Crowdfunding Dynamics

50 Pages Posted: 14 Oct 2019

See all articles by Paul Belleflamme

Paul Belleflamme

CORE/LIDAM, UCLouvain (Université Catholique de Louvain); CESifo (Center for Economic Studies and Ifo Institute)

Thomas Lambert

Rotterdam School of Management, Erasmus University; Erasmus Research Institute of Management (ERIM)

Armin Schwienbacher

SKEMA Business School

Multiple version iconThere are 2 versions of this paper

Date Written: 2019


Various forms of social learning and network effects are at work on crowdfunding platforms, giving rise to informational and payoff externalities. We use novel entrepreneur-backer data to study how these externalities shape funding dynamics, within and across projects. We find that backers decide to back a particular project based on past contributions not only to that project—as documented by prior work—but also to other contemporaneous projects—a novel result. Our difference-in-differences estimates indicate that such 'cross-project funding dynamics' account for 4-5% in the increase of contributions that projects generate on a daily basis. We show that recurrent backers are the main transmission channel of cross-project funding dynamics: by initiating social learning about project existence and quality, recurrent backers encourage future funding by other backers. Our results demonstrate that even though contemporaneous projects compete for funding, they jointly benefit from their common presence on the platform. We finally show that these crowdfunding dynamics stir platform growth, with important consequences for competition among platforms.

Keywords: crowdfunding, digital platforms, FinTech, network effects, social learning

JEL Classification: D430, G230, L140, L260, L860

Suggested Citation

Belleflamme, Paul and Lambert, Thomas and Schwienbacher, Armin, Crowdfunding Dynamics (2019). CESifo Working Paper No. 7797, Available at SSRN: or

Paul Belleflamme (Contact Author)

CORE/LIDAM, UCLouvain (Université Catholique de Louvain) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Thomas Lambert

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Rotterdam, 3000 DR


Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam

Armin Schwienbacher

SKEMA Business School ( email )

Avenue Willy Brandt
Euralille, 59777


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