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.
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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).
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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.
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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