A model for understanding the impact of trust on funders’ investment intention in Crowdfunding
الموضوعات :Mehran Saeidi Aghdam 1 , Sherrie Y. X. Komiak 2 , Seyed Salareddin Hosseini Ghoncheh 3 , Maghsoud Amiri 4 , Akbar Alam Tabriz 5
1 - Department of Entrepreneurship, Qazvin Branch, Islamic Azad University, Qazvin, Iran
2 - Faculty of Business Administration, Memorial University of Newfoundland, St. John’s, NL, Canada
3 - Department of Communication Science and Knowledge, Science and Research Branch, Islamic Azad University, .Tehran, Iran.
4 - Department of Industrial Management, Allameh Tabataba’i University, Tehran, Iran
5 - Department of Management, Shahid Beheshti University, Tehran, Iran.
الکلمات المفتاحية: Crowdfunding, Motive, Fundraising success, Trust ,
ملخص المقالة :
Crowdfunding has become a transformative force in modern finance, offering a viable alternative to traditional fundraising methods by enabling individuals and startups to gather capital from a diverse pool of investors. However, the decentralized and open nature of crowdfunding platforms presents significant challenges, particularly in maintaining trust, which is a critical determinant of funders' investment decisions. Given that crowdfunding investments are often new and inherently risky, there is a growing need to better understand the factors that influence funders’ trust and how this trust can be cultivated to encourage investment. This study develops a comprehensive model to assess the impact of trust on funders' investment intentions in crowdfunding. Through a survey-based approach, the research identifies key dimensions that affect trust, including shared values between funders and project owners, situational normality, website familiarity, and perceived ease of use. The results demonstrate that trust significantly enhances funders' perceived usefulness of crowdfunding projects, which in turn increases their investment intentions. Shared values are found to be a particularly strong factor in building trust, while surprisingly, communication between funders and project owners does not have a substantial effect on trust in the crowdfunding context. These findings provide important insights for crowdfunding platforms, highlighting the need to focus on factors such as platform usability and the alignment of values between funders and project owners. By fostering trust through these mechanisms, crowdfunding platforms can enhance funders’ confidence and encourage greater investment participation.
Azab, A., & Naderi, B. (2014). A variable neighborhood search metaheuristic for cellular manufacturing with multitask machine tools. Procedia CIRP, 20, 50-55.
Adnan, A., Fahmi, Z., Azlina, A., & Wan Salihin, W. (2016). The Effects of Perceived Usefulness and Perceived Ease of Use on Continuance Intention to Use EGovernment. Procedia Economics and Finance, 35, 644–649.
Agrawal, A., Catalini, C., & Goldfarb, A. 2014. Some Simple Economics of Crowdfunding Innovation Policy and the Economy, 63.
Allison T.H., Davis B.C., J.C. Short Webb, J.W., 2015, Crowdfunding in a prosocialmicrolending environment: examining the role of intrinsic versus extrinsic cues, Entrep. Theory Pract. 39 (1) 53–73.
Allison TH, Davis BC, Short JC, Web JW (2015) Crowdfunding in a prosocial microlending environment: examining the role of intrinsic versus extrinsic cues. Entrep Theory Pract 39(1):53–73
Belleflamme, P., Lambert, T., and Schwienbacher, A. 2014. “Crowdfunding: Tapping the Right Crowd.” Journal of Business Venturing, 29(5), 585–609.
Belleflamme, P., Omrani, N., and Peitz, M. 2015. “The Economics of Crowdfunding Platforms.” Information Economics and Policy, 33, 11–28.
Bi, S., Z, Liu, K, Usman, 2017, the influence of online information on investing decisions of reward-based crowdfunding, J. Bus. Res. 71 10–18.
Blau, P., 1964. Power and Exchange in Social Life. John Wiley & Sons, New York
Bock, G.W., Lee, J., Kuan, H.H., Kim, J.H., 2012. The progression of online trust in the multi-channel retailer context and the role of product uncertainty. Decis.Support Syst. 53 (1), 97–107.
Burtch, A. Ghose, S. Wattal, 2013, an empirical examination of the antecedents and consequences of contribution patterns in crowd-funded markets, Inf. Syst. Res. 24(3) 499–519.
Cholakova, M., Clarysse, B., 2015. Does the possibility to make equity investments in crowdfunding projects crowd out reward-based investments? Entrepreneurship Theory and Practice 39 (1), 145–172. https://doi.org/10.1111/etap.12139.
Colombo, M.G., Franzoni, C., and Rossi-Lamastra, C.2015. “Internal Social Capital and the Attraction of Early Contributions in Crowdfunding.” Entrepreneurship Theory and Practice, 39(1), 75–100.
Davis, F. D. "Perceived Usefulness, Perceived Ease of Use and User Acceptance of Information Technology," MIS Quarterly (13:3), September 1989, pp. 319-340.
