IDEAS home Printed from
   My bibliography  Save this article

Success of Crowd-based Online Technology in Fundraising: An Institutional Perspective


  • Kshetri, Nir


The use of crowd-based online technology for raising funds is gaining popularity and credibility. This paper seeks to provide a better understanding of the effects of formal and informal institutions on the success of a crowdfunding project. It also analyzes how the effects of different types of institutions are likely to vary across the four different types of crowdfunding projects: (1) crowdlending, (2) crowdequity, (3) reward-based crowdfunding and (4) donation-based crowdfunding. A practical implication of this work is that the ease with which entrepreneurs and other types of fundraisers can raise money via crowdfunding platforms to fund a project depends upon the nature of formal and informal institutions in the economy. A theory of crowdfunding is proposed that explains these developing relationships.

Suggested Citation

  • Kshetri, Nir, 2015. "Success of Crowd-based Online Technology in Fundraising: An Institutional Perspective," Journal of International Management, Elsevier, vol. 21(2), pages 100-116.
  • Handle: RePEc:eee:intman:v:21:y:2015:i:2:p:100-116
    DOI: 10.1016/j.intman.2015.03.004

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. C Zhang & S T Cavusgil & A S Roath, 2003. "Manufacturer governance of foreign distributor relationships: do relational norms enhance competitiveness in the export market?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(6), pages 550-566, November.
    2. Kshetri, Nir, 2007. "Institutional factors affecting offshore business process and information technology outsourcing," Journal of International Management, Elsevier, vol. 13(1), pages 38-56, March.
    3. John F. Helliwell & Robert D. Putnam, 2007. "Education and Social Capital," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 1-19, Winter.
    4. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    5. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    6. Tore Ellingsen & Magnus Johannesson, 2009. "Time Is Not Money," Post-Print hal-00699366, HAL.
    7. Nadim Ahmad & Anders Hoffman, 2008. "A Framework for Addressing and Measuring Entrepreneurship," OECD Statistics Working Papers 2008/2, OECD Publishing.
    8. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-486, April.
    9. Back, Yujin & Praveen Parboteeah, K. & Nam, Dae-il, 2014. "Innovation in Emerging Markets: The Role of Management Consulting Firms," Journal of International Management, Elsevier, vol. 20(4), pages 390-405.
    10. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    11. Ellingsen, Tore & Johannesson, Magnus, 2009. "Time is not money," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 96-102, October.
    12. Kshetri, Nir & Dholakia, Nikhilesh, 2009. "Professional and trade associations in a nascent and formative sector of a developing economy: A case study of the NASSCOM effect on the Indian offshoring industry," Journal of International Management, Elsevier, vol. 15(2), pages 225-239, June.
    13. Kshetri, Nir, 2013. "Privacy and security issues in cloud computing: The role of institutions and institutional evolution," Telecommunications Policy, Elsevier, vol. 37(4), pages 372-386.
    14. Håkan J. Holm & Anders Danielson, 2005. "Tropic Trust Versus Nordic Trust: Experimental Evidence From Tanzania And Sweden," Economic Journal, Royal Economic Society, vol. 115(503), pages 505-532, April.
    15. Ajay K. Agrawal & Christian Catalini & Avi Goldfarb, 2011. "The Geography of Crowdfunding," NBER Working Papers 16820, National Bureau of Economic Research, Inc.
    16. Lai, Christine & Singh, Barjinder & Alshwer, Abdullah A. & Shaffer, Margaret A., 2014. "Building and Leveraging Interpersonal Trust Within and Across MNE Subsidiaries: A Social Exchange Perspective," Journal of International Management, Elsevier, vol. 20(3), pages 312-326.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Hossain Mokter & Oparaocha Gospel Onyema, 2017. "Crowdfunding: Motives, Definitions, Typology and Ethical Challenges," Entrepreneurship Research Journal, De Gruyter, vol. 7(2), pages 1-14, April.
