The 3^rd Frontier Forum for Digital Technology and Finance

Abstract:

We measure how fear towards immigration in public discourse lowers the likelihood of minority creators achieving funding success on the crowd-funding platform Kickstarter. During the 2009-2019 period, the Migration Fear Index in the United States fluctuated by more than four standard deviations, especially during the campaign and early administration of President Trump. A one standard deviation increases in the Migration Fear Index connected to a 2.1% lower success rate for minority creators to reach their funding goals, compared to a baseline average of 50.1%. Expressed in another way, the “penalty” for being a minority in fund raising doubled or tripled during periods of high migration fear compared to low levels. The lower rates of minority success when fear spikes are documented at the quarterly level, mostly concentrated among Black and Hispanic creators during the 2009-2019 period, and are not explained by project/creator characteristics nor alternative macro factors like overall policy uncertainty. Sample decomposition exercises document a very broad-based retraction in support that spans local vs. dispersed campaigns, friends and family backing, political leanings of counties, and similar. In a recent case example, we also show similar shortfalls of funding success for Chinese ethnic creators during the pandemic and episodes of Asian Hate.

Speaker Introduction:

Dr. Bai is an associate professor of finance, Gary Gregg Research Fellow, and Joseph Riesman Research Professor at D’Amore-Mckim School of Business at Northeastern University. His research focuses on the interaction between firms, the capital market, and the labor market. His work has been published in top finance and management journals. His recent work focuses on ESG, Fintech, and risk factor disclosure.