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Win-win or Beggar-thy-Neighbor?——A Study on the Externality of Blockbuster Projects

【Authors】
FANG Xing
【WorkUnit】
Zhejiang University of Finance and Economics, 310018.
【Abstract】

The rapid development of crowdfunding in China has brought about a new financing channel for the startup enterprises. The financing characteristics of crowdfunding trigger the emergence of blockbuster projects which reach an extremely high funding ratio. Based on the theory of network externality, this paper uses the professional web crawler tools to capture data and screen out the blockbuster projects. We explore the spillover effects of blockbuster projects and study the externalities of its continuous effect. Empirical studies have found that blockbuster projects have positive externalities for other projects on the platform, which are prevalent in the projects of the same or different categories. The spillover effect is persistent and gradually diminishes with the passage of time. The herding effect of investors is the source of the externality of blockbuster projects, while the blockbuster projects attract potential investors and pass on externalities to other projects by completing the financing goals more quickly. Based on the conclusions, this paper puts forward policy recommendations from the perspective of crowdfunding platforms, project sponsors, investors and supervision authorities.

JEL:G23,L26,G32

【KeyWords】
Crowdfunding, Blockbuster Projects, Network Externality, Spillover Effect