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Geographic Distance and Reward Crowdfunding Donation

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Individual Behaviors and Technologies for Financial Innovations

Abstract

This chapter describes the analysis of a large crowdfunding platform to examine pledges to music production projects and assess the relation between the fundraising accumulation period, the donor-entrepreneur distance, and the donors’ propensity to back projects. Our results suggest a significantly negative association between distance and the value of capital pledged to projects, which is consistent with the notion that the entrepreneur’s network of close contacts might play a central role in funding. Furthermore, our results contradict the idea that crowdfunding reduces the inhibiting effect of donor-entrepreneur distance. In addition, the results show that a long project exposure is associated with higher values of pledges. These results suggest practical implications for the study of crowdfunding as a financing platform. This study contributes to the literature on the use of crowdfunding as an alternative funding source in a major emerging market.

Portions of this chapter appeared in the 2016 paper “The impacts of fundraising periods and geographic distance on financing music production via crowdfunding in Brazil,” Journal of Cultural Economics, vol 40, pp 75–99.

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Authors and Affiliations

  1. Sao Paulo School of Business Administration (FGV/EAESP), Sao Paulo, SP, Brazil

    Wesley Mendes-Da-Silva

  2. University of Texas at Austin, Austin, TX, USA

    Wesley Mendes-Da-Silva

  3. Department of Management, UniGranRio, Rio de Janeiro, RJ, Brazil

    Luciano Rossoni

  4. Department of Business Economics, Fundação Getulio Vargas at São Paulo (FGV/EAESP), Sao Paulo, SP, Brazil

    Eduardo Francisco

  5. IC² Institute/University of Texas at Austin, Austin, TX, USA

    Cristiane C. Gattaz

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  1. Wesley Mendes-Da-Silva
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  2. Luciano Rossoni
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  3. Eduardo Francisco
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  4. Cristiane C. Gattaz
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Editors and Affiliations

  1. Sao Paulo School of Business Administration (FGV/EAESP), Sao Paulo, SP, Brazil

    Wesley Mendes-Da-Silva

  2. University of Texas at Austin, Austin, TX, USA

    Wesley Mendes-Da-Silva

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Mendes-Da-Silva, W., Rossoni, L., Francisco, E., Gattaz, C.C. (2019). Geographic Distance and Reward Crowdfunding Donation. In: Mendes-Da-Silva, W. (eds) Individual Behaviors and Technologies for Financial Innovations. Springer, Cham. https://doi.org/10.1007/978-3-319-91911-9_9

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