Tone of Mass Media News Affect Pledge Amounts in Reward Crowdfunding Campaign

Wesley Mendes-da-Silva (), Israel José dos Santos Felipe (), Cristiana Cerqueira Leal () and Marcelo Otone Aguiar ()
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Wesley Mendes-da-Silva: São School of Business Administration of the Fundação Getulio Vargas
Israel José dos Santos Felipe: Federal University of Ouro Preto/Brazil and NIPE/Portugal
Cristiana Cerqueira Leal: School of Economics and Management & NIPE – Center for Research in Economics and Management, University of Minho
Marcelo Otone Aguiar: Federal University of Espirito Santo

No 2/2022, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: We study whether the tone of the daily news in mass media, used as a proxy for market sentiment, affects the typical daily pledge amount in reward crowdfunding campaigns. Based on unique data from over 350,000 pledges in reward crowdfunding campaigns in over 2,600 cities in Brazil, we find that market sentiment affects the willingness of backers to make larger pledges. Our unprecedented results reveal that good news induces pledges of larger amounts. The effect of tone over pledge amounts is inhibited by the geographic distance backer-entrepreneur, and it is reinforced by the income inequality in the pledger’s city.

Keywords: Natural Language Processing; Crowdfunding; Media; Investor sentiment (search for similar items in EconPapers)
JEL-codes: C41 G32 G41 I31 L26 O31 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-big and nep-cfn
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Citations: View citations in EconPapers (2)

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