Signaling theory in charity-based crowdfunding: Investigating the effects of project creator characteristics and text linguistic style on fundraising performance

Abstract

This research investigates the influence of project creator characteristics and text linguistic style on the effectiveness of fundraising campaigns within the realm of environmental crowdfunding. Drawing on a dataset encompassing 2641 campaigns conducted on the Tencent Gongyi platform spanning from April 2012 to December 2022, the study employs stratified regression analysis to discern the factors that contribute to variations in fundraising outcomes. In terms of hard information, the outcomes reveal that organization size, registration date, prior project initiation experience, and the organization's rating wield a noteworthy influence over the ultimate crowdfunding performance. Conversely, when considering soft information, the presence of negative emotional signals in crowdfunding texts was found to positively correlate with fundraising success. However, emotional intensity exhibited a negative impact on fundraising performance. These findings have substantial implications for practitioners engaged in environmental crowdfunding endeavors. When initiating a project, the creator should demonstrate his or her competence as much as possible to enhance credibility and in addition, should try to show negative signals in the text.