Empirical Paper on Regulatory Sandboxes
Study
Topic
Alassar et al 2021
(Technovation)
Sandboxes as an
incubation model.
Cornelli et al 2020
(CEPR Discussion
paper)
Regulatory
Sandbox’s impact
on post-entry
fintech fund
raising.
Research
Question
How it is
different
compared with
BIs and
accelerators?
Data
Method
Finding
Secondary data,
archival
documents from
five sandbox
websites
Providing
regulatory
guidance,
facilitating testing
across jurisdictions,
offering Fin-Techs
flexibility.
How does
entering FCA’s RS
affect young and
innovative
fintech firms
raising funds?
FCA regulatory
sandbox data
from 2014 to
2019. Sandbox
firms vs nonsandbox firms;
Earlier entrants vs
later entrants of
the RS.
Firm-level
variables: age,
size, industry,
location, CEO
background.
Data sources: FCA,
PitchBook
Abductive,
qualitative analysis,
archival document
analysis, systematic
combining. Four
dimensions:
achieving
membersh4qip,
participating,
detaching, and
improving
connectedness.
Quantitative
analysis. CEM
matching for control
firms statistically
similar in firm
observables.
Significant increase
of 15% in capital
raised post-entry,
relative to firms
that did not enter.
Three channels:
marketing device,
high publicity
irrespective of
performance (not
validated); stamp
of approval, reduce
asymmetric
information,
signaling high
quality.
Reduce regulatory
uncertainty for the
RS firms.
Relevance to our
research
Background knowledge
for regulatory sandboxes.
BIs and incubators are
well-studied areas,
connecting sandboxes to
them provide
opportunities to combine
methods and compare
hypotheses among these
research streams.
This research used other
cohorts, firms that not
yet admitted as treated
group is a smart choice.
CEM matching is also
useful for your setting.
This research shows it
helps admitted firms to
get funding. We can
investigate how it affects
other firms in the same
industry, and also can
look into other DV that
deal size.
Regulatory cost is proxy
by CEO law degree,
information asymmetry is
proxy by distance and
young firms in this paper.