External supports in reward-based crowdfunding campaigns: A comparative study focused on cultural and creative projects

Fundraiser engagement, third-party endorsement and crowdfunding performance: A configurational theory approach

Reward-based crowdfunding is a typical two-sided platform (fundraiser side and backer side) with high information asymmetry. While existing research indicates that signals from fundraisers and backers can impact crowdfunding performance, the interplay among these signals warrants further investigation. Drawing on signaling theory, this study adopts a configurational perspective and utilizes the fsQCA method and linear regression to investigate the combined effects of fundraiser engagement (update and fundraiser comment), third-party endorsement (backer comment and Facebook sharing), and project preparedness (video, image, and description) on crowdfunding performance. Drawing data from the reward-based crowdfunding platform Indiegogo, this research pointed out that these signals cannot generate better crowdfunding performance alone and examined substitution and complementary effects among different signals. Based on the linear regression and fsQCA results, configurations that lead to high crowdfunding performance are identified. We found that project preparedness must work with other signals to produce high crowdfunding performance. Besides, we summarized these configurations into two patterns that may lead to high crowdfunding performance: a fundraiser engagement-driven pattern and a third-party endorsement-driven pattern. This study contributes a configurational perspective and valuable insights into how signals can work together to mitigate information asymmetry in crowdfunding.

Signaling theory in charity-based crowdfunding: Investigating the effects of project creator characteristics and text linguistic style on fundraising performance

This research investigates the influence of project creator characteristics and text linguistic style on the effectiveness of fundraising campaigns within the realm of environmental crowdfunding. Drawing on a dataset encompassing 2641 campaigns conducted on the Tencent Gongyi platform spanning from April 2012 to December 2022, the study employs stratified regression analysis to discern the factors that contribute to variations in fundraising outcomes. In terms of hard information, the outcomes reveal that organization size, registration date, prior project initiation experience, and the organization's rating wield a noteworthy influence over the ultimate crowdfunding performance. Conversely, when considering soft information, the presence of negative emotional signals in crowdfunding texts was found to positively correlate with fundraising success. However, emotional intensity exhibited a negative impact on fundraising performance. These findings have substantial implications for practitioners engaged in environmental crowdfunding endeavors. When initiating a project, the creator should demonstrate his or her competence as much as possible to enhance credibility and in addition, should try to show negative signals in the text.

Networking the commons: creative commons project creators funding patterns in crowdfunding

Purpose

Guided by the collective action theory, signaling theory and social identity approach, this study examines backing behavior by individuals who have created projects under CC licenses. Two motivational mechanisms were examined: (1) identification via common interests in the CC space; (2) resource signaling by other users via their diverse project creation experience, funding or commenting activity.

Design/methodology/approach

Data were collected from Kickstarter.com. Exponential random graph modeling was used to examine how the two reviewed mechanisms influence the tie formation probability between Creative Commons (CC) project creators and other creators. The analysis was conducted on two subnetworks: one with ties between CC creators; and one with ties from CC creators to non-CC creators.

Findings

The study found that CC creators exhibit distinct backing patterns when considering funding other CC creators compared to non-CC users. When considering funding their peer CC creators, CC identity can help them allocate and support perceived in-group members; when considering funding non-CC creators, shared common interests in competitive project categories potentially triggers a competition mindset and makes them hold back when they see potential rivals.

Originality/value

This study makes three contributions. First, it draws from multiple theoretical frameworks to investigate unique motivations when crowdfunders take on dual roles of creators and funders and offered implications on how to manage competition and collaboration simultaneously. Second, with network analysis our study not only identifies multiple motivators at work for collective action, but also demonstrates their differential effects in crowdfunding. Third, the integration of multiple theoretical frameworks allows opportunities for theory building.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/OIR-05-2020-0166.

Financing the cultural and creative industries through crowdfunding: the role of national cultural dimensions and policies

The trend towards digitalisation and technological innovation has reshaped the cultural and creative industries (CCIs) by changing the existing funding models and structures. The aim of this article is to explore the impact of cultural dimensions and policies on the adoption of reward-based crowdfunding as a new form of finance for firms in the CCIs in 12 different European countries during the 2015-2019 period. Our results show that national cultural dimensions and policies significantly affect the demand for cultural and creative crowdfunding. Specifically, the adoption of crowdfunding is broader in individualistic countries and in societies characterised by higher uncertainty avoidance, indulgence, short-term orientation, and lower levels of discrimination between genders. Furthermore, we find that the liberal welfare state model, characterised by limited government interference, market orientation, privatisation and a focus on self-responsibility, and the Southern European welfare model, based on a weak and inefficient state, increase the adoption of crowdfunding in the CCIs. The presence of a central ministry with cultural competence also increases the adoption of crowdfunding in the CCIs. Our findings show a U-shaped relationship between European grants and the demand for crowdfunding, mainly driven by a high or low European involvement within these sectors. We also identify a moderation effect of EU grants on the relationship between cultural dimensions and crowdfunding adoption, suggesting that the magnitude of this relationship depends on the amount of EU grants awarded in a specific country. As a robustness check, we run a set of Poisson regressions with correlated random effects (CREs), confirming our main results.

