Crowdfunding Sustainable Projects: Cross-country Heterogeneity in Environmental Support Systems

Abstract

Past research has shown that ventures focused on addressing environmental sustainability face considerable difficulties in attracting funds from “traditional” sources of finance (i.e., external equity investors, banks), while crowdfunding could ease resource attraction for such ventures. Nevertheless, although crowdfunding is a global phenomenon—with both projects and backers located across the globe in countries with fundamentally different environmental support systems—our understanding of how this heterogeneity influences fundraising success remains limited. To examine this issue, we invoke an institutional logic perspective and study 290,126 Kickstarter campaigns located in 139 countries. Our findings are broadly in line with our hypotheses: in crowdfunding, where a community logic often prevails, fundraising success is greater for environmental sustainability projects, particularly when these projects are located in countries with weaker environmental support systems. Moreover, these projects are also more likely to tap funding from backers located in countries with stronger environmental support systems. We discuss the theoretical implications of these findings, which challenge commonly-held assumptions on institutions and cross-border money flows in entrepreneurial finance developed from examining traditional investors who generally hold a market logic.