Determinants of amount raised in equity crowdfunding campaigns; an application of truncated regression

Moffatt, Peter G., Peters, Simon A. and Ma, Xuerui (2025) Determinants of amount raised in equity crowdfunding campaigns; an application of truncated regression. Bulletin of Economic Research. ISSN 0307-3378 (In Press)

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Abstract

Secondary-market data on 1,189 crowdfunding campaigns, extracted from the leading UK equity crowdfunding platform Seedrs, is used to identify the determinants of amount invested. A key feature of the data set is that only successful campaigns are observed. For this reason, we depart from previous literature by applying the truncated regression estimator (Hausman and Wise, 1977) instead of OLS regression. We cluster at the company level in order to allow for multiple campaigns per company. The importance of allowing for truncation is confirmed using the Hausman Test. Moreover, allowing for truncation alters the conclusions arising from previous literature concerning the effects of standard variables including target amount, amount of equity offered, and number of team members participating in the venture. Quadratic terms are introduced in order to identify "sweet spots". Textual dummies are included in order to identify words that enhance investor appeal. The Linktest misspecification testing procedure confirms the validity of our final model.

Item Type:	Article
Uncontrolled Keywords:	equity crowdfunding,truncated data,truncated regression,hausman test,link test
Faculty \ School:	Faculty of Social Sciences > School of Economics
UEA Research Groups:	Faculty of Medicine and Health Sciences > Research Centres > Norwich Institute for Healthy Aging Faculty of Science > Research Groups > Statistics Faculty of Social Sciences > Research Groups > Behavioural Economics Faculty of Social Sciences > Research Groups > Applied Econometrics And Finance Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Depositing User:	LivePure Connector
Date Deposited:	24 Oct 2025 13:31
Last Modified:	25 Oct 2025 00:08
URI:	https://ueaeprints.uea.ac.uk/id/eprint/100760
DOI:

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