Global exchange of goods and services and free capital movement-fueled by globalization and the rise of ICT-have enabled a variety of innovations, especially crowdfunding (Casadella & Tahi Tahi, 2017). Initially the domain of institutional investors and multinational firms, these capital flows now increasingly benefit individuals and SMEs. Crowdfunding represents a new financing channel for firms, particularly SMEs, either to fund working capital (Goyle, 2019), to finance acquisitions, or to expand production capacity. Regulatory frameworks have generally supported crowdfunding, aiming to foster access to liquidity while ensuring transparency and public reporting. Although "crowdfunding" literally means funding by a crowd, encompassing donations, loans, and equity contributions, it channels collective financial resources in ways that differ from traditional banking. Its economic functions are diverse-less economically driven than traditional bank-based finance-and echo historical forms of mutual and public finance that date back to antiquity.
Summary
Participatory financing enables economic agents to obtain liquidity outside traditional banking channels. Through tools like crowdfunding, funding tailored to investors’ needs enhances their chances of success. Crowdfunding also promotes disintermediation in money and stock markets, reducing friction and improving asset valuation efficiency. Empirical results validate these predictions and identify the conditions necessary for crowdfunding to innovate within financial markets.
Introduction
The growth of trade in goods and services, along with the free flow of capital thanks to globalization and new information and communication technologies (ICT), has fostered many innovations—particularly fundraising through crowdfunding (Casadella & Tahi Tahi, 2017). These global trends, independent of domestic policies, tend to encourage capital flows, at first to institutional investors and transnational firms, and more recently to individuals and small firms. Indeed, participatory financing represents a new funding opportunity for firms, especially SMEs, as emphasized by Goyle (2019): this tool presents real opportunities for entrepreneurs launching new projects, as well as existing SMEs needing liquidity to finance working capital (BFR), invest in fixed assets, or expand production capacity. According to Goyle, the regulatory environment has been rather supportive—providing oversight of crowdfunding activity without stifling it, while imposing transparency and public communication standards, in line with crowdfunding’s democratizing ethos.
However, the term “participatory” conceals a rather vague concept reflecting the varying meanings users attach to crowdfunding. Boyer, Chevalier, Léger & Sannajust (2016) define participatory financing technically—as the digital platform that mediates between liquidity providers and project initiators. They extend the definition to the transaction’s nature, stating: “There are three forms of crowdfunding: donation, loan, and equity, carried out by a large number of contributors called crowdfunders.” Thus, the economic roles of crowdfunding are diverse and less market‑centered than those of traditional banking. Moreover, these authors argue that crowdfunding itself is not inherently innovative—it had rudimentary forms even in antiquity, highlighting its mutualist and public-origin aspects. The Anglo‑Saxon etymology of “crowdfunding” stems from the concept of funding by a crowd.
Detailed Outline
I. Literature Review
Crowdfunding as alternative support for cultural projects
Crowdfunding as a transfer tool for diaspora to high‑migration countries
Crowdfunding, SMEs, and innovation
Success factors in crowdfunding campaigns
Literature synthesis
II. Global Liquidity Flows: Crowdfunding’s Contribution
Descriptive statistics on global crowdfunding volumes
Determinants of financial development: cross‑country analysis
III. Firm‑Level Success Factors: Crowdfunding Empirical Analysis
IV. Conclusions
Bibliography
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