Abstract
This study examines the effects of two extreme sentiments (positive vs. negative) and eight types of emotion (anger, fear, anticipation, trust, surprise, sadness, joy, and disgust) implied by the wording of the campaign pitch on the outcomes of crowdfunding, and how these effects would vary according to cultural differences (Western vs. Eastern). We analyze a sample drawn from 17,289 crowdfunding projects on Kickstarter in the "design" and "technology" category to examine how feelings can affect the success, the number of backers, and pledged amounts for crowdfunding projects. We find three regularities by using propensity score match to map Western campaigns to Eastern ones. First, negative sentiment is adversely associated with the success probability but positively related to backer count in the Eastern culture subsample. Second, specific emotions have a larger impact on crowdfunding success among Western culture projects. Third, the statistical significance and direction of the concerning effects differ across the two cultures. Our findings stay robust when we add more controls in a stepwise way. Hence, the study contributes to the literature and provides suggestions for practitioners by exploring the role of derived feelings in the crowdfunding campaign pitch and the entrepreneurial pitch at the early financing stage.
Highlights
Crowdfunding is a new fundraising practice for creative projects, social causes, and ventures (Mollick, 2014; Ryu, 2019)
Crowdfunding literature has focused on essential factors influencing individual contributors' funding decisions and what drives successful crowdfunding campaigns, including the quality of campaign/creator, social influence/social networks, crowdfunding campaign design, and information on campaign progress
One specific stream of crowdfunding research focuses on the signals from the verbal and sentimental components of campaign pitches (Davis et al, 2017; Kaminski & Hopp, 2019; Parhankangas & Renko, 2017)
Summary
Crowdfunding is a new fundraising practice for creative projects, social causes, and ventures (Mollick, 2014; Ryu, 2019). For examining the derivative effects of verbal components, our research project first aims to explore how different sentimental components in a campaign pitch affect crowdfunding success This first research question complements the literature examining the role of discourse by creators in the crowdfunding context (Anglin et al, 2018; Parhankangas & Renko, 2017). We propose that the magnitude and significance of such impact are associated with the campaign's birthplace or location since emotions are largely determined by differences between Western and Eastern countries and regions in the cultural and socioeconomic environment surrounding creators and backers This second research question originates from the literature that seeks to explain helping behavior (e.g., contribution to a crowdfunding campaign) due to an interaction between dispositional and situational components (Mendoza et al, 2001).
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