Jooyoung Park's long-term associate professor co-paper was published at Information Systems Research

Recently, Jooyoung Park, a long-term associate professor at Peking University HSBC Business School, co-authored a paper entitled "Risk Disclosure in Crowdfunding") was officially published in Information Systems Research (Volume 33, Issue 3, September).
2022，Pages iii-vii，765—1118，C2）
。 The paper co-authors are Keongtae Kim, Associate Professor of the University of Chinese Hong Kong, Yang Pan, Assistant Professor of Tulane University, Kunpeng Zhang, Assistant Professor of the University of Maryland, College Park, and Xiaoquan (Michael) Zhang
, Chair Professor of Chinese University of Hong Kong.

Magazine cover

Information Systems Research (ISR) is a journal of INFORMS that focuses on the theory and research
of information systems in organizational, institutional, economic and social contexts.
The journal is located in the two top journals of UTD 24 and FT 50, and enjoys a high academic reputation in the international management community, and is recognized as the top academic journal by business schools around the world, with an impact factor of 6.
239
in the past five years.

In traditional financial markets, listed companies are required to disclose potential risks
to investors in accordance with laws and fiduciary regulations.
However, in a reward-based crowdfunding environment, the relevant platforms are not subject to
such laws and regulations.
In September 2012, Kickstarter, one of the largest crowdfunding platforms, introduced a new rule requiring that every crowdfunding campaign page must include a section to disclose the risks and challenges and the plans
used to overcome them.
Does this behavior of increasing the risk prominence of crowdfunding projects affect the fundraising? If this behavior does affect the raising of funds, what is the mechanism of its impact? To address this important practical question, the authors examine whether and how new rules that explicitly describe the potential risks of crowdfunding projects affect investors
' investment decisions.

Using the changes in Kickstarter's new regulations as exogenous events, the authors extracted a sample of natural experiments from numerous project data since the regulations were introduced
.
Based on this, this paper uses the empirical strategy of difference and matching samples to compare and analyze the differences in investment decisions before and after the implementation of mandatory risk disclosure, and reveals their different impacts
on high-risk and low-risk projects.
In addition, the paper examines how the content and presentation of risk disclosures can mitigate the negative impact
on investors' investment intentions through text mining.
To confirm the results of observational data analysis, the paper conducted two experiments that directly tested the intention of commitment, analyzing the willingness of individuals to commit after reading the description of items with or without risk disclosure
.

The results show that the implementation of mandatory risk disclosure regulations will lead to a decrease in the amount of funds raised by crowdfunding projects, and this impact mainly exists in high-risk projects and has a weaker
impact on low-risk projects.
The experimental data further show that high-risk projects benefit from risk disclosure descriptions that include relevant objective information, real language, and balanced tone
.
When financiers of high-risk projects demonstrate more credibility (authenticity, balance, consistency, etc.
) in the risk disclosure, funders are more willing to invest in the project
.
In addition, in the long run, the negative impact of risk disclosure requirements on low-risk technology projects will diminish over time, but will continue for non-technical projects
.
The paper concludes by arguing that risk disclosure regulations can make crowdfunding markets more sustainable
by reducing information asymmetry to help crowdfunding investors make more informed decisions.

Jooyoung Park

Biography:

Jooyoung Park, Ph.
D.
in Marketing at the University of Iowa, Ph.
D.
in Marketing at the University of Iowa, his main research areas are marketing, consumer information processing, consumer motivation and self-regulation, embodied cognition, brand management, etc.
, and his research results have been published in Psychological Science, Journal of Consumer Psychology, Journal of Advertising, Journal of Travel Research, Internet Research, International Journal of Electronic Commerce and other journals
.