Cultural entrepreneurship and legitimate distinctiveness in international prosocial crowdfunding

Abstract

Prosocial crowdfunding is a recent international business phenomenon which allows entrepreneurs from emerging nations to post microloan requests online for fundraising. While the crowdfunding topic has attracted much academic interest in recent years, little is known about the effect of cultural differences on crowdfunding dynamics. This study draws on the cultural entrepreneurship literature to assess whether a borrower’s cultural alignment with his or her own country increases or decreases funding speed. We investigate whether prosocial lenders reward borrower profiles that cue cultural distinctiveness through a Computer-Aided-Text-Analysis (CATA) of 127,597 profile loan descriptions and observations nested within 37 countries. It is found that cultural alignment on two dimensions—temporal awareness and commonality—is positively related to funding time, thus suggesting that a cultural misalignment is preferred by lenders. Our discussion highlights why nonconformity to local culture may be interpreted as legitimate distinctiveness in the prosocial crowdfunding context.