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It's all in the (Sub-)title? Expanding Signal Evaluation in Crowdfunding Research

Author

Listed:
  • Isaak, Andrew Jay
  • Selasinsky, Constantin von

Abstract

Research on crowdfunding success that incorporates CATA (computer-aided text analysis) is quickly advancing to the big leagues (e.g., Parhankangas and Renko, 2017; Anglin et al., 2018; Moss et al., 2018) and is often theoretically based on information asymmetry, social capital, signaling or a combination thereof. Yet, current papers that explore crowdfunding success criteria fail to take advantage of the full breadth of signals available and only very few such papers examine technology projects. In this paper, we compare and contrast the strength of the entrepreneur's textual success signals to project backers within this category. Based on a random sample of 1,049 technology projects collected from Kickstarter, we evaluate textual information not only from project titles and descriptions but also from video subtitles. We find that incorporating subtitle information increases the variance explained by the respective models and therefore their predictive capability for funding success. By expanding the information landscape, our work advances the field and paves the way for more fine-grained studies of success signals in crowdfunding and therefore for an improved understanding of investor decision-making in the crowd.

Suggested Citation

  • Isaak, Andrew Jay & Selasinsky, Constantin von, 2020. "It's all in the (Sub-)title? Expanding Signal Evaluation in Crowdfunding Research," EconStor Conference Papers 338889, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esconf:338889
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    References listed on IDEAS

    as
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    More about this item

    Keywords

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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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