A Spatiotemporal Analysis of Adoption Behavior at a Crowdfunding Market
DescriptionThe proliferation of Internet based platforms has created an emerging channel of funding – crowdfunding. In crowdfunding, an individual requests funding for an idea and a large number of unaffiliated individuals contribute to fund the project. Crowdfunded projects range from small creative projects to entrepreneurial ventures seeking millions of dollars in funding. The crowdfunding marketplaces have grown rapidly in recent years, attracting an estimated $5.1 billion worldwide in 2013. In theory, online markets remove some frictions that hinder market transactions, since they empower market participants with tools to lower communication and search costs. In other words, online markets provide a platform where market participants can make a transaction regardless of the location of their partners. As such, people believe that “location”, a key determinant of funding success for traditional channels, might not be critical for online crowdfunding markets. This raises an important question about how the adoption of crowdfunding by entrepreneurs is likely to evolve not only through time but also over space. In particular, how might entrepreneurs at crowdfunding markets react to the adoption of their peers? How do information channels play a role in this relationship? This research project is intended to examine these questions. We conduct our research in two stages. In stage one, we will develop an empirical model to conduct a spatiotemporal analysis of adoption behavior by entrepreneurs at a crowdfunding market. To dig deeper into social interactions of market participants we will pay a particular attention to two variables- geographical proximity and social similarity as a driver of peer influence. In stage two, we will conduct several tests to investigate a role of media in the diffusion process of crowdfunding. We aim to highlight differential effects of different types of media in crowdfunding markets. This project will make several implications. First, extant research highlights the role of geography in crowdfunding. However, the concept of social similarity has rarely been applied to this context. By examining both geographical proximity and social similarity in crowdfunding we extend the literature on crowdfunding. Furthermore, we attempt to examine the role of media in the spatiotemporal evolution of crowdfunding which is important but underexplored. Second, answering the questions can have implications for policy makers and platform providers. A better understanding of how crowdfunding is geographically diffused over time and how the media shapes this diffusion process will help them to implement better strategies to promote crowdfunding in a region.
|Effective start/end date
|1/10/15 → 1/09/17
- crowdfunding,social influence,geography,social media,