Comparing The Innovativeness Of Chinese And French Equity Crowdfunding

This paper investigates how innovation-related factors will affect ventures' funding success on equity crowdfunding (ECF) platforms based on two representative cases in China and France.Based on Chinese equity crowdfunding platform JD Dongjia and its French peer WiSEED, the paper centers around the link between firm-level innovativeness and retail investors' enthusiasm towards the venture. The signaling framework constructed by Alher is adopted to measure various attributes of the unobservable venture quality, such as innovativeness. The basic idea is to consider the messages conveyed through campaign materials as signals of the company's quality. Previous literature on this subject indicates high innovativeness will contribute to startups' funding success on ECF platforms.Combining innovation indicator framework, signaling theory and the information disclosed on JD Dongjia, the paper tests the assumption under two different models. The models are borrowed from two similar studies of Alher and Hsu, and adjusted respectively to the research purpose and data availability of this study. The same hypothesis is then tested on the French ECF platform WiSEED for the purpose of comparison.Contrary to the belief of many, the regression results reveal no link between innovation and funding success on the Chinese ECF platform. The French ECF case, however, confirmed the findings of previous scholars:an innovative image proves to help French ventures achieve greater investment success on WiSEED.