Davis, F. D., Bagozzi, R. P., and Warshaw, P. R. "User Acceptance of Computer Technology: A Comparison of Two Theoretical Models," Management Science (35:8), August 1989, pp. 982-1003.
Gefen, D. (2000). E-commerce: the Role of Familiarity and Trust. Omega, 28 (6), 725–737.
Gefen, D., Karahanna, E., & Straub, D. (2003). Trust and TAM in Online Shopping: An Integrated Model. MIS Quarterly, 27(1), 51-90.
Gerber E.M., Hui J., 2013, Crowdfunding: motivations and deterrents for participation, ACM Trans. Comput. Hum. Interact. 20 (6) 34–41.
Griffin, E.A., 2005. A First Look at Communication Theory. McGraw-Hill, New York.
Guiso, L., Sapienza, P, Zingales, L, 2009, Cultural biases in economic exchange? The Quarterly Journal of Economics 124(3), pp. 1095-1131.
Hemer, J., Schneider, U., Dornbusch, F., & Frey, S. (2011). Crowdfunding und andere Formen670 informeller Mikrofinanzierung in der Projekt-und Innovationsfinanzierung. Stuttgart: Fraun(PDF) Crowdfunding: A Literature Review and Research Directions.
Ho, H.Y., Lin, P.C., Lu, M.H., 2014, Effects of online crowdfunding on consumers' perceived value and purchase intention, Anthropol. 17 (3) 837–844
Homans, G. G., 1985, Social Behavior: Its Elementary Forms, Harcourt, Brace and Company, New York.
Kang, M., Gao, Y., Wang, T., & Zheng, H. (2016). Understanding the Determinants of Funders’ Investment Intentions on Crowdfunding Platforms: A Trust-Based Perspective. Industrial Management & Data Systems, 116(8), 1800 - 1819.
Kramer, R.M., 1999. Trust and distrust in organizations: emerging perspectives, enduring questions. Ann. Rev. Psychol. 50 (1), 569–598. https://doi.org/10.1146/
Kuppuswamy, V., Bayus, B. L. 2015. Crowdfunding Creative Ideas: The Dynamics of Project Backers in Kickstarter. UNC Kenan-Flagler Research Paper No. 2013-15. Available at SSRN: http://ssrn.com/abstract=2234765 or http://dx.doi.org/10.2139/ssrn.2234765.
Kuppuswamy, V., Bayus, B.L., 2017, Does my contribution to your crowdfunding project matter? J. Bus. Ventur. 32 (1) 72–89.
Lambert, T., and Schwienbacher, A, 2010, “An Empirical Analysis of Crowdfunding.” Available at: http://www.crowdsourcing.org/document/an-empirical-analysis-of-crowdfunding-/2458.
Larralde, B., and Schwienbacher, A. 2012. “Crowdfunding of Small Entrepreneurial Ventures.” The Oxford Handbook of Entrepreneurial Finance, edited by D. Cumming. Vol. 369. New York: Oxford University Press
Latysheva A (2017) not just a business: the social components of russian crowdfunding. J Soc Policy Stud 15(4):660–668.
Lewicki, R.J., McAllister, D.J., Bies, R.I., 1998. Trust and distrust: new relationships and realities. Acad. Manage. Rev. 23 (3), 438–458. https://doi.org/10.5465/AMR.1998.926620.
Lin, M., & Viswanathan, S. (2013). Home bias in online investments: An empirical study of an online crowd funding market (SSRN Working Paper No. 2219546). Retrieved April 10, 2013, from http://papers.ssrn.com/sol3/Delivery.cfm?abstractid¼2219546
Macht, S.A. 2014, “Reaping Value-Added Benefits From Crowdfunders: What Can We Learn From Relationship Marketing?” Strategic Change, 23(7), 439–460.
MacMillan, K., Money, K., Money, A., Downing, S., 2005. Relationship marketing in the not-for-profit sector: an extension and application of the commitment-trust theory. J. Bus. Res. 58 (6), 806–818.
Massolution, Global crowdfunding market to reach $ 34.4B in 2015, Available at http://www.crowdsourcing.org/editorial/globalcrowdfundingmarkettoreach344bin2015predictsmassolutions2015cfindus tryreport/45376, (2015) June 29, 2015.
McKnight, D.H., Chervany, N.L., 2001. Trust and distrust definitions: one bite at a time. In: Trust in Cyber-societies. Springer, pp. 27–54.
McKnight, D.H., Chervany, N.L., 2001. What trust means in e-commerce customer relationships: an interdisciplinary conceptual typology. Int. J. Electron. Commerce 6 (2), 35–59.
McKnight, D.H., Choudhury, V., 2006. Distrust and trust in b2c e-commerce: do they differ? In: Proceedings of the 8th international conference on electronic commerce: The new e-commerce: innovations for conquering current barriers, obstacles and limitations to conducting successful business on the internet. ACM, pp. 482–491.
