Supply Chain Transparency and the Funding Performance in Reward-Based Crowdfunding

Abstract

Scholars recognize reward-based crowdfunding (RBCF) projects as a popular and effective way to fund entrepreneurial projects. Numerous studies focus on the antecedents that improve the funding performance of RBCF projects. This study adds to this research stream by examining the impact of supply chain transparency (SCT) grounded in signaling theory on funding performance – which was overlooked by the existing study. We proposed and examined hypotheses between SCT and its five sub-themes (transparency of Plan, Source, Make, Deliver, and Return) and the amount of pledged funds employing a hierarchical regression analysis on 11,638 RBCF projects from Kickstarter. Our results present that the transparency of Plan, Source, and Return positively contributes to a higher amount of pledged funds. More interestingly, we found an inverted U-shaped relationship between SCT, as well as the transparency of Make and Deliver and RBCF projects' Funding performance. Our further analysis shows that the number of pictures and videos significantly and negatively moderate the founded positive SCT–Funding performance relationship, thereby causing a "masking effect." The results of a series of robustness checks affirmed the reliability of our findings. Our research contributes significant theoretical implications by revealing the importance of SCT signals in crowdfunding, and we provide practical implications for achieving higher funding performance in RBCF projects.

Keywords: crowdfunding, Reward-based crowdfunding, Supply chain transparency, Signaling theory