Date: Tuesday, 12 December 2023, at 12:15 pm
Location: Seminar Room 237, DEM
Speaker and Title:
Lorenzo Leto (University of Pisa)
Dynamics of management control systems’ development in “small public” companies
Abstract:
This research explores the influence of equity crowdfunding on Management Control System (MCS) development in newly established companies. Through an interpretive approach, we assess potential contingent factors influencing MCS evolution. Contrasting with venture capital, where experienced investors actively demand MCS development, equity crowdfunding entails numerous individuals contributing small capital fractions, creating a unique dynamic for MCS adoption. Our analysis of 15 case studies reveals that equity crowdfunding shareholders significantly influence MCS development. Interestingly, conforming to signalling theory, founders communicate with shareholders, not just for transparency but also to gain specific benefits. Furthermore, the founders’ openness, calculative culture, and interactions with crowdfunding platforms stimulate MCS utilization and development. Our research illuminates the MCS development in early-stage, equity crowdfunded firms, also providing valuable insights for establishing effective shareholder communication strategies.
Discussant: Costanza Di Fabio (University of Genova)
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