Investigations into the structure of crowdfunding research and the role of the content and linguistic cues in risk disclosure in crowdfunding campaigns

Crowdfunding is widely touted as a way to bring significant changes to the entrepreneurial finance landscape, enabling any entrepreneur to get easy access to financing by tapping into the online crowd. Because of its importance, crowdfunding research in various research areas continues to evolve. Despite its multidisciplinary nature, the centric of crowdfunding research is claimed to be on the determinants of success. This is particularly important given the high failure rate of crowdfunding campaigns and the lack of academic understanding in regard to the factors that contribute to funding success. These issues justify the need to: (1) reveal the overall objective of crowdfunding literature without a specific focus on success factors; and (2) to explore other factors that may contribute to crowdfunding success. In brief, this thesis seeks to investigate the structure and trend in crowdfunding research and to explore the role of risk disclosure in funding success. To achieve this, three empirical studies have been conducted. The first study adopts the bibliometric analysis in examining the structure and trends of crowdfunding-related publications using the citations, co-citations, and co-word analysis on a sample data of 2,956 articles published from the year 2008 to 2018. The data was collected from the premium Web of Science research database. Findings revealed that crowdfunding publications were predominantly in the business and management areas. Although crowdfunding is considered to have originated from the crowdsourcing concept, results from the co-word analysis unveiled that crowdfunding research has little connections to the broader concept of crowdsourcing. The results were expected as crowdfunding concept is specific to financing technology. The results also support previous claims by scholars that most of the publications in crowdfunding focus on funding success. These publications also receive higher citations which imply the importance of the topic in crowdfunding. These findings further support the need to investigate other factors that influence success. The next two studies investigate the role of risk disclosure in crowdfunding campaigns. Study 2 explores the role of risk disclosure in two phases of analysis. The first phase identifies the risk information categories communicated by the two groups of projects, the successful and the failed group. By utilising co-word analysis on a dataset that was comprised of 28,312 projects, the findings reveal that there are three categories of risk information:  risk related to the key operations and process (OPR), risk related to the ability of the team to complete the project (TR), and risk related to funding dependency and business process (FBR). In the second phase, the study utilises the computer-aided textual analysis approach to develop a specific dictionary to measure and identify the presence of the risk information categories in the risk disclosure messages. The study then applies the Ordinary Least Squares (OLS) and logistic regression to explore their relationship with success. The findings show that the OPR and TR are positively associated with success while the FBR has a negative relationship. The positive effects of OPR and TR imply that these risk information categories contain signals that are relatively costly to produce, in which only high-quality projects or experienced entrepreneurs could afford them. Findings on the FBR indicate that projects that communicate this risk information category are relatively low-quality when they solely depend on the outcome of the crowdfunding campaign. The results also show that when the 15 categories of projects were grouped into two major categories (i.e., technology and creative-based), these major categories of projects moderate the relationship between risk information categories and success. Furthermore, findings reveal that the technology-based projects have a stronger overall effect on success. This indicates that, except for the FBR, risk information disclosed by the entrepreneurs helps their projects to be successful, especially for entrepreneurs who are involved in technology-based projects. The investigation demonstrates that OPR and TR signal the preparedness and competency of the entrepreneurs. Further, the findings of FBR suggest that by fully relying on the campaign outcome and accentuating the risks of crowdfunding projects as similar to the risks involved in the business process signal, then, the projects disregard the intrinsic motivation of backers when funding a project on a reward-based crowdfunding platform. The third study complements the second study by investigating the effects of language usage in risk disclosure on success. This study examines the linguistic cues utilising the concept of language expectancy and impression management. By using the same sample as in the previous study (Study 2), the findings reveal that backers expect the entrepreneurs to discuss risk information using more concrete language. This indicates that language concreteness enhances the persuasion message even when discussing the uncertainty of crowdfunding projects. The analysis of the moderation effects on the relationship between language concreteness and success demonstrate that the temporal and social distance influences such relationships. The results indicate that entrepreneurs who set their funding duration shorter, and made themselves socially proximate, were expected to use more concrete language. Similar results were produced for the behaviour of entrepreneurs who attempted to reduce the social distance between themselves and the potential backers. These findings indicate that the effects of language concreteness were further enhanced when there was a fit between the expected language and the two psychological distance dimensions. Study 3 also reveals the importance of managing impressions when disclosing risk information in the disclosure. Findings indicate that impression management strategies such as tone management, excuses, exemplification and supplication lead to crowdfunding success. Interestingly, the supplication strategy that is considered as the most negative form of impression technique affects success positively. This suggests that making an impression of neediness coerced backers to support the project, thus further suggesting the backers' intrinsic motivation to fund a project on a reward-based crowdfunding platform. To summarise, this thesis provides valuable insights into crowdfunding research and the role of risk disclosure in crowdfunding success. Findings from Study 2 and 3, in particular, have significant theory, practical and policy implications. Key recommendations are provided for entrepreneurs, backers, and crowdfunding platforms on the importance of risk disclosure in influencing backers' funding decisions.