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Does the Crowd Support Innovation? Innovation Claims and Success on Kickstarter

23 Pages Posted: 19 Jul 2017 Last revised: 5 Sep 2017

Anirban Mukherjee

Singapore Management University

Cathy L. Yang

HEC Paris - Marketing

Ping Xiao

University of Technology Sydney (UTS) - Faculty of Business

Amitava Chattopadhyay

INSEAD - Marketing

Date Written: September 5, 2017

Abstract

Online crowdfunding is a popular new tool for raising capital to commercialize product innovation. Product innovation must be both novel and useful (1-4). Therefore, we study the role of novelty and usefulness claims on Kickstarter. Startlingly, we find that a single claim of novelty increases project funding by about 200%, a single claim of usefulness increases project funding by about 1200%, and the co-occurrence of novelty and usefulness claims lowers funding by about 26%. Our findings are encouraging because they suggest the crowd strongly supports novelty and usefulness. However, our findings are disappointing because the premise of crowdfunding is to support projects that are innovative, i.e. that are both novel and useful, rather than projects that are only novel or only useful.

Keywords: Crowdfunding, Entrepreneurship, Innovation

JEL Classification: M13, O30, L26

Suggested Citation

Mukherjee, Anirban and Yang, Cathy L. and Xiao, Ping and Chattopadhyay, Amitava, Does the Crowd Support Innovation? Innovation Claims and Success on Kickstarter (September 5, 2017). HEC Paris Research Paper No. MKG-2017-1220. Available at SSRN: https://ssrn.com/abstract=3003283

Anirban Mukherjee (Contact Author)

Singapore Management University ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

Cathy L. Yang

HEC Paris - Marketing ( email )

Paris
France

Ping Xiao

University of Technology Sydney (UTS) - Faculty of Business ( email )

Australia

Amitava Chattopadhyay

INSEAD - Marketing ( email )

Boulevard de Constance
Fontainebleau, 77305
France
(33) 1 60 71 2643 (Phone)

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