Individual’s financial investment decision-making in reward-based crowdfunding: evidence from China

Abstract

This paper extends the work of Cecere et al. (Appl. Econ., 49(57): 5802-5813, 2017) and explores the antecedents of backers' decision to invest in projects from eight categories on a reward-based crowdfunding platform in China. We extract data from 2011 to 2016 from the pioneer Chinese reward-based crowdfunding site "Demohour". Our empirical investigation using Ordinary Least Squares (OLS) reveals that feedback score, social capital (followers on Weibo, project sharing on social media) and project quality (number of updates) are key motivating factors in investment decision and subsequently, project success or failure. Robustness tests also confirm the findings.

Research on the Effects of Information Description on Crowdfunding Success within a Sustainable Economy—The Perspective of Information Communication

“…Generally, there are three modes of presenting in project description including word, picture, and video. However, most previous studies only included one or two of them [12,17,[30][31][32]34,40,90]. This study has contained all variables of word, picture and video.…”

“…The antecedents of crowdfunding success can mainly be divided into three types. First, the creators-related factors are important influencers for crowdfunding success, including creators' experience and expertise [12][13][14], group size and composition [14][15][16], social capital [13,[17][18][19][20], and human capital [2,21]. Second, the projects' internal characteristics and related outcomes, such as the goal [16,22], duration [16,22,23], category [24][25][26][27], rewards [16,22,23,28], have also been verified as antecedents that may affect the crowdfunding success.…”

“…Finally, how the information of the projects is presented, namely the project's information description, has further been noted as an impactor that must be considered. In summary, previous studies have suggested three dimensions of information description, including information quantity (how many words [12,15,23,27,[29][30][31][32], pictures [23,27,31,32], and videos [23,27,29,31] are used to describe the project), information quality (to what extent the project information is readable, namely readability [12]), and the frequency of information update, namely updates [1,17,31,32] and information attitude (the backers' opinions or questions about the projects and the creators' replies are all reflected in the comments [15,29,31]. According to the prior literatures (as shown in Table A1), we can conclude that the effect of creators' related factors and the internal characteristics of projects on crowdfunding success have been fully verified.…”

Crowdfunding in China: Turmoil of Global Leadership

“…Based on the data collected from the key players of Chinese crowdfunding market (e.g. JD Crowdfunding; Demohour; Zhongchou), Chinese crowdfunding literature reveals that social capital (Shahab et al 2019;Kang et al 2017;Chen et al 2018), trust and commitment (Zheng et al 2016;Liang et al 2019), campaign characteristics (Du and Wang 2016;Du et al 2019;Zhao and Vinig 2017), campaign quality (Xu et al 2016;Yuan et al 2016;Shahab et al 2019;Chen et al 2018;Zhang et al 2017;Bi et al 2017), as well as backer and initiator interaction (Wang et al 2018;Xie et al 2019) are positively associated with crowdfunding success in China.…”

Reward-based crowdfunding on the Polish market

“…Other researchers tried to find a connection between the success of a project and the early donations made shortly after the announcement of a given project (Colombo, Franzoni, and Rossi-Lamastra, 2015). The Chinese reward-based crowdfunding market was presented by Shahab et al (2019). The types of individuals who support crowdfunding activity were analyzed by Ryu and Kim (2016).…”