Fundraising, Governance and Environmental Ethics: Evidence from Equity Crowdfunding

Abstract There is an important research tradition concerning the financial implications of social and environmental ethics. This study investigates the short- and long-term financial performance of ventures with explicit environmental commitments seeking to raise funds in equity crowdfunding (ECF) markets. Our results indicate that environmental orientation positively influences short-term funding performance, though only when accompanied by the costly signal of robust corporate governance mechanisms. In the long run, environmental orientation also positively impacts performance, albeit with only weak statistical significance when observed alone. Governance again serves as a positive moderator, but its effect is less significant relative to the short term. However, environmental orientation does feature a strongly significant positive impact on long-run performance when combined with a successfully conducted initial ECF campaign.