Developing an Islamic crowdfunding model: a new innovative mechanism to finance SMEs in the Middle East

Purpose

The purpose of this study is to investigate and discuss the viability of Islamic crowdfunding (ICF) as an alternative form of financing small and medium enterprises (SMEs) in the Middle Eastern and Islamic business environment. This study raised essential questions: what is the perception of ICF in the Middle East? Does the Middle East region really need an Islamic crowdfunding model to support SMEs? Is it possible to create a crowdfunding platform complaint with Sharia? What are the requirements for developing an Islamic crowdfunding model?

Design/methodology/approach

The methodology followed to answer these questions is a qualitative research design depends on in-depth interviews, literature review, historical analysis and critical discussion. Data analysis was conducted using NVivo to analyze 25 in-depth interviews with Islamic scholars, Sharia board members and Islamic finance experts from different Middle East countries such as Saudi Arabia, Kuwait, Egypt, Iraq, UAE and Bahrain. In addition, more than 115 transcriptions, memos and research articles were used.

Findings

The study provides a new Islamic Sharīʿah-compliant crowdfunding model as the main outcome of this study. In addition, the content analysis revealed four main themes to be the essential pillars to develop the ICF model. These provisions of Islamic Sharia are: Project Idea (Halal) (28.5%), Funding Goal (36%), Return and Risk (14%) and Funding Commitments (21.5%). The findings also revealed that the four types of crowdfunding (reward-based crowdfunding, donation-based crowdfunding, loan-based crowdfunding and equity-based crowdfunding) are legal and supported by evidence from Quran and Sunnah.

Originality/value

Despite the critical development in Islamic finance and the expanding number of young Muslims slanting digital Islamic services, empirical studies exploring this issue in the Middle East is still inadequate. Further, ICF has increased attention and there is an urgent need for financing new SMEs in the Middle East.

The Effect and Impact of Signals on Investing Decisions in Reward-Based Crowdfunding: A Comparative Study of China and the United Kingdom

When traditional financial institutions faced difficulties in the task of assisting micro, small and medium-sized enterprises (MSMEs) with capital allocations, crowdfunding can upsurge as an innovative and vibrant vehicle that can support and assist the activity of such MSME’s, by financing their activity and instrumenting the process of risk-sharing. Simultaneously with its enormous growth and popularity, crowdfunding is faced by several key challenges, one of biggest such challenges referring to the problem of information asymmetry that can exist between fundraisers and potential backers. Based on the signaling theory, a research taxonomy has been developed for a comparative analysis between China and the UK. This has been accomplished by retrieving secondary data from the following crowdfunding platforms: Dreamore (Chinese platform) and Crowdfunder (UK platform). The objective of the study is to investigate both the effect and the impact that signals (goal setting, project comments and updates) have upon mitigating the problem of information asymmetry, in order to make the project successful. We have thus deployed an Ordinary Least Square (OLS) regression and validated the models through a robustness check. The findings reveal that signals actively mitigate the problem of information asymmetry in both countries, but this varies in the sense that higher goal setting has a more positive/impactful relationship with project success in the UK than it does in China. Project comments are more positively associated with project success in China as compared to the UK, whereas project updates are more negatively related to project success in China as compared to the UK. These findings demonstrate the importance that signals have upon successful crowdfunding activities/campaigns, highlighting the theoretical and practical influence and relevance for potential fundraisers in the two aforementioned economies.

Filmmaking and Crowdfunding: A Right Match?

Broadly defined, culture is deemed the fourth pillar of sustainable development and increasing attention is currently being paid to how it can access all potential financial resources. In Europe, film production benefits from public financial support; however, film projects require large amounts of money to be completed and this support may prove insufficient in comparison with the actual need. This raises the question of identifying alternative financial resources that filmmakers could benefit from. Crowdfunding has recently emerged as a funding option for all the creative-cultural industries in general and for film production in particular. However, Romania’s capacity to use this alternative financial source is one of the lowest in Europe. In this context, the aim of the article is to study Romanian filmmakers’ attitudes towards crowdfunding and its perceived suitability for financing film projects. The research method consists in a survey based on self-administered questionnaires and semi-structured interviews with Romanian film producers. Although the largest majority of film producers have not used crowdfunding due to lack of awareness or scepticism, the paper discusses, based on experts’ opinion, how this method can become a viable source of finance for the film industry.