External supports in reward-based crowdfunding campaigns. A comparative study focused on cultural and creative projects
| Published date | 11 September 2017 |
| Pages | 626-642 |
| DOI | https://doi.org/10.1108/OIR-10-2016-0292 |
| Date | 11 September 2017 |
| Author | Zheshi Bao,Taozhen Huang |
| Subject Matter | Library & information science,Information behaviour & retrieval,Collection building & management,Bibliometrics,Databases,Information & knowledge management,Information & communications technology,Internet,Records management & preservation,Document management |
External supports in reward-based
crowdfunding campaigns
A comparative study focused on cultural
and creative projects
Zheshi Bao
Business School, Hohai University, Nanjing, China, and
Taozhen Huang
School of Public Administration, Hohai University, Nanjing, China
Abstract
Purpose –The purpose of this paper is to discuss some drivers which can promote reward-based
crowdfunding campaigns and then compare their effects on two categories of cultural and creative projects.
Design/methodology/approach –The authors first distinguished the roles of “intrinsic qualities”and
“external supports”in crowdfunding campaigns. Then based on the theories of reward-based crowdfunding,
impression management and social capital, a research model was built to discuss the effects of external
supports and a comparative study was conducted by using data collected from Kickstarter.com.
Findings –It indicates that the thr ee dimensions of externa l supports (reward supp ort, impression
support, and relation ship support) have positive effec ts on film and video and publishing proj ects. Besides,
the authors also found t hat “category of a project ”can moderate the relati onship between impress ion
support and crowdfund ing performance. The effect of imp ression support on visual works i sd ifferent from
that on printed works.
Research limitations/implications –These findings not only pr ove that external supports actua lly play
an important role in crowd funding campaigns, but also reveal that for dif ferent categories of cultural and
creative crowdfundin g projects, the effects of e xternal supports are diff erent. Some other theoret ical
and practical implica tions are also provided.
Originality/value –This research reveals some details about the important role of external supports in
crowdfunding campaigns and compares their effects on different categories of cultural and creative projects.
It can provide useful suggestions for improving reward-based crowdfunding performance.
Keywords Social capital, Impression management, Comparative study, Reward-based crowdfunding,
Cultural and creative projects, External supports
Paper type Research paper
1. Introduction
The internet and information technology have provided firms and individuals innovative
approaches to obtain financial resources. They empower entrepreneurs who do not
have traditional monetary resources to raise funding from a large number of people
without limitations of time and space (Ryu and Kim, 2016; Zheng et al., 2014).
Crowdfunding can be considered as one of the prominent approaches. Generally, the basic
definition of crowdfunding is collecting money from large groups of people to create
projects, and each individual provides a very small amount (Belleflamme et al., 2014).
Although there exist different types of crowdfunding (e.g. equity-, reward-, and
lending-based), reward-based crowdfunding has the largest number of online platforms
and has grown faster in recent years. This type of crowdfunding has become a popular
crowdfunding practice, especially for some projects whose initial capital requirement is
relatively small (Belleflamme et al., 2014). Many small-to-medium-sized enterprises (SMEs)
Online Information Review
Vol. 41 No. 5, 2017
pp. 626-642
© Emerald PublishingLimited
1468-4527
DOI 10.1108/OIR-10-2016-0292
Received 22 October 2016
Revised 21 February 2017
Accepted 16 March 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1468-4527.htm
This work was supported by the Fundamental Research Funds for the Central Universities
(2016B46814) and the Postgraduate Research and Practice Innovation Program of Jiangsu Province
(KYLX16_0692).
626
OIR
41,5
and individual creators have employed this method to raise fund successfully.
Therefore, in this study, we focused on reward-based crowdfunding and discussed
some factors which can contribute to it.
Now most reward-based crowdfunding platforms employ the “all-or-nothing”rule to
operate projects. Entrepreneurs set a minimum target funding and time limit for a project.
If the amount of capital collected is equal to or exceed the target before the deadline, this
crowdfunding project can be considered as “successful,”and entrepreneurs can acquire all
collected capital, otherwise, the project is failed, and all collected capital will return to
backers. Under this rule, how to make reward-based crowdfunding projects successful is
vital for entrepreneurs. Actually, many researchers have paid attention to this field. They
tried to explore some determinants which can contribute to the performance of
crowdfunding projects. First, some researchers explored from a perspective of social
network. Zheng et al. (2014) developed a research model to indicate the importance of social
capital in reward-based crowdfunding practices based on a comparative research between
China and America. Colombo et al. (2015) discussed how social capital can be influenced by
early backers and capital and then affect reward-based crowdfunding. Second, some
scholars examined the role of management in crowdfunding projects. Hobbs et al. (2016)
focused on network management and campaign management during crowdfunding
campaigns. The former is related to number of backers, search results, Facebook shares,
and so on. The latter is related to pitch quality, reward quality, and updates. In addition,
Zheng et al. (2015) investigated role of trust management in reward-based crowdfunding.
They proved that community and collaboration atmosphere were two characteristics of
reward-based crowdfunding. Third, other studies focused on some geographic factors in
crowdfunding campaigns, because for backers, broad geographic dispersion inevitably
exists. Although crowdfunding platforms are able to diminish many distance-sensitive
costs, they cannot eliminate all of them (Agrawal et al., 2015). Mendes-Da-Silva et al. (2015)
employed a Brazilian crowdfunding platform as a case to indicate a negative association
between the backer-entrepreneurdistance and crowdfunding performance. Giudici et al. (2013)
discussed the relationships between social capital and territorial factors (Table I).
Generally, all these studies reveal some determinants of a successful project based on
some theoretical foundations and empirical studies. These research works are valuable for
people’s awareness and future researches of this field, but room for improvement still exists.
This study extends previous efforts by exploring the determinants of crowdfunding
performance in three ways.
First, previous studies never clearly tell the difference between the internal promotions
and external incentives in reward-based crowdfunding campaigns. Based on previous
Research perspective References Key findings
Social capital Zheng et al. (2014) Social network ties, obligations, and the shared meaning have
significant effects on crowdfunding performance
Colombo et al. (2015) The effect of internal social capital is mediated by capital and
backers collected in the campaign’s early days
Management Hobbs et al. (2016) Network management and campaign management are all
significant predicts of crowdfunding performance
Zheng et al. (2015) Creditworthiness and interactions between entrepreneurs and
backers are critical factors to reward-based crowdfunding
Geographic factors Mendes-Da-Silva
et al. (2015)
There exists negative association between the backer-
entrepreneur distance and crowdfunding performance
Giudici et al. (2013) Individual social capital impacts crowdfunding projects and
interacts with geo-localized territorial social capital
Table I.
Previous literatures
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External
supports in
reward-based
crowdfunding
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