Climate policy shocks and crowdfunding success of renewable technology campaigns

Abstract

This study uses Trump's withdrawal from the Paris Accord as an exogenous policy shock and investigates its impact on crowdfunding outcomes. We find that this major policy change negatively affects the funding success of renewable technology campaigns. Mechanism tests suggest that social trust and availability bias transmit the influence of climate policy shock on crowd backers' decisions. Further analyses indicate that Biden's consequential policy reversal recovers the investors' support towards renewable technology. Overall, the Trump administration's climate policy shock induces significant shifts in the consumption preferences of small investors and incurs negative externalities upon renewable technology in crowdfunding markets.