of crowdfunding,the specific influence mechanism has not been fully explored.At the same time,the impact of entrepreneur gender and project title information on crowdfunding investment performance has not been effectively answered either.Under the theory of gender stereotypes and availability heuristics,this article centers on the impact of cognitive bias on the performance of crowdfunding,and puts forward the following research questions.First,how does the gender of entrepreneurs and the project title affect the financing performance of crowdfunding?Second,how does the entrepreneur gender affect investors’ interpretation of project title information? Third,whether the entrepreneur’s gender and project title information will affect the investment performance of crowdfunding?Taking the crowdfunding market as the research object,this article fully explores the relationship between entrepreneur gender,project title information,and crowdfunding performance,with the help of theoretical models and empirical research.We first construct a mathematical model to explain the impact of entrepreneur gender and project title information on crowdfunding performance,which lays the analytical framework and foundation for the empirical research section.Second,based on the theory of gender stereotypes,this article uses data from three typical equity crowdfunding platforms to empirically analyze the impact of entrepreneur gender on the financing performance of crowdfunding.Third,using the theory of availability heuristics and the data from the crowdfunding platform named "Kaishiba",we study the impact of project title information on crowdfunding financing performance.Lastly,using the same data from "Kaishiba",we treat crowdfunding investment as a two-stage decision-making process,and analyze the impact of entrepreneur gender and project title information on the investment behavior at different stages as well as the investment performance of crowdfunding.The main conclusions of this article are as follows:(1)The relationship between entrepreneur gender and crowdfunding financing performance varies with the environment of the crowdfunding platform.On crowdfunding platforms with higher risk,female entrepreneurs who are considered more trustworthy can gain more financing advantages.However,on a well-developed crowdfunding platform with stronger risk control,male entrepreneurs who are considered more capable have stronger financing performance.(2)As far as the risky equity crowdfunding market is concerned,female entrepreneurs have more financing advantages,and the existence of lead investors and the stage of enterprise development will adjust the relationship between entrepreneur gender and the financing performance of crowdfunding.(3)Entrepreneurs can influence the attention of crowdfunding investors through project titles: Highlighting market information can attract more investment,and highlighting interactive information will reduce the attractiveness of crowdfunding projects.At the same time,the gender of entrepreneurs will affect potential investors’ interpretation of the project title information.(4)Crowdfunding investment is a multi-stage decision-making process,and entrepreneur gender and project title information play different roles in different stages of crowdfunding.For the less risky crowdfunding platform “Kaishiba”,in the project attention phase,it is only the market information in the title that will significantly affect the number of crowdfunding followers,rather than the interactive information and entrepreneur gender.However,in the final investment phase,the attractiveness of market information to potential investors will be further transformed into better crowdfunding financing performance,while the interactive information and female entrepreneurs will reduce the financing performance of crowdfunding.(5)The results of crowdfunding investment performance suggest that only the number of project followers can effectively predict the investment return and the dispute status of crowdfunding projects,and that the project title information and entrepreneur gender do not contain information reflecting project quality.First,in the crowdfunding market,entrepreneur gender and title information will influence individual investment behavior through “framing”and “empathy”.To be more specific,the impact of entrepreneur gender on individual investment behavior varies with different crowdfunding platforms,while the title information affects investment behavior in different ways.Compared with the existing literature,this article makes improvement in terms of research perspectives,theoretical models,and research scopes.(1)We enriched the perspective of crowdfunding research.Using the investment behavior of crowdfunding investors as an entry point and supported by the theory of gender stereotypes and availability heuristics in Cognitive Psychology and Behavioral Finance,this article analyzes the impact of the gender of entrepreneurs and project title information on crowdfunding performance,which has enriched the research on the factors affecting crowdfunding performance.(2)We improved the theoretical model of crowdfunding research.This paper innovatively incorporates entrepreneur gender and project title information into the analysis framework of bounded rational investors.By constructing mathematical models,it reveals the theoretical mechanism through which the content which is lack of information affects the performance of crowdfunding,and improves the theoretical framework of crowdfunding research.(3)We expanded the research scope of crowdfunding.This article innovatively divides the crowdfunding investment process into two stages,and analyzes in depth the impact of entrepreneur gender and project title information on crowdfunding investment behavior at different stages.On this basis,we further explore the influence of these two factors on the investment performance of crowdfunding.Our study enriches the research on the crowdfunding investment performance.Third,the information highlighted in the crowdfunding title can affect the investment behavior of individual investors.In the Internet world with overloaded information,entrepreneurs can attract the attention of crowdfunding investors through project titles.Two strategies commonly used by entrepreneurs are: highlighting market information in crowdfunding titles to satisfy investors’ external motivations,and highlighting interactive information in crowdfunding titles to cater to investors’ internal motivations.In this article,market information refers to the information that indicates the popularity of the product,and interactive information refers to the information that is used to shorten the psychological distance or increase identity through interaction.The empirical results show that highlighting market information in the project title can attract more investment,whilst highlighting interactive information reduces the appeal of crowdfunding projects.On this basis,this article also finds that crowdfunding investors’ interpretation of project title information is affected by the entrepreneur’s gender.Based on the above research,this article reaches the following four points of inspiration.(1)Regulatory authorities should strengthen system construction,improve relevant laws and regulations,and provide a better institutional environment for the healthy development of crowdfunding markets,so that an effective restriction on the authenticity of information disclosed by entrepreneurs can be formed,which will alleviate investors’ cognitive bias.(2)In the process of selecting crowdfunding projects,investors should be cautious of the information disclosed by entrepreneurs,make a comprehensive assessment of crowdfunding platforms and crowdfunding projects,fully understand their own risk tolerance,and control investment risks.(3)In order to gain success in financing,entrepreneurs should disclose relevant project information in a targeted manner based on their own project conditions and crowdfunding platform environment,in order to attract investors’ attention and improve corporate financing efficiency.(4)In order to improve the operating performance of the platform,the crowdfunding platform should strengthen the due diligence of crowdfunding projects,strictly control the quality of the online project,and ensure the authenticity of the information disclosed by the project.