The influence of online information on investing decisions of reward-based crowdfunding |
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| Institution: | 1. Kenan-Flagler Business School, University of North Carolina, CB3490; McColl 4608, Chapel Hill, NC 27599, United States;2. Kenan-Flagler Business School, University of North Carolina, CB3490; McColl 4526, Chapel Hill, NC 27599, United States;1. School of Business, Aalto University, P.O. Box 21220, 00076 Aalto, Finland;2. College of Business, New Mexico State University, MSC 3DJ, P.O. Box 30001, Las Cruces, NM 88003-8001, USA;3. School of Science, Aalto University, P.O. Box 15500, 00076 Aalto, Finland;1. Université catholique de Louvain, CORE and Louvain School of Management, Belgium, and CESifo, Germany;2. Paris School of Business, France;3. University of Mannheim, Mannheim Centre for Competition and Innovation (MaCCI), Germany;1. Department of Information Systems, College of Business, City University of, Hong Kong, Hong Kong Special Administrative Region;2. School of Information, Renmin University of China, Beijing 100872, PR China;3. Smart City Research Center, Renmin University of China, Beijing 100872, PR China |
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| Abstract: | How does online information influence investor decisions? Funders or investors have access to a variety of information about a project or product when they make investment decisions. Which kind of information affects investor behavior the most? Based on the elaboration likelihood model, we developed a research model and conducted an empirical study using objective data collected from a Chinese crowdfunding website. It was found that signals of quality and electronic word of mouth have significant positive effects on funder investment decisions. Results show that larger introduction word counts and video counts make funders feel the project has higher quality, and higher “Like” counts and online reviews make funders feel the project has good electronic word of mouth. Furthermore, analysis of the data here reveals that the central route information (signals of project quality) and the peripheral route information (e-word of mouth) have almost equal effects on funder investment decisions in the Chinese crowdfunding context. On the other hand, the central route was significantly more important for Science & Technology and Agriculture projects, whereas the peripheral route was more important for Entertainment and Art projects. |
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