    2. Tanja Jovanović, 2019. "Crowdfunding: What Do We Know So Far?," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 1-25, February.
    3. Nathalie Duran, 2016. "Crowdlending : les échanges sociaux dans les communautés de prêt," Post-Print hal-01651380, HAL.
    4. W. Cai & F.H.J. Polzin & F.C. Stam, 2019. "Crowdfunding and Social Capital : A Systematic Literature Review," Working Papers 19-05, Utrecht School of Economics.
    5. Nathalie Duran, 2016. "Le crowdlending, une opportunité de mission originale pour l'expert comptable ?," Post-Print hal-01651395, HAL.
    6. Zhiyuan Yu & Muhammad Hafeez & Lihan Liu & Muhammad Tariq Mahmood & Hong Wu, 2019. "Evaluating the Minor Coarse Cereals Product Crowdfunding Platform through Evolutionary Game Analysis," Sustainability, MDPI, vol. 11(5), pages 1-17, March.
    7. Mike Wright & Donald S. Siegel & Philippe Mustar, 2017. "An emerging ecosystem for student start-ups," The Journal of Technology Transfer, Springer, vol. 42(4), pages 909-922, August.
    8. Igra, Mark & Kenworthy, Nora & Luchsinger, Cadence & Jung, Jin-Kyu, 2021. "Crowdfunding as a response to COVID-19: Increasing inequities at a time of crisis," Social Science & Medicine, Elsevier, vol. 282(C).
    9. Mari-Liis Kukk & Laivi Laidroo, 2020. "Institutional Drivers of Crowdfunding Volumes," JRFM, MDPI, vol. 13(12), pages 1-28, December.
    10. Estrin, Saul & Gozman, Daniel & Khavul, Susanna, 2018. "The evolution and adoption of equity crowdfunding: entrepreneur and investor entry into a new market," LSE Research Online Documents on Economics 87351, London School of Economics and Political Science, LSE Library.
    11. Saul Estrin & Daniel Gozman & Susanna Khavul, 2018. "The evolution and adoption of equity crowdfunding: entrepreneur and investor entry into a new market," Small Business Economics, Springer, vol. 51(2), pages 425-439, August.
    12. Nathalie Duran, 2016. "Le crowdlending : une opportunité de mission originale pour l'expert-comptable ?," Post-Print hal-01900572, HAL.
    13. Kazem Mochkabadi & Christine K. Volkmann, 2020. "Equity crowdfunding: a systematic review of the literature," Small Business Economics, Springer, vol. 54(1), pages 75-118, January.
    14. Maier, Erik, 2016. "Supply and demand on crowdlending platforms: connecting small and medium-sized enterprise borrowers and consumer investors," Journal of Retailing and Consumer Services, Elsevier, vol. 33(C), pages 143-153.
    15. Ibarra Garza, Alberto & Cugueró-Escofet, Natàlia & Canela, Miguel Ángel, 2017. "Prosocial Crowdlending in Kenya," IESE Research Papers D/1166, IESE Business School.
    16. Stan Oana Mara & Fanea-Ivanovici Mina, 2019. "Time to act: discourse on time in crowdfunding for social entrepreneurship project," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 13(1), pages 1162-1172, May.
    17. Estrin, Saul & Gozman, Daniel & Khavul, Susanna, 2017. "Equity crowdfunding and early stage entrepreneurial finance: damaging or disruptive?," LSE Research Online Documents on Economics 86590, London School of Economics and Political Science, LSE Library.
    18. Kshetri, Nir, 2018. "Informal Institutions and Internet-based Equity Crowdfunding," Journal of International Management, Elsevier, vol. 24(1), pages 33-51.
    19. Moleskis, Melina & Canela, Miguel Ángel, 2016. "Crowdfunding Success: The Case Of Kiva.Org," IESE Research Papers D/1137, IESE Business School.
    20. Stasik Agata & Wilczyńska Ewa, 2018. "How do we study crowdfunding? An overview of methods and introduction to new research agenda," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 26(1), pages 49-78, March.
    21. Saul Estrin & Daniel Gozman & Susanna Khavul, 2017. "Equity Crowdfunding and Early Stage Entrepreneurial Finance: Damaging or Disruptive?," CEP Discussion Papers dp1498, Centre for Economic Performance, LSE.
