Signaling Value through Gender Diversity: Evidence from Initial Coin Offerings

We analyze women’s participation and the effects of team gender diversity on initial coin offering (ICO) success measured by the total funding amount raised in the actual ICO and the project’s long-term survival. Using a database featuring 875 initial coin offerings between 2017 and 2019, we find th...

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Bibliographic Details
Published in:Sustainability 2021-01, Vol.13 (2), p.700
Main Authors: Guzmán, Alexander, Pinto-Gutiérrez, Cristian, Trujillo, María-Andrea
Format: Article
Language:English
Subjects:
Blockchain
Digital currencies
Entrepreneurial finance
Fraud
Funding
Gender
Initial public offerings
Innovations
Institutional investments
Leadership
Participation
Social responsibility
STEM education
STEM professions
Success
Sustainability
Sustainable development
Teams
Venture capital
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Summary:We analyze women’s participation and the effects of team gender diversity on initial coin offering (ICO) success measured by the total funding amount raised in the actual ICO and the project’s long-term survival. Using a database featuring 875 initial coin offerings between 2017 and 2019, we find that women are significantly under-represented in ICO projects (on average, only 13% of team members are women). However, for projects that do have participation of women, we find that team gender diversity increases the total funding raised in the ICO. Moreover, when we separate team members into areas of expertise or roles in the project, we find that the presence of women in critical positions, such as being a founder or having financial or legal responsibilities, significantly reduces the likelihood of long-term coin failure. Our results are consistent with the notion that investors perceive women’s participation in leadership positions as a positive signal of desirable organizational practices that will translate into better performance. Our results are also consistent with the idea that having women, who abide by ethical values and are less prone to fraud, reduces the likelihood that informationally opaque ICOs turn out to be scams.
ISSN:2071-1050
2071-1050
DOI:10.3390/su13020700