Linguistic information distortion on investment decision-making in the crowdfunding market

Xu, YT (通讯作者),Huaqiao Univ, Coll Business Adm, Quanzhou, Peoples R China.
2022-2-22
Purpose Information distortion affects the perception of quality, which, in turn, influences investment decisions and determines the pledge results of fundraising. This study combines signalling theory with persuasion theory to empirically study the effects of linguistic information distortion from fraudulent cues on a crowdfunding campaign's fundraising outcomes using text analytics, with implications for entrepreneurs, platforms and investors. Design/methodology/approach This study empirically analyzes 328,974 crowdfunding projects from the Kickstarter platform. Information distortion is detected using four indicators, based on text mining analytics. An econometric model is built to estimate the impact of information distortion, while the predictive power of the information distortion is detected through machine learning. Findings The results inform that distortion in the blurb, detailed description and reward statement dampen a campaign's success, but embellishing the entrepreneur's biography enhances the success of financing. Furthermore, information distortion exhibits a significant inverted U-shaped influence. The effect of the interaction terms suggests that campaigns with high pledge goals are more sensitive to information distortion, and that native-speaking entrepreneurs are adept at applying linguistic skills to promote the campaign. Originality/value This study provides a linguistic method to detect the influence of information distortion on crowdfunding campaigns. Further, the study offers some practