Geographic Distance and Reward Crowdfunding Donation
This chapter describes the analysis of a large crowdfunding platform to examine pledges to music production projects and assess the relation between the fundraising accumulation period, the donor-entrepreneur distance, and the donors’ propensity to back projects. Our results suggest a significantly negative association between distance and the value of capital pledged to projects, which is consistent with the notion that the entrepreneur’s network of close contacts might play a central role in funding. Furthermore, our results contradict the idea that crowdfunding reduces the inhibiting effect of donor-entrepreneur distance. In addition, the results show that a long project exposure is associated with higher values of pledges. These results suggest practical implications for the study of crowdfunding as a financing platform. This study contributes to the literature on the use of crowdfunding as an alternative funding source in a major emerging market.
KeywordsFintech Crowdfunding Fundraising Social networks
JEL CodeA13 D85 L14
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