McKnight, D.H., Cummings, L.L., Chervany, N.L., 1998. Initial trust formation in new organizational relationships. Acad. Manage. Rev. 23 (3), 473–490.
Mohr, J., Spekman, R., 1994. Characteristics of partnership success: partnership attributes, communication behavior, and conflict resolution techniques. Strateg. Manag. J. 15 (2), 135–152.
Mollick, E., 2014. The dynamics of crowdfunding: an exploratory study. J. Bus. Ventur. 29 (1), 1–16.
Morgan, R.M., Hunt, S.D., 1994. The commitment-trust theory of relationship marketing. J. Marketing 58 (3), 20–38.
Nahapiet, J., and Ghoshal, S., 1998, “Social Capital, Intellectual Capital, and the Organizational Advantage.” Academy of Management Review, 23(2), 242–266.
Organ, D.W., Konovsky, M., 1989. Cognitive versus affective determinants of organizational citizenship behavior. J. Appl. Psychol. 74 (1), 157–164.
Ou, C.X., Sia, C.L., 2010. Consumer trust and distrust: an issue of website design. Int. J. Hum Comput Stud. 68 (12), 913–934.
Pavlou, P.A., 2002. Institution-based trust in interorganizational exchange relationships: the role of online b2b marketplaces on trust formation. J. Strateg. Inf. Syst. 11(3–4), 215–243.
Pavlou, P.A., Gefen, D., 2004. Building effective online marketplaces with institution-based trust. Inf. Syst. Res. 15 (1), 37–59.
Pitschner S., Pitschner-Finn, S., 2014, Non-profit differentials in crowd-based financing: evidence from 50,000 campaigns, Econ. Lett. 123 (3) 391–394.
Ryu S, Kim KG (2018) Money is not everything: a typology of crowdfunding project creators. J Strateg Inf Syst 27(4):350–368
Sha, W., 2009. Types of structural assurance and their relationships with trusting intentions in business-to-consumer e-commerce. Electronic Markets 19 (1), 43–54.
Shapiro, S.P., 1987. The social control of impersonal trust. Am. J. Sociol. 93 (3), 623–658
Sitkin, S.B., Roth, N.L., 1993. Explaining the limited effectiveness of legalistic ’remedies’ for trust/distrust. Organ. Sci. 4 (3), 367–392. https://doi.org/10.1287/orsc.4.
Steigenberger N (2017) why supporters contribute to reward-based crowdfunding. Int J Entrep Behav Res 23(2):336–353
Tang Y, Zheng QY, Mu L, Qiu Q (2013) Psychological mechanism of consumer participation behavior in hedonic website. Psychol Manag Soc Sci 16:349–354
Thaker, M.A., Thaker, H.M., & Pitchay, A.A. (2018). Modeling Crowdfunders’ Behavioral Intention to Adopt the Crowdfunding-Waqf Model (CWM) in Malaysia: The Theory of the Technology Acceptance Model. International Journal of Islamic and Middle Eastern Finance and Management, 11(5), 231-249.
Wang, S., Ngamsiriudom, W., & Hsieh, C.-H. (2015). Trust Disposition, Trust Antecedents, trust, and behavioral intention. The Service Industries Journal, 35(10), 555–572.
Whinston, A.B., Zhang, H., 2003, Building trust in online auction markets through an economic incentive mechanism, Decision Support Systems 35 (3), 2003, pp. 273–286
Young-Ybarra, C, Wiersema, M.,1999, "Strategic flexibility in information technology alliances: The influence of transaction cost economics and social exchange theory." Organization Science 10.4 (1999): 439-459.
Zehir, C., Şahin, A., Kitapçı, H., & Özşahin, M. (2011). The Effects of Brand Communication and Service Quality in Building Brand Loyalty through Brand Trust; The Empirical Research On Global Brands. Procedia - Social and Behavioral Sciences, 24, 1218-1231.
Zhao Q., Chen C.D., Wang J.L., Chen P.C. 2017, Determinants of backers' funding intention in crowdfunding: social exchange theory and regulatory focus, Telematics Inf. 34 370–384.
Zhao, Q., Chen, C.D., Wang, J.L., Chen, P.C., 2017, Determinants of backers’ funding intention in crowdfunding: Social exchange theory and regulatory focus, Telematics and Informatics 37, pp. 370-384.
Zheng H., D. Li, J. Wu, Y. Xu, 2014, the role of multidimensional social capital in crowdfunding: a comparative study in China and US, Inf. Manag. 51 (4) 488–496.
Zvilichovsky D, Danziger S, Steinhart Y (2018) Making-the-product-happen: a driver of crowdfunding participation. J Interact Mark 41:81–9.
