Crowdfunding digital platforms: Backer networks and their impact on project outcomes

• Main Authors: TAN, Yee Heng, REDDY, Srinivas K.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: Crowdfunding; Digital strategy; Social influence; Social networks; E-Commerce; Finance and Financial Management; Marketing; Technology and Innovation
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6605; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7604/viewcontent/1_s2.0_S0378873320300812_main.pdf
• Institution: Singapore Management University

Crowdfunding platforms serve to connect project creators and backers. Previous research has explored several project and platform determinants that impact crowdfunding outcomes. However, there has been limited research on these determinants at an individual level. Our paper addresses how backers may influence the outcomes of projects in crowdfunding platforms. We explore several methods commonly used in the industry to identify influence and show that centrality measures through a backer affiliation network best exemplifies influence. Using data from Kickstarter, we construct a weighted backer network based on 52,678 common projects backed by 11,134 backers. Controlling for digital media mentions and project quality, we find evidence that backers in central positions within the network have a positive impact on multiple project outcomes such as the project success rates, amount of funds raised, speed of reaching the crowdfunding goal as well as the number of backers contributing to the project. These findings are replicated and reinforced by using data from a different crowdfunding platform using the entire backer network based on 1095 projects backed by 87,896 backers. Several robustness tests are used to validate these results.