
Initial Coin Offerings (ICOs)
The role of Social Media for Organizational Legitimacy and Underpricing
- 56 pages
- English
- PDF
- Available on iOS & Android
Initial Coin Offerings (ICOs)
The role of Social Media for Organizational Legitimacy and Underpricing
About this book
Recently, Initial Coin Offerings (ICOs) have developed substantial influence as a funding mechanism while being largely neglected by research. In parallel, microblogs were identified as a source of organizational legitimacy and underpricing in Initial Public Offerings. In this paper, we investigate the influence of different types of social media, specifically microblogs and discussion forums, on organizational legitimacy in the realm of ICOs. As legitimacy cannot be measured directly, we follow renowned scholars and use underpricing as the dependent variable and an established proxy for legitimacy. We analyze data of 95 ICOs and provide first results indicating that discussion forum activity confers organizational legitimacy. Additionally, we show that the influence of strategic twitter management by the legitimacy-accruing organization is mediated by the activity of independent users on discussion forums. Furthermore, we introduce the phenomenon ICO as a funding mechanism fundamentally based on information technology and motivate further research on this topic.
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