Regional social capital and moral hazard in crowdfunding

Item Type Journal paper
Abstract We contribute to institutional and social capital theory by developing a theoretical framework that suggests that informal and formal institutions are important in mitigating moral hazard in reward-based crowdfunding. We analyze a large sample of Kickstarter campaigns to test these predictions. We find a strong positive relationship between entrepreneurs' home-county social capital and their crowdfunding performance. A rule change that strengthens entrepreneurs' obligation to provide backers with the promised rewards is associated with a reduction in the effect of social capital, suggesting that formal institutions can substitute for informal ones and provides causal evidence of the effect of social capital.
Authors Lin, Tse-Chun & Pursiainen, Vesa
Journal or Publication Title Journal of Business Venturing
Language English
Subjects business studies
behavioral science
Refereed Yes
Date July 2022
Volume 37
Number 4
Publisher DOI
Official URL
Depositing User Prof. PhD Vesa Pursiainen
Date Deposited 05 May 2022 12:50
Last Modified 21 Nov 2022 14:19


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Lin, Tse-Chun & Pursiainen, Vesa (2022) Regional social capital and moral hazard in crowdfunding. Journal of Business Venturing, 37 (4).

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