Gender Differences in Reward-Based Crowdfunding

51 Pages Posted: 1 Oct 2017 Last revised: 1 Aug 2018

See all articles by Tse-Chun Lin

Tse-Chun Lin

The University of Hong Kong - Faculty of Business and Economics

Vesa Pursiainen

The University of Hong Kong - Faculty of Business and Economics; University of Zurich - Department of Banking and Finance

Date Written: July 24, 2018

Abstract

Crowdfunding is one of the most successful segments of the burgeoning fintech industry that might challenge the role of traditional financial intermediaries. We document a number of gender differences in crowdfunding by analyzing a near-comprehensive sample of Kickstarter campaigns launched by individual entrepreneurs in the U.S. We argue that these differences are most plausibly explained by male entrepreneurs' relative overconfidence. Suggesting a tendency to overestimate the potential demand for their products, we find that male entrepreneurs set higher goal amounts, which results in more frequent campaign failures. In contrast, female entrepreneurs' campaigns are more likely to succeed and achieve higher pledged amounts relative to campaign goals. In successive campaigns, both male entrepreneurs' goal amounts and success rates converge toward those of female entrepreneurs, consistent with entrepreneurial experience mitigating the effects of overconfidence. The results are robust to using matched control groups, alleviating the potential concern about a selection effect.

Keywords: crowdfunding, fintech, gender differences, overconfidence, Kickstarter

JEL Classification: D22, D81, G20, G23, G41, J16, L26

Suggested Citation

Lin, Tse-Chun and Pursiainen, Vesa, Gender Differences in Reward-Based Crowdfunding (July 24, 2018). Available at SSRN: https://ssrn.com/abstract=3045050 or http://dx.doi.org/10.2139/ssrn.3045050

Tse-Chun Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Vesa Pursiainen (Contact Author)

The University of Hong Kong - Faculty of Business and Economics ( email )

Hong Kong
Hong Kong

University of Zurich - Department of Banking and Finance ( email )

Plattenstrasse 14
Z├╝rich, 8032
Switzerland

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