Regional social capital and moral hazard in crowdfunding
Journal
Journal of Business Venturing
ISSN
0883-9026
Type
journal article
Date Issued
2022-07
Author(s)
Abstract (De)
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.
Language
English
Refereed
Yes
Volume
37
Number
4
Division(s)
Eprints ID
266179