Abstract

The development of real estate crowdfunding in the past few years is attributed mostly to the passage of the JOBS Act. Although the SEC set disclosure requirements for crowdfunding, we notice there are still different levels of disclosure among platforms. In this thesis, we examine whether the different disclosure policies set by platforms affect projects’ proposed return and sponsors’ behavior. Due to the two-way causality relationship between disclosure requirements and proposed return, we use the simultaneous regression model to estimate. The empirical results show sponsors who launch projects on a platform with lower disclosure standard raise projects proposed returns as an attractive means. Sponsors who were supposed to prefer a less stringent regulation are surprisingly willing to disclose more information. This study is the first information asymmetry study on debt-based crowdfunding and provide implications for practice.