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Thirty days are enough: what determines the crowd's cash time in agri-food crowdfunding?

Yaokuang Li, Junjuan Du and Weizhong Fu

China Agricultural Economic Review, 2020, vol. 12, issue 3, 553-575

Abstract: Purpose - The purpose of this paper is to investigate the factors influencing quick cash by crowd in agri-food crowdfunding campaigns; this paper utilizes prospect theory to analyze the value and weighting functions of the crowd's cash. Design/methodology/approach - Using samples of crowdfunding campaigns launched in the Zhongchou (www.Zhongchou.cn) platform's agriculture and food category, this paper employs a multivariate linear regression model to investigate factors that motivate the crowd to make quick investment decisions. Findings - The results demonstrate that lowering the investment threshold, improving publicity, and increasing the benefits of a campaign can increase the decision weight assigned to a campaign, thereby motivating the crowd to make quick investment decisions. Improving the product's reputation, enhancing campaign promotion, and diversifying the reward scheme can increase the crowd's expected value of the campaign – another motivation for a quicker cash decision. Practical implications - This paper can help initiators, platforms and regulators better fulfil their roles in promoting the rapid, healthy development of crowdfunding in the agri-food industry, especially in the context of the Chinese launch of significant initiatives to develop crowdfunding aimed at rural e-commerce and poverty alleviation. Originality/value - This paper extends the behavioral finance concept of prospect theory to agri-food crowdfunding campaigns and investigates factors that motivate the crowd to make quick investment decisions. Additionally, this paper demonstrates that the backers of crowdfunding are not perfectly rational and can be motivated to invest by increasing mean decision weight and expected value of a campaign.

Keywords: Agri-food crowdfunding; Crowd behavior; Prospect theory; Thirty days; Determinant (search for similar items in EconPapers)
Date: 2020
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