How Pro-social Framing Affects the Success of Crowdfunding Projects: The Role of Emphasis and Information Crowdedness

Daniela Defazio, Chiara Franzoni, Cristina Rossi-Lamastra

Research output: Contribution to journalArticlepeer-review

61 Citations (SciVal)

Abstract

Crowdfunding is regarded a financing mechanism that could improve the funding opportunities of businesses with a pro-social orientation. Indeed, it is assumed that on digital platforms, citizens are inclined to provide more support to projects with a social benefit than to those without such an orientation, with significant ethical implications for the common good. Yet, extant empirical evidence regarding such a claim is still inconclusive. To advance this discussion, the present paper analyzes the conditions that influence crowd support for projects displaying a pro-social orientation on a reward-based crowdfunding platform. To build our hypotheses, we adopt the lens of framing theory, and we relate it to the digital context. Beginning from the premise that, on crowdfunding platforms, information about projects has a hierarchical structure, we argue that a project’s success crucially depends on how much its proponent emphasizes the pro-social cues within this structure. Moreover, we propose that because pro-social cues demarcate a project over others, the effectiveness of pro-social framing is enhanced when the number of projects on the platform, i.e., its crowdedness, increases. Logit estimates on 8631 Kickstarter projects indicate that pro-social framing is positively associated with success as we expected, yet only when it is moderately emphasized. Further, we find that crowdedness on the platform positively moderates the effect of pro-social orientation on success.
Original languageEnglish
Pages (from-to)357–378
JournalJournal of Business Ethics
Volume171
Early online date23 Jan 2020
DOIs
Publication statusPublished - 1 Jun 2021

Funding

We thank Andrew Crane, Daniela Ceresa, Dimo Dimov, Simona Giorgi, Giancarlo Giudici, Massimiliano Guerini, Thomas Gegenhuber, Davide Hahn, Christos Kolympiris, Ammon Salter, Ahmed Sewaid, Paul F. Skilton, Francesca Tenca, and participants of the 35th Egos subtheme Digitalization of Work and Organizations, 2018 EntFin Conference, 2018 R&D Management Conference, 2017 Babson Conference, for their helpful comments. We are grateful to Stephan Hielscher for his help in validating the list of words used in the empirical analysis. We also thank platform founders and managers Cindy Wu e Danny Luan (experiment.com), Angelo Rindone (Produzioni dal Basso and Folkfunding), and Claudio Bedino (Oval Money and Starteed) for their useful insights on crowdfunding platforms. We are indebted to three anonymous reviewers and the section editor for their valuable comments and guidance.

Keywords

  • Sustainability
  • social finance

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