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Distance Diffusion of Home Bias for Crowdfunding Campaigns between Categories: Insights from Data Analytics

Lihuan Guo (), Dongqiang Guo (), Wei Wang (), Hongwei Wang () and Yenchun Jim Wu ()
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Lihuan Guo: College of Business Administration, Huaqiao University, Quanzhou 362021, China
Dongqiang Guo: College of Business Administration, Huaqiao University, Quanzhou 362021, China
Wei Wang: College of Business Administration, Huaqiao University, Quanzhou 362021, China
Hongwei Wang: School of Economics and Management, Tongji University, Shanghai 200092, China
Yenchun Jim Wu: Graduate Institute of Global Business and Strategy, National Taiwan Normal University, Taipei 10645, Taiwan

Sustainability, 2018, vol. 10, issue 4, 1-22

Abstract: As the information communication and investment of crowdfunding campaigns are usually accomplished online, online crowdfunding theoretically breaks the limitation of space. However, investors’ behaviors still show significant home bias; furthermore, from a dynamic view, the changes in home bias during the funding duration reflect the investment preference. This paper studies the dynamics of home bias in crowdfunding investment as well as the distance diffusion of home bias in the crowdfunding market through data mining and econometric models. The distance between investors and founders gradually increases from 3605 km to 4229 km as the funding progresses, and home bias shows different diffusion patterns between categories. For most of the campaigns, the distance between backers and founders of the successful campaigns is always greater than that of the failed ones; thus, the distance diffusion impacts the pledge results. However, the study also finds that for some categories, home bias does not play a positive role in investment or that it even shows negative impacts, among which food and technology are two extreme categories. The study provides a theoretical basis from the perspective of user behavior to analyze online investment and to improve the promotion of crowdfunding campaigns.

Keywords: entrepreneurship; crowdfunding; home bias; distance diffusion; pledge results; Kickstarter (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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