Crowdfunding for entrepreneurship and digital technologies in the emerging markets: The role of informal and formal institutions

Crowdfunding has become a global phenomenon and a significant source for funding entrepreneurial ventures. For the emerging markets in particular, crowdfunding has emerged as an alternative significant financing tool given the restricted access to financial resources. At the same time, during the last decade digital technology has drastically changed the global economy especially for the emerging markets. The aim of the paper is to investigate if and how the adoption of digital technologies in infrastructure, usage and empowerment in the emerging markets enhances crowdfunding target achievement and crowdfunding success. Further, we explore how the presence of strong sociocultural (informal), economic and political institutions (formal) in the emerging markets is related with the adoption of digital technologies and, their direct impact on crowdfunding initiatives. Using a sample of 44 emerging economies over the period 2009–2023, our results indicate that the adoption of digital technologies support crowdfunding target achievement and success rate in emerging markets. Further, formal and informal institutions support crowdfunding investments, moderating at the same time the relationship between digital technology and crowdfunding target achievement and success. Our results bridge the gap in empirical research on crowdfunding adoption, shedding light on the role and importance of sociocultural, political and economic institutions in the emerging markets.