Analysis of Success Factors of Reward-Based Crowdfunding Campaigns Using Multi-Theory Approach in ASEAN-5 Countries

Abstract

This study aims to determine the multi-sided factors of crowdfunding campaigns on the fundraising success of crowdfunding projects conducted in ASEAN-5 (five big countries in The Association of Southeast Asian Nations) countries between 2014 and January 2019 through a multi-theory approach. Using secondary and cross-section data from Kickstarter, this research uses the probit regression method to analyze the data and test the hypotheses. First, in line with the goal setting theory, small-sized projects are more likely to be funded. Second, the large teams are preferable by the potential backers, in line with the resource-based view of firms. Further, the self-determination theory shows that rewards are one of the big extrinsic motivations for the backers in ASEAN. Moreover, our paper also shows the remarkable result with the funding target which has negative influence to probability success of crowdfunding. This is because our project samples are used from the ASEAN countries whose owner or investor is more concerned to be risk averse than a risk taker. These results provide insight and bring a contribution to the crowdfunding literatures in ASEAN.

Psychological Determinants of Investor Motivation in Social Media-Based Crowdfunding Projects: A Systematic Review

“…The types of crowdfunding (Block et al, 2018 ; Dai and Zhan, 2019 ; Dikaputra et al, 2019 ; Dospinescu et al, 2019 ; Jaziri and Miralam, 2019 ; European Commission, 2020 ) are:…”

“…Another aspect noticed by the researchers refers to the economic profitability of the project as a factor of extrinsic motivation reported to intrinsic motivation. Although rewards are an important incentive (Dikaputra et al, 2019 ), there is a wide variety of intrinsic incentives that determine individuals to get financially involved in supporting a project, such as peace of mind, altruism, reciprocity or benefits for the community via implementation of the projects (Yang et al, 2016 ; Necula and Strîmbei, 2019 ). Kuppuswamy and Bayus ( 2017 ) highlight the importance of prosocial behavior in the case of reward-based crowdfunding: the supporters of the projects wish to make a profit, while also contributing in turning an entrepreneur's idea into reality.…”

“…The success of a crowdfunding project/campaign can be reflected in the performance of targeted fundraising. When the amount of funds collected via a crowdfunding project/campaign exceeds the target amount, then the crowdfunding project can be deemed successful (Dikaputra et al, 2019 ).…”

“…A study conducted by Moradi and Dass ( 2019 ) shows that crowdfunding campaign creators should use negative framing, such as using counterfactual language to highlight the costs associated with the lack of contribution in the description of their project, as this type of framing has a positive impact on the level of financing. Other similar elements with a positive effect on the favorable decision of investors are brief text updates, the presence of a link to a website where the project is presented, the presence of comments (Dikaputra et al, 2019 ).…”

“…Crowdfunding mechanisms are legally recognized by the governments of more and more countries, which leads to their rapid development and increase in popularity worldwide, beyond the traditional western space. The development is rapid or promising in countries such as China (Wang and Xue, 2019 ) or ASEAN-5 (Indonesia, Malaysia, Singapore, Philippines, and Thailand) (Dikaputra et al, 2019 ), Eastern-European countries such as Poland and Romania (Fanea-Ivanovici and Siemionek-Ruskan, 2019 ), but still hesitant in African countries (Jaziri and Miralam, 2019 ).…”