An Analysis Of The Identification Ability Of Chinese Investors In Equity Crowdfunding

The development of equity crowdfunding and the exploration of registration system are important measures to improve the capital market in China.However there is little research on exploring the investor foundation of information disclosure system from a micro-data perspective.Using transaction data from an equity crowdfunding-the Renren Crowdfunding,this paper explores the Chinese investors' ability to identify the quality of equity crowdfunding projects.The empirical results show that: At present,Chinese investors still do not have the ability to identify the quality of the projects effectively.In other words,the investment is blindness.Furthermore,this paper finds that the information disclosed on the equity crowdfunding platform do foresee project's quality to some extent.But investors can't identify the quality signal of effective information,which reflects the immaturity of investors further.Based on the operation status and related research of Chinese equity crowdfunding,we consider that there are two main reasons why identification ability of investors is weak: the irrational investors first and asymmetric information second.On this basis,this paper provides some suggestions on improving Chinese equity crowdfunding,standardizing investor behavior and registration system reform.In the first chapter of this paper,we mainly review the relevant literature and find that the previous studies of the equity crowdfunding investors mainly focus on investment motives and investment risk.In the second chapter,we introduce the current characteristics of financiers and investors in Chinese equity crowdfunding.The third chapter is an empirical analysis.Using the transaction data of the Renren Crowdfunding,we explore the question with multivariate linear regression model.In the fourth chapter,we analyze the reason why investors cannot identify the quality of the project effectively.In the fifth chapter,based on conclusions,we put forward some suggestions to improve Chinese equity crowdfunding and the registration system reform.