Does Crowdfunding Democratize Success? Revisiting the Effects of Agglomeration and Localized Knowledge Spillover on Creative Projects

Abstract

This study examines the effect of agglomeration and localized knowledge spillover on reward-based crowdfunding outcomes in the United States. By examining art projects specifically, we can measure how creative projects benefit from agglomeration or clustering, measured by the proportion of individuals employed in creative class jobs. We find that crowdfunding success among metro and non-metro counties is not homogenous, and that clustering among Creative Class or Bohemia Class workers leads to greater fundraising amounts. Our findings also suggest a mitigating effect of knowledge spillover, as projects originating from high natural amenity counties without high concentrations of Creative Class or Bohemia Class workers raise less money, supporting the Localized Knowledge Spillover Theory of Entrepreneurship.

Keywords: Art, Crowdfunding, Entrepreneurial Finance, Entrepreneurship, FinTech, Geography

JEL Classification: G23, L26, M13, R10, R12, Z1