Identification and Modeling of Crowdfunding Risk Indicators in FinTech-Based Businesses Based on the Combined Approach of Thematic Analysis and Partial Least Squares in SEM

Document Type : Original Article

Authors

1 PhD student of Financial Engineering, Department of Accounting and Management, Roudehen Branch, Islamic Azad University, Roudehen, Iran.

2 Professor, Department of Accounting and Finance, Islamic Azad University, Faculty of Science and Research, Iran. founder and head of the Bazarsaz Financial Engineering and Investment Research Center.(

3 Assistant Professor, Department of Accounting and Management, Roudehen Branch, Islamic Azad University, Roudehen, Iran.

10.30495/ijfma.2023.71837.1980

Abstract

The purpose of this research is to identify and model crowdfunding risk indicators in FinTech-based businesses based on the combined approach of thematic analysis and partial least squares in SEM. The research population consists of the professors and experts of the certified crowdfunding platforms of Iran, including Pars Funding, Karnekrad, Dungi, Hamafarin, Phoenix, and IBkrad. In the qualitative part, the opinions of 12 experts were used using the purposive judgment method. In the statistical part and based on the power analysis method, the opinions of 290 experts related to the research topic were used in the mentioned platforms. The process of data analysis was carried out in two stages, which includes identifying the risk of crowdfunding in FinTech-based businesses through interviews and using theme analysis method and relations evaluation, fitting, testing the research model, and achieving the final model through questionnaire and modeling tools of structural equations. The research results showed that the risk of crowdfunding in FinTech-based businesses is divided into two main parts. The risk of internal factors, including lack of quick liquidity, conflict of interests between entrepreneurs and investors, high failure rate, equity dilution, lack of control over all aspects of investment, lack of transparency, limited information, possibility of fraud and corruption, risk of contracts and transactions, improper valuation, operational risk, and the risk of external factors, including market risk, macroeconomic risk, and lack of coordination in regulations.

Keywords

References

  1. Irvani, Hamidreza, Roodpashti Rahnema, Fereydoon; Yazdanian, Narges; and Kordloi, Hamidreza. (2021). Risk modeling of financing structure according to probabilistic decision theory through ANP. Financial Engineering and Securities Management, 47(12), 368-389.
  2. Bazargan Harandi, Abbas; Hejazi, Elaheh; and Sarmad, Zohreh. (2018). Research methods in behavioral sciences. Agah
  1. Malamir, Zohreh. (2018). A comparative study of the strategies of domestic and foreign crowdfunding platforms (Master's thesis). Semnan University
  2. Ahlers, Gerrit KC; Cumming, Douglas; Günther, Christina; & Schweizer, Denis. (2015a). Signaling in equity crowdfunding. Entrepreneurship theory and practice, 39(4), 955-980.
  3. Ahlers, Gerrit KC; Cumming, Douglas; Günther, Christina; & Schweizer, Denis. (2015b). Signaling in equity crowdfunding. Entrepreneurship theory and practice, 39(4), 955-980.
  4. Alaassar, Ahmad; Mention, Anne-Laure; & Aas, Tor Helge. (2021). Exploring a new incubation model for FinTechs: Regulatory sandboxes. Technovation, 102237. https://doi.org/10.1016/j.technovation.2021.102237
  5. Belleflamme, Paul; Lambert, Thomas; & Schwienbacher, Armin. (2014). Crowdfunding: Tapping the right crowd. Journal of business venturing, 29(5), 585-609.
  6. Braun, Virginia; & Clarke, Victoria. (2006). Using thematic analysis in psychology. Qualitative research in psychology, 3(2), 77-101.
  7. Chen, Jun; Chen, Long; Qian, Chen; & Xie, Kefan. (2018). Decision Making in Crowdfunding Under Risk Analysis. Hawaii International Conference on System Sciences 2018 (HICSS-51).
  8. Chen, Ying-Ju; Dai, Tinglong; Korpeoglu, C Gizem; Körpeoğlu, Ersin; Sahin, Ozge; Tang, Christopher S; & Xiao, Shihong. (2020). OM Forum—Innovative online platforms: Research opportunities. Manufacturing & Service Operations Management, 22(3), 430-445.
  9. Cohen, Jacob. (1992). A power primer. Psychological bulletin, 112(1), 155.
  10. Connelly, Brian L; Certo, S Trevis; Ireland, R Duane; & Reutzel, Christopher R. (2011). Signaling theory: A review and assessment. Journal of management, 37(1), 39-67.
  11. Damodaran, Aswath; & Roggi, Oliviero. (2016). Elementi di finanza aziendale e risk management. La gestione d’impresa tra valore e rischio. Maggioli Editore.
  12. Gai, Keke; Qiu, Meikang; & Sun, Xiaotong. (2018). A survey on FinTech. Journal of Network and Computer Applications, 103, 262-273.
  13. Hornuf, Lars; & Neuenkirch, Matthias. (2017). Pricing shares in equity crowdfunding. Small Business Economics, 48(4), 795-811.
  14. Jiang, Yang; Ho, Yi-Chun; Yan, Xiangbin; & Tan, Yong. (2020). When Online Lending Meets Real Estate: Examining Investment Decisions in Lending-Based Real Estate Crowdfunding. Information Systems Research, 31(3), 715-730.
  15. Kgoroeadira, Reabetswe; Burke, Andrew; & van Stel, André. (2019). Small business online loan crowdfunding: who gets funded and what determines the rate of interest? Small Business Economics, 52(1), 67-87.
  16. Kirby, Eleanor; & Worner, Shane. (2014). Crowd-funding: An infant industry growing fast. IOSCO Research Department, 1-62.
  17. Lee, P. (2015). The fintech entrepreneurs aiming to reinvent finance. Euromoney (UK), 46(552), 42-48.
  18. Marrone, Mauricio; & Hazelton, James. (2019). The disruptive and transformative potential of new technologies for accounting, accountants and accountability: A review of current literature and call for further research. Meditari Accountancy Research.
  19. Milian, Eduardo Z; Spinola, Mauro de M; & de Carvalho, Marly M. (2019). Fintechs: A literature review and research agenda. Electronic Commerce Research and Applications, 34, 100833.
  20. Nambisan, Satish; Lyytinen, Kalle; Majchrzak, Ann; & Song, Michael. (2017). Digital Innovation Management: Reinventing innovation management research in a digital world. MIS quarterly, 41(1).
  21. Piva, Evila; & Rossi-Lamastra, Cristina. (2018). Human capital signals and entrepreneurs’ success in equity crowdfunding. Small Business Economics, 51(3), 667-686.
  22. Ralcheva, Aleksandrina; & Roosenboom, Peter. (2019). Forecasting success in equity crowdfunding. Available at SSRN 3260140.
  23. Ralcheva, Aleksandrina; & Roosenboom, Peter. (2020). Forecasting success in equity crowdfunding. Small Business Economics, 55(1), 39-56.
  24. Secundo, Giustina; Rippa, Pierluigi; & Meoli, Michele. (2020). Digital transformation in entrepreneurship education centres: preliminary evidence from the Italian Contamination Labs network. International Journal of Entrepreneurial Behavior & Research.
  25. Shafi, Kourosh. (2021). Investors’ evaluation criteria in equity crowdfunding. Small Business Economics, 56(1), 3-37.
  26. Venslavienė, Santautė; Stankevičienė, Jelena; & Vaiciukevičiūtė, Agnė. (2021). Assessment of Successful Drivers of Crowdfunding Projects Based on Visual Analogue Scale Matrix for Criteria Weighting Method. Mathematics, 9(14), 1590. https://doi.org/10.3390/math9141590
  27. Vismara, Silvio. (2018). Information cascades among investors in equity crowdfunding. Entrepreneurship Theory and Practice, 42(3), 467-497.
  28. Vismara, Silvio. (2019). Sustainability in equity crowdfunding. Technological Forecasting and Social Change, 141, 98-106.
  29. Westland, J Christopher. (2010). Lower bounds on sample size in structural equation modeling. Electronic commerce research and applications, 9(6), 476-487.
  30. Xie, Kefan; Liu, Zimei; Chen, Long; Zhang, Weiyong; Liu, Sishi; & Chaudhry, Sohail S. (2019). Success factors and complex dynamics of crowdfunding: An empirical research on Taobao platform in China. Electronic Markets, 29(2), 187-199.

 

Files

Share

How to cite

Statistics