    22. Cai, Wanxiang & Polzin, Friedemann & Stam, Erik, 2021. "Crowdfunding and social capital: A systematic review using a dynamic perspective," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    23. Nathalie Duran & Christel Dubrulle, 2017. "Les échecs du crowdlending, une étude exploratoire," Post-Print hal-01655014, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kshetri, Nir, 2018. "Informal Institutions and Internet-based Equity Crowdfunding," Journal of International Management, Elsevier, vol. 24(1), pages 33-51.
    2. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120, Elsevier.
    3. Kshetri, Nir, 2020. "The evolution of cyber-insurance industry and market: An institutional analysis," Telecommunications Policy, Elsevier, vol. 44(8).
    4. Anne Corcos & Yorgos Rizopoulos, 2011. "Is prosocial behavior egocentric? The “invisible hand” of emotions," Post-Print halshs-01968213, HAL.
    5. Michael Stuetzer & David B. Audretsch & Martin Obschonka & Samuel D. Gosling & Peter J. Rentfrow & Jeff Potter, 2018. "Entrepreneurship culture, knowledge spillovers and the growth of regions," Regional Studies, Taylor & Francis Journals, vol. 52(5), pages 608-618, May.
    6. Roy Thurik & Sander Wennekers & Ingrid Verheul & David Audretsch, 2001. "An eclectic theory of entrepreneurship: policies, institutions and culture," Scales Research Reports H200012, EIM Business and Policy Research.
    7. Ali, Abdul & Kelley, Donna J. & Levie, Jonathan, 2020. "Market-driven entrepreneurship and institutions," Journal of Business Research, Elsevier, vol. 113(C), pages 117-128.
    8. Christelle Perrin, 2012. "Les politiques publiques et l’aide financière humanitaire internationale," Post-Print hal-03169048, HAL.
    9. Ajzenman, Nicolas & Aksoy, Cevat Giray & Guriev, Sergei, 2020. "Exposure to Transit Migration, Public Attitudes and Entrepreneurship," IZA Discussion Papers 13130, Institute of Labor Economics (IZA).
    10. Dragos Dianu & Monica (Cenan) Ciucos & Alina Badulescu & Daniel Badulescu, 2021. "Public Policies To Support Entrepreneurship: Do They Contribute To Strengthen Smes Sector?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 39-48, July.
    11. Samuel Egbetokun & Evans S. Osabuohien & Temidayo Akinbobola, 2018. "Feasible Environmental Kuznets and Institutional Quality in North and Southern African Sub-regions," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 104-115.
    12. Matteo M. Galizzi & Daniel Navarro-Martinez, 2019. "On the External Validity of Social Preference Games: A Systematic Lab-Field Study," Management Science, INFORMS, vol. 65(3), pages 976-1002, March.
    13. Bijedić, Teita & Butkowski, Olivier K. & Kay, Rosemarie & Suprinovič, Olga, 2020. "Bestimmungsfaktoren des regionalen Gründungsgeschehens - eine Machbarkeitsstudie," IfM-Materialien 280, Institut für Mittelstandsforschung (IfM) Bonn.
    14. Gift Dafuleya, 2014. "Social Value Creation and Institution-Entrepreneurial Dynamics in a Three Sector Economy," Journal of Economics and Behavioral Studies, AMH International, vol. 6(10), pages 795-809.
    15. Nicholas Wilson & Wentao Xiong & Christine Mattson, 2011. "Is Sex Like Driving? Risk Compensation Associated with Male Circumcision in Kisumu, Kenya," Department of Economics Working Papers 2011-14, Department of Economics, Williams College, revised Jan 2012.
    16. Fritsch, Michael & Sorgner, Alina & Wyrwich, Michael, 2019. "Self-employment and well-being across institutional contexts," Journal of Business Venturing, Elsevier, vol. 34(6).
    17. Werner Güth & M. Vittoria Levati & Matteo Ploner, 2008. "The Impact of Payoff Interdependence on Trust and Trustworthiness," German Economic Review, Verein für Socialpolitik, vol. 9(1), pages 87-95, February.
    18. Daniel L. Bennett, 2021. "Local economic freedom and creative destruction in America," Small Business Economics, Springer, vol. 56(1), pages 333-353, January.
    19. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.
    20. Nyström, Kristina, 2015. "Pre- and post-entrepreneurship labor mobility of entrepreneurs and employees in entrepreneurial firms," Working Paper Series in Economics and Institutions of Innovation 420, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:21:y:2015:i:2:p:100-116. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.