Individual’s financial investment decision-making in reward-based crowdfunding: evidence from China

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Shahab Y., Ye Z., Riaz Y., NTIM C.

Applied Economics Letters, vol.26, no.4, pp.261-266, 2019 (SSCI, Scopus) identifier identifier

  • Publication Type: Article / Article
  • Volume: 26 Issue: 4
  • Publication Date: 2019
  • Doi Number: 10.1080/13504851.2018.1464643
  • Journal Name: Applied Economics Letters
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.261-266
  • Keywords: backers, China, Crowdfunding, financial investment decision, online feedback
  • Open Archive Collection: Article
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

This article extends the work of Cecere et al. (Appl. Econ., 49(57): 5802–5813, 2017) and explores the antecedents of backers’ decision to invest in projects from eight categories on a reward-based crowdfunding platform in China. We extract data from 2011 to 2016 from the pioneer Chinese reward-based crowdfunding site ‘Demohour’. Our empirical investigation using OLS reveals that feedback score, social capital (followers on Weibo, project sharing on social media) and project quality (number of updates) are key motivating factors in investment decision and subsequently, project success or failure. Robustness tests also confirm the findings.