Is Blending Fintech With Traditional Finance a Top-Shelf Blend or a Sour Mix? Evidence From the Ownership of Equity Crowdfunding Platforms

Digital finance platforms are disrupting traditional financial entities (FEs). Yet, FEs increasingly invest in their ownership. We investigate whether FE ownership creates a “top-shelf blend” that enhances platform performance or a “sour mix” that undermines it. We integrate legitimacy theory and organizational identity theory to theorize an inverted U-shaped relationship between FE ownership and the performance of equity crowdfunding (ECF) platforms. A longitudinal analysis based on 306 ECF platforms demonstrates that FE ownership enhances performance up to a certain point, after which performance declines. The legitimacy of FEs owning ECF platforms moderates this relationship.