Developing and Validating a Theory-Based Model of Crowdfunding Investment Intention—Perspectives from Social Exchange Theory and Customer Value Perspective

Xiaobo Tao,Eric Shiu,Kai Zhao,Xiaocong Yang

doi:10.3390/su11092525

Abstract

In order to improve public financing sustainability in China, the Chinese government has announced several administrative policies on crowdfunding, concerning platform construction and operation, in recent years. However, the existing policy scope rarely mentions the importance of social psychology, which also plays a decisive role in determining the participation and success rates of crowdfunding. Therefore, this study uses the knowledge from social exchange theory (SET) and customer value perspective (CVP) to develop and validate a conceptual model of the key determinants of the public’s intention in investing in crowdfunded projects in China. Based on the primary survey data, the SEM (structural equation modeling) estimations suggest that: (1) communication, shared values, investors’ perceived benefits, and perceived risk have significant effects on crowdfunding investors’ trust in fundraisers of a particular crowdfunding project, which in turn act on their commitment and intentions to invest in the project; (2) trust strengthens funding intentions through fulfilling commitments, whereas its direct effect on funding intentions is insignificant; (3) commitment has a direct and significant positive effect on the enhancement of funding intentions. These findings propose a new perspective of improving public policies to support small and micro enterprises (SMEs) and individual innovative projects in China.

Highlights

Crowdfunding provides an alternative source of finance on the Internet for small and micro enterprises (SMEs) and private businesses to fund their projects
We explicitly modeled the level of crowdfunding intention as a function of intangible and tangible factors, such as perceived benefits, communication, shared value, perceived risks, trust, commitment, and the market prospects of the crowdfunding project
Following Ponte et al [48], we measured the investment intention of crowdfunding on four scales: (a) the probability that an investor considers investing in a crowdfunding project; (b) if an investor decided to invest in one crowdfunding project, they will stick to their word; (c) the probability of an investor’s investment in the specific crowdfunding project is high; and (d) the intention to invest in this specific crowdfunding project is explicit

Summary

Introduction

Crowdfunding provides an alternative source of finance on the Internet for small and micro enterprises (SMEs) and private businesses to fund their projects. Socialization plays a major role in the formation of investment intentions Along this line of thought, this study adopts the social exchange theory (SET) and the customer value perspective (CVP) together to develop hypothetical factors that could affect crowdfunding investment intentions in the context of social commerce. We explicitly modeled the level of crowdfunding intention as a function of intangible and tangible factors, such as perceived benefits, communication, shared value, perceived risks, trust, commitment, and the market prospects of the crowdfunding project. We conceptualize this analytical framework for three reasons.

Literature Review and Hypothesis Development

Sample Collection

Variable Measures and Scale Development

Independent Variables

Dependent Variable

Reliability and Validity of the Variables

Conclusions

Theoretical Contribution

Findings

Managerial Contribution