Investor response to innovative technology : an analysis of traditional financial and crowdfunding markets

Abstract

This thesis delves into the effects of innovative technology, generative AI and firms' metaverse-related initiatives on financial markets. For the crowdfunding market, utilizing data from Kickstarter, the study focuses on how the integration of generative AI affects crowdfunding campaigns' success rates, funds raised, and number of backers. We further investigate the moderating effect of project type (IT versus non-IT). Our findings suggest that utilizing generative AI in crowdfunding projects may negatively impact project outcomes, because it introduces new risks related to the capabilities of AI that can erode backers' trust in the fundraiser's ability to deliver the promised quality and timely delivery, particularly for IT projects that inherently carry more technical risks. On the other hand, firms' metaverse-related announcements can lead to positive abnormal stock returns, particularly those associated with mergers and acquisitions. The study challenges the notion of the first-mover advantage in the metaverse industry showing that early adopters of metaverse service or products do not experience positive abnormal returns and suggests that metaverse-related patents may not contribute significantly to a firm's valuation. The research contributes to the literature on crowdfunding and IT investment and have managerial implications for entrepreneurs and firms seeking to leverage these new technologies to attract funds for their innovative projects.