Abstract
Crowdfunding has been widely used by small and micro enterprises, which can raise funds through launching a project in crowdfunding platform. It is also beneficial to sustainable financing. What is more, the success of crowdfunding projects facilitates the sustainable development of those growing enterprises. In this study, from the perspective of information communication and based on information asymmetry and signaling theory, we identify three dimensions of information description, including information quantity (word count, picture count and video count), information attitude (as measured by comment), and information quality (readability and update). We empirically examine their direct effects on crowdfunding success and the moderating effect of information attitude using binary logistic regression. Data (N = 7207) is collected from Kickstarter, a popular crowdfunding platform. The results reveal that when considering these three dimensions of information description together, word count is associated with crowdfunding success in an inverted-U shape. Picture count, video count, comment, and update have positive effects on crowdfunding success. In contrast, readability is negatively related to crowdfunding success. In addition, we find that comment negatively moderates the effect of picture count on crowdfunding success. These findings show the significance of information description on crowdfunding success, bringing theoretical and practical insights for project creators.
Highlights
As an innovative sustainable financing model, crowdfunding plays a crucial role in the sustainable development of growing enterprises, which has become increasingly popular and has attracted increased academic interest in recent years [1,2,3,4,5,6,7,8]
In this study, we explore the effects of information description on crowdfunding success from the perspective of information communication
On the basis of examining the linear effect of these three dimensions, we further explore whether there exists the inverted-U influence of words on crowdfunding success and the moderating effect of comments on the relationship between information quantity and crowdfunding success
Summary
As an innovative sustainable financing model, crowdfunding plays a crucial role in the sustainable development of growing enterprises, which has become increasingly popular and has attracted increased academic interest in recent years [1,2,3,4,5,6,7,8]. Kickstarter and Indiegogo are the two largest crowdfunding platforms in the world. For small and micro enterprises, crowdfunding can help them raise funds and bring products to market. In a recent research report, Clifford [11] found that the failure rate of financing ranges from 69% (Kickstarter.com) to 87% (Indiegogo.com) among the five largest crowdfunding platforms. This means that the actual completion rate of financing is low, and the financing success rate needs to be improved. It is crucial to identify general antecedents of financing success or performance, because it can provide insights to project creators to improve the rate of crowdfunding success
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