Article: The role of signals and third-party endorsements in reward-based crowdfunding: does the funding goal matter? Journal: International Journal of Entrepreneurial Venturing (IJEV) 2023 Vol.15 No.3 pp.232 - 255 Abstract: This study uses the twin lenses of signalling theory and certification theory, to explore the role of signals and third-party endorsement in reward-based crowdfunding success. We follow 339 rewards-based crowdfunding campaigns to capture campaign characteristics and funding outcomes. The study provides an insight into on the role of signals and third-party endorsement, extending extant knowledge to reveal that both signals' variables and third-party endorsement variables influence a project success. We also find a differential role of these variables according to the funding goal. Overall, our paper's contribution in the context of reward-based crowdfunding assumes great relevance given the prevalence of information asymmetries in crowdfunding compared to other more traditional financing mechanisms. Project founders can make use of the results to improve the information related to their projects to increase the chance to have a project successfully funded. Results are also relevant for crowdfunding platforms itself that might automatically assess the chance of successful funding of projects. Inderscience Publishers - linking academia, business and industry through research

Title: The role of signals and third-party endorsements in reward-based crowdfunding: does the funding goal matter?

Authors: Soumodip Sarkar; José Jacinto Bilau; Jorge Pires

Addresses: Department of Management, University of Évora, Largo dos Colegiais, Nº 2, 7004-516, Évora, Portugal ' Department of Management, Polytechnic Institute of Beja, Campus do Instituto Politécnico de Beja, Rua Pedro Soares 7800-295 Beja, Portugal ' Department of Management, Polytechnic Institute of Beja, Campus do Instituto Politécnico de Beja, Rua Pedro Soares 7800-295 Beja, Portugal

Abstract: This study uses the twin lenses of signalling theory and certification theory, to explore the role of signals and third-party endorsement in reward-based crowdfunding success. We follow 339 rewards-based crowdfunding campaigns to capture campaign characteristics and funding outcomes. The study provides an insight into on the role of signals and third-party endorsement, extending extant knowledge to reveal that both signals' variables and third-party endorsement variables influence a project success. We also find a differential role of these variables according to the funding goal. Overall, our paper's contribution in the context of reward-based crowdfunding assumes great relevance given the prevalence of information asymmetries in crowdfunding compared to other more traditional financing mechanisms. Project founders can make use of the results to improve the information related to their projects to increase the chance to have a project successfully funded. Results are also relevant for crowdfunding platforms itself that might automatically assess the chance of successful funding of projects.

Keywords: crowdfunding; entrepreneurial finance; new ventures; signalling theory; certification theory.

DOI: 10.1504/IJEV.2023.131659

International Journal of Entrepreneurial Venturing, 2023 Vol.15 No.3, pp.232 - 255

Accepted: 15 Nov 2022
Published online: 22 Jun 2023 *

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Title: The role of signals and third-party endorsements in reward-based crowdfunding: does the funding goal matter?

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