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Disruptive potential of real estate crowdfunding in the real estate project finance industry

Disruptive potential of real estate crowdfunding in the real estate project finance industry The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real estate finance industry, assessing whether RECF constitutes a potentially disruptive innovation to the real estate finance industry. Based on a review and synthesis of the literature, the paper advances an initial conceptual framework of core characteristics of disruptive innovations. This framework is used to examine the disruptive potential of RECF in the real estate finance industry.Design/methodology/approachThis paper is a systematic literature review that synthesizes and analyzes relevant extant research articles retrieved from online databases.FindingsFindings suggest that according to the theory of disruptive innovations, and the core characteristics of disruptive innovations, RECF is a potentially disruptive innovation to the real estate finance industry. RECF seems to generally align with the classic characteristics of disruptive innovations. A more comprehensive and systematic analysis, supported by empirical data, is necessary to evaluate whether and to what extent RECF constitutes a disruptive innovation to the real estate finance industry.Research limitations/implicationsThis study has only captured and reviewed articles published and available in database searches. RECF is a nascent field that has recently begun receiving academic attention.Practical implicationsReal estate plays an integral part in the economy, and the way it is financed has become an increasingly important issue following the Global Financial Crisis. This paper provides useful insights for assessing whether and to what extent RECF may be disruptive to the real estate finance industry.Social implicationsRECF may potentially improve accessibility and affordability of real estate finance, thereby helping to address the problem of shortage of real estate project finance.Originality/valueWhile RECF is portrayed in the academic and gray literature as a disruptive innovation, its disruptive potential is yet to be determined. This paper advances an initial conceptual framework of defining characteristics of disruptive innovations. This framework is used to evaluate RECF as a potentially disruptive innovation in the real estate project finance industry. This study forms a basis for future empirical examination of the disruptive potential of RECF in the real estate finance industry. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Property Management Emerald Publishing

Disruptive potential of real estate crowdfunding in the real estate project finance industry

Property Management , Volume 36 (5): 23 – Sep 28, 2018

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0263-7472
DOI
10.1108/pm-04-2018-0032
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real estate finance industry, assessing whether RECF constitutes a potentially disruptive innovation to the real estate finance industry. Based on a review and synthesis of the literature, the paper advances an initial conceptual framework of core characteristics of disruptive innovations. This framework is used to examine the disruptive potential of RECF in the real estate finance industry.Design/methodology/approachThis paper is a systematic literature review that synthesizes and analyzes relevant extant research articles retrieved from online databases.FindingsFindings suggest that according to the theory of disruptive innovations, and the core characteristics of disruptive innovations, RECF is a potentially disruptive innovation to the real estate finance industry. RECF seems to generally align with the classic characteristics of disruptive innovations. A more comprehensive and systematic analysis, supported by empirical data, is necessary to evaluate whether and to what extent RECF constitutes a disruptive innovation to the real estate finance industry.Research limitations/implicationsThis study has only captured and reviewed articles published and available in database searches. RECF is a nascent field that has recently begun receiving academic attention.Practical implicationsReal estate plays an integral part in the economy, and the way it is financed has become an increasingly important issue following the Global Financial Crisis. This paper provides useful insights for assessing whether and to what extent RECF may be disruptive to the real estate finance industry.Social implicationsRECF may potentially improve accessibility and affordability of real estate finance, thereby helping to address the problem of shortage of real estate project finance.Originality/valueWhile RECF is portrayed in the academic and gray literature as a disruptive innovation, its disruptive potential is yet to be determined. This paper advances an initial conceptual framework of defining characteristics of disruptive innovations. This framework is used to evaluate RECF as a potentially disruptive innovation in the real estate project finance industry. This study forms a basis for future empirical examination of the disruptive potential of RECF in the real estate finance industry.

Journal

Property ManagementEmerald Publishing

Published: Sep 28, 2018

Keywords: Disruptive technology; Disruptive innovations; Disruptive Innovation Theory; Property crowdfunding; Real estate crowdfunding; Disruptions

References