Individual's Financial Investment Decision-Making in Reward-Based Crowdfunding: Evidence from China

Shahab, Y., Ye, Z., Riaz, Y., and Ntim, C.G. (2018). ‘Individual’s Financial Investment Decision-making in Reward-based Crowdfunding: Evidence from China’, Applied Economics Letters, Forthcoming

10 Pages Posted: 27 Apr 2018

See all articles by Yasir Shahab

Yasir Shahab

School of Accounting, Xijing University

Zhiwei Ye

University of International Business and Economics (UIBE)

Yasir Riaz

University of Northampton; Lahore University of Management Sciences

Collins G. Ntim

University of Southampton Business School, UK; University of Southampton

Date Written: April 10, 2018

Abstract

This paper extends the work of Cecere et al. (Appl. Econ., 49(57): 5802-5813, 2017) and explores the antecedents of backers’ decision to invest in projects from eight categories on a reward-based crowdfunding platform in China. We extract data from 2011 to 2016 from the pioneer Chinese reward-based crowdfunding site “Demohour”. Our empirical investigation using Ordinary Least Squares (OLS) reveals that feedback score, social capital (followers on Weibo, project sharing on social media) and project quality (number of updates) are key motivating factors in investment decision and subsequently, project success or failure. Robustness tests also confirm the findings.

Keywords: Crowdfunding, backers, financial investment decision, online feedback, China

JEL Classification: G19, L19, M13, M21

Suggested Citation

Shahab, Yasir and Ye, Zhiwei and Riaz, Yasir and Ntim, Collins G., Individual's Financial Investment Decision-Making in Reward-Based Crowdfunding: Evidence from China (April 10, 2018). Shahab, Y., Ye, Z., Riaz, Y., and Ntim, C.G. (2018). ‘Individual’s Financial Investment Decision-making in Reward-based Crowdfunding: Evidence from China’, Applied Economics Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3159749

Yasir Shahab

School of Accounting, Xijing University ( email )

Xijing Road
Chang'An District
Xi'an, Shaanxi Province, Shaanxi Province 710123
China
+8613126584641 (Phone)

Zhiwei Ye

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Yasir Riaz

University of Northampton

Waterside Campus
University Drive
Northampton, NN1 5PH
United Kingdom

Lahore University of Management Sciences ( email )

D.H.A, Lahore Cantt
Lahore, Punjab 54792
Pakistan

HOME PAGE: http://www.lums.edu.pk

Collins G. Ntim (Contact Author)

University of Southampton Business School, UK ( email )

Southampton Business School
Highfield
Southampton, England SO17 IBJ
United Kingdom
+44 (0) 238059 4285 (Phone)
+44 (0) 238059 3844 (Fax)

HOME PAGE: http://www.southampton.ac.uk/business-school/about/staff/cgn1n11.page

University of Southampton ( email )

Southampton, SO17 1BJ
United Kingdom

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