The influence of financial literacy and financial self-efficacy in equity crowdfunding investment decisions

The rapid growth of equity crowdfunding (EC) has widened investment opportunities for a diverse array of investors, yet research examining how their characteristics shape preferences for EC campaigns remains relatively limited. This paper seeks to investigate the impact of financial literacy and financial self-efficacy on the perception of attractiveness of EC campaigns while also considering gender dynamics. Through an experimental approach involving the presentation of 24 equity crowdfunding campaigns with real data to 185 participants and applying structural equation modeling to the data, we observed that financial self-efficacy mediates the negative impact of financial literacy on the perceived attractiveness of EC campaigns. Additionally, the study revealed women’s heightened propensity towards sustainability-oriented investments, which is further reinforced by their level of financial literacy. These findings underscore the significance of financial literacy and financial self-efficacy in shaping investment decisions within alternative markets and highlight the existence of gender differences. Findings contribute to bridging the gap in the literature by offering a comprehensive analysis of previously unexplored characteristics of EC investors, informing policy-makers, scholars, and practitioners.