Distance diffusion of home bias for crowdfunding campaigns between categories: Insights from data analytics

Lihuan Guo, Dongqiang Guo, Wei Wang, Hongwei Wang, Yenchun Jim Wu

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

As the information communication and investment of crowdfunding campaigns are usually accomplished online, online crowdfunding theoretically breaks the limitation of space. However, investors' behaviors still show significant home bias; furthermore, from a dynamic view, the changes in home bias during the funding duration reflect the investment preference. This paper studies the dynamics of home bias in crowdfunding investment as well as the distance diffusion of home bias in the crowdfunding market through data mining and econometric models. The distance between investors and founders gradually increases from 3605 km to 4229 km as the funding progresses, and home bias shows different diffusion patterns between categories. For most of the campaigns, the distance between backers and founders of the successful campaigns is always greater than that of the failed ones; thus, the distance diffusion impacts the pledge results. However, the study also finds that for some categories, home bias does not play a positive role in investment or that it even shows negative impacts, among which food and technology are two extreme categories. The study provides a theoretical basis from the perspective of user behavior to analyze online investment and to improve the promotion of crowdfunding campaigns.

Original languageEnglish
Article number1251
JournalSustainability (Switzerland)
Volume10
Issue number4
DOIs
Publication statusPublished - 2018 Apr 19
Externally publishedYes

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Keywords

  • Crowdfunding
  • Distance diffusion
  • Entrepreneurship
  • Home bias
  • Kickstarter
  • Pledge results

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

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