Crowdfunding in a Prosocial Microlending Environment: Examining the Role of Intrinsic Versus Extrinsic Cues

21 Pages Posted: 6 Jan 2015

See all articles by Thomas Allison

Thomas Allison

Washington State University

Blakley C. Davis

Oklahoma State University - Tulsa

Jeremy Short

Texas Tech University

Justin W. Webb

Oklahoma State University - Stillwater

Date Written: January 2015

Abstract

Microloans garnered from crowdfunding provide an important source of financial capital for nascent entrepreneurs. Drawing on cognitive evaluation theory, we assess how linguistic cues known to affect underlying motivation can frame entrepreneurial narratives either as a business opportunity or as an opportunity to help others. We examine how this framing affects fundraising outcomes in the context of prosocial lending and conduct our analysis on a sample of microloans made to over 36,000 entrepreneurs in 51 countries via an online crowdfunding platform. We find that lenders respond positively to narratives highlighting the venture as an opportunity to help others, and less positively when the narrative is framed as a business opportunity.

Suggested Citation

Allison, Thomas and Davis, Blakley C. and Short, Jeremy and Webb, Justin W., Crowdfunding in a Prosocial Microlending Environment: Examining the Role of Intrinsic Versus Extrinsic Cues (January 2015). Entrepreneurship Theory and Practice, Vol. 39, Issue 1, pp. 53-73, 2015. Available at SSRN: https://ssrn.com/abstract=2545628 or http://dx.doi.org/10.1111/etap.12108

Thomas Allison

Washington State University ( email )

Wilson Rd.
College of Business
Pullman, WA 99164
United States

Blakley C. Davis (Contact Author)

Oklahoma State University - Tulsa ( email )

700 North Greenwood
Tulsa, OK 74106
United States

Jeremy Short

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

Justin W. Webb

Oklahoma State University - Stillwater ( email )

Stillwater, OK 74078-0555
United States

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