Abstract
As the platform economy expands, little is known about entrepreneurial mobility for those creating new ventures using online platforms. Few studies have focused on entrepreneurs’ decisions to relocate. Entrepreneurs using crowdfunding platforms, especially those in the arts and creative industries, present an interesting opportunity to investigate factors influencing relocation decisions. Our analysis sheds light on why crowdfunding creators relocate their projects, the factors that explain their destination choice, and how those factors differ by the type of crowdfunding venture. To understand entrepreneurs’ relocation decisions, we build a pseudo-panel dataset to track creator relocations on the largest reward-based crowdfunding platform (Kickstarter). The final dataset consists of over 25,000 instances where entrepreneurs within the USA made relocation decisions. Taken together, the Kickstarter data on thousands of creators over time, some of whom opted to move, reveals interesting patterns about who moved and where they went. We model their relocation decisions in two stages. First, we analyzed the decision to stay or relocate. Then, for those who relocate, we estimate a destination choice model that identifies the factors that influence which destination regions are selected. Even though these entrepreneurs utilize a platform-based tool for fundraising, they are strongly tied to their local geography. The results confirm that decisions to “change scenery” follow regional conditions relevant to local market size and their networks. The particular factors attracting these entrepreneurs depend on the sort of creative activity (e.g., music, film), as these creators exhibit tendencies to cluster in metros with well-developed crowdfunding communities.
This is a preview of subscription content, log in via an institution to check access.
Data availability
Data are available as cited in the article.
Notes
This approach, used elsewhere (e.g., Breznitz and Noonan 2020), preserves the interpretation of the continuous employment variables while the “missing” dummy captures the average effect of CBSAs lacking sufficient employment data.
These vectors are each jointly significant at the p < 0.0001 level in all models.
Although modeling campaign success is beyond the scope of this analysis, overall, there is a relocation penalty for success of creators who were successful in their initial campaign (but not for those who failed initially).
References
Acs, Z. J., & Megyesi, M. I. (2009). Creativity and industrial cities: a case study of Baltimore. Entrepreneurship & Regional Development. https://doi.org/10.1080/08985620903020086.
Agrawal, A., Catalini, C., & Goldfarb, A. (2015). Crowdfunding: geography, social networks, and the timing of investment decisions. Journal of Economic & Management Strategy. https://doi.org/10.1111/jems.12093.
Audretsch, D. B., & Lehmann, E. E. (2005). Does the knowledge spillover theory of entrepreneurship hold for regions? Research Policy. https://doi.org/10.1016/j.respol.2005.03.012.
Audretsch, D. B., Lehmann, E. E., Menter, M., & Wirsching, K. (2020). Intrapreneurship and absorptive capacities: the dynamic effect of labor mobility. Technovation. https://doi.org/10.1016/j.technovation.2020.102129.
Blau, J. (1989). The shape of culture. Cambridge: Cambridge University Press.
Borén, T., & Young, C. (2013). The migration dynamics of the ‘creative class’: evidence from a study of artists in Stockholm Sweden. Annals of the Association of American Geographers. https://doi.org/10.1080/00045608.2011.628263.
Breznitz, S. M., & Noonan, D. S. (2020). Crowdfunding in a not-so-flat world. Journal of Economic Geography. https://doi.org/10.1093/jeg/lbaa008.
Bureau of Labor Statistics. (2011). Available online at: https://www.bls.gov/data/#employment
Burtch, G., Ghose, A., & Wattal, S. (2014). Cultural difference and geography as determinants of online prosocial lending. MIS Quarterly. https://doi.org/10.2307/26634995.
Butticè, V., Colombo, M. G., & Wright, M. (2017). Serial crowdfunding, social capital, and project success. Entrepreneurship Theory and Practice. https://doi.org/10.1111/etap.12271.
Castells, M. (1996). The rise of the network society. Cambridge: Blackwell.
Cebula, R. J., Davis, M. L., Koch, J. V., & Saunoris, J. M. (2020). The relationship between entrepreneurial activity and domestic gross state in-migration patterns in the U.S. Applied Economics, https://doi.org/10.1080/00036846.2020.1737314.
Cha, J. (2017). Crowdfunding for video games: Factors that influence the success of and capital pledged for campaigns. International Journal on Media Management. https://doi.org/10.1080/14241277.2017.1331236.
Chan, C. S. R., Park, H. D., Patel, P., & Gomulya, D. (2018). Reward-based crowdfunding success: decomposition of the project, product category, entrepreneur, and location effects. Venture Capital. https://doi.org/10.1080/13691066.2018.1480267.
Coleman, S. J. (1990). Foundation of Social Theory. Cambridge: The Belknap Press of Harvard University Press.
Crozet, M. (2004). Do migrants follow market potentials? An estimation of a new economic geography model. Journal of Economic Geography, https://doi.org/10.1093/jnlecg/lbh029.
Darchen, S., & Tremblay, D. G. (2010). What attracts and retains knowledge workers/students: the quality of place or career opportunities? The cases of Montreal and Ottawa. Cities. https://doi.org/10.1016/j.cities.2009.12.009.
Dejean, S. (2020). The role of distance and social networks in the geography of crowdfunding: evidence from France. Regional Studies. https://doi.org/10.1080/00343404.2019.1619924.
Florida, R. (2002). The rise of the creative class. New York: Basic Books.
Glaeser, E. L., & Maré, D. C. (2001). Cities and skills. Journal of Labor Economics. https://doi.org/10.1086/319563.
Glaeser, E., & Shapiro, J. (2003). Urban growth in the 1990s: is city living back? Journal of Regional Science. https://doi.org/10.1111/1467-9787.00293.
Grant, J. L., & Kronstal, K. (2010). The social dynamics of attracting talent in Halifax. The Canadian Geographer / Le Géographe Canadien. https://doi.org/10.1111/j.1541-0064.2010.00310.x.
Graves, P. E. (1980). Migration and climate. Journal of Regional Science. https://doi.org/10.1111/j.1467-9787.1980.tb00641.x.
Guenther, C., Johan, S., & Schweizer, D. (2018). Is the crowd sensitive to distance?—How investment decisions differ by investor type. Small Business Economics. https://doi.org/10.1007/s11187-016-9834-6
Gunderson, R. J., & Sorenson, D. J. (2010). An examination of domestic migration from California counties. Journal of Regional Analysis & Policy, https://doi.org/10.22004/ag.econ.132439.
Hansen, H. K., & Niedomysl, T. (2009). Migration of the creative Class: Evidence from Sweden. Journal of Economic Geography. https://doi.org/10.1093/jeg/lbn046.
Josefy, M., Dean, T. J., Albert, L. S., & Fitza, M. A. (2017). The role of community in crowdfunding success: evidence on cultural attributes in funding campaigns to “save the local theater.”. Entrepreneurship Theory and Practice. https://doi.org/10.1111/etap.12263.
Judd, D. (1999). Constructing the tourist bubble. In D. Judd & S. Fainstein (Eds.), The Tourist City (pp. 35–53). New Haven: Yale University Press.
Kenney, M., & Zysman, J. (2020). The platform economy: restructuring the space of capitalist accumulation. Cambridge Journal of Regions, Economy and Society. https://doi.org/10.1093/cjres/rsaa001.
Kerr, W. R. (2018). The gift of global talent: how migration shapes business, Economy & Society. Redwood City: Stanford University Press.
Krupka, D. J., & Noonan, D. S. (2013). City air and city markets worker productivity gains across city sizes. International Regional Science Review. https://doi.org/10.1177/0160017611435359.
Langley, P., & Leyshon, A. (2017). Capitalizing on the crowd: the monetary and financial ecologies of crowdfunding. Environment and Planning A. https://doi.org/10.1177/0308518X16687556.
Lepawsky, J., Phan, C., & Greenwood, R. (2010). Metropolis on the margins: talent attraction and retention to the St. John’s city-region. The Canadian Geographer / Le Géographe Canadien. https://doi.org/10.1111/j.1541-0064.2010.00315.x.
Li, G. C. (2019). Kickstarter structured relational database. https://doi.org/10.7910/DVN/EOYBXM, Harvard Dataverse, V2.
Lin, M., & Viswanathan, S. (2016). Home bias in online investments: An empirical study of an online crowdfunding market. Management Science. https://doi.org/10.1287/mnsc.2015.2206.
Markusen, A. & Schrock, G. (2006). The artistic dividend: urban artistic specialization and economic development implications. Urban Studies, https://doi.org/10.1080/00420980600888478.
Martin Prosperity Institute. (2010). Copy of 3Ts and class data for 2010. Toronto: Canada.
McFadden, D. (1973). Conditional logit analysis of qualitative choice behavior. In P. Zarembka (ed.), Frontiers in econometrics (pp.105–142). New York: Academic Press.
McFadden, D. (1978). Modeling the choice of residential location. Transportation Research Record. (673).
McGranahan, D.A. (1999). Natural amenities drive rural population change. Agricultural Economic Report No. (AER-781). United States Department of Agriculture, Economic Research Service.
Mollick, E. (2014). The dynamics of crowdfunding: an exploratory study. Journal of Business Venturing. https://doi.org/10.1016/j.jbusvent.2013.06.005.
Mollick, E., & Robb, A. (2016). Democratizing innovation and capital access: the role of crowdfunding. California Management Review. https://doi.org/10.1525/cmr.2016.58.2.72.
Neal, Z. (2012). Creative employment and jet set cities: disentangling causal effects. Urban Studies. https://doi.org/10.1177/0042098011431282.
Niedomysl, T., & Hansen, J. K. (2010). What matters more for the decision to move: jobs versus amenities. Environment and Planning A. https://doi.org/10.1068/a42432.
Nunzia, C. (2020). The role of geographical clusters in the success of reward-based crowdfunding campaigns. The International Journal of Entrepreneurship and Innovation. https://doi.org/10.1177/1465750320915915.
Owen-Smith, J. & Powell, W. (2004). Knowledge networks as channels and Conduits: The Effects of Spillovers in the Boston Biotechnology Community. Organization Science, https://doi.org/10.1287/orsc.1030.0054.
Phaneuf, D. J., & Smith, V. K. (2005). Recreation demand models. In K.-G. Mäler & J. R. Vincent (Eds.), Handbook of environmental economics, volume 2 (pp. 670–761). Amsterdam: Elsevier-North Holland.
Regner, T. (2020). Crowdfunding a monthly income: an analysis of the membership platform Patreon. Journal of Cultural Economics. https://doi.org/10.1007/s10824-020-09381-5.
Rodríguez-Pose, A, & Lee, N. (2020). Hipsters Vs. Geeks? Creative workers, Stem and Innovation in US Cities. Cities, https://doi.org/10.1016/j.cities.2020.102653.
Roma, P., Petruzzelli, A. M., & Perrone, G. (2017). From the crowd to the market: the role of reward-based crowdfunding performance in attracting professional investors. Research Policy. https://doi.org/10.1016/j.respol.2017.07.012.
Scott, A. (2005). On Hollywood: the place, the industry. Princeton: Princeton University Press.
Scott, A. (2010). Jobs or amenities? Destination choices of migrant engineers in the USA. Papers in Regional Science. https://doi.org/10.1111/j.1435-5957.2009.00263.x.
Sorenson, O. (2018). Social networks and the geography of entrepreneurship. Small Business Economics. https://doi.org/10.1007/s11187-018-0076-7.
Taylor, M. Z. (2016). The politics of innovation: why some countries are better than others at science and technology. Oxford: Oxford University Press.
United States Census Bureau. (2011). Comparing 2011 American community survey data. Available online at: https://www.census.gov/programs-surveys/acs/guidance/comparing-acs-data/2011.html
United States Census Bureau. (2016). Comparing 2016 American community survey data. Available online at: https://www.census.gov/programs-surveys/acs/guidance/comparing-acs-data/2016.html
Vossen, D., Sternberg, R., & Alfken, C. (2019). Internal migration of the ‘creative class’ in Germany. Regional Studies. https://doi.org/10.1080/00343404.2019.1566699.
Woronkowicz, J., & Noonan, D. S. (2019). Who goes freelance? The determinants of self-employment for artists. Entrepreneurship Theory and Practice. https://doi.org/10.1177/1042258717728067.
Yankow, J. J. (2006). Why do cities pay more? An empirical examination of some competing theories of the urban wage premium. Journal of Urban Economics. https://doi.org/10.1016/j.jue.2006.03.004.
Funding
This paper could not have been written without the generous support of the Social Sciences and Humanities Research Council of Canada [grant number 895-2013-1008], the National Endowment for the Arts [award#: 1844331–38-C-18]. The opinions expressed are those of the authors and do not represent the views of the National Endowment for the Arts Office of Research & Analysis or the National Endowment for the Arts. The Arts Endowment does not guarantee the accuracy or completeness of the information included in this material and is not responsible for any consequences of its use.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflict of interest.
Code availability
Not applicable.
Additional information
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Electronic supplementary material
ESM 1
(DOCX 17 kb)
Rights and permissions
About this article
Cite this article
Noonan, D.S., Breznitz, S.M. & Maqbool, S. Looking for a change in scene: analyzing the mobility of crowdfunding entrepreneurs. Small Bus Econ 57, 685–703 (2021). https://doi.org/10.1007/s11187-020-00418-9
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11187-020-00418-9