Exploring determinants in cross-border activity in equity crowdfunding and peer-to-peer lending, from a user’s perspective

ABSTRACT This paper explores differences between equity crowdfunding and peer-to-peer (p2p) lending determinants of cross-border activity, from a user’s perspective. We use a unique database of survey respondents, registered in equity crowdfunding and p2p lending platforms across Europe. We find clear differentiations between equity crowdfunding and p2p lending. Equity crowdfunders are driven mainly by excitement while p2p lenders are driven by higher returns. As regards cross-border activity, equity crowdfunders are almost 7 times more likely to invest in foreign projects. Both equity crowdfunders and p2p lenders try to achieve diversification via cross-border activity, following however different strategies. We conclude that these differences should be taken under consideration, while implementing the pan-European regulatory framework for crowdfunding with financial returns (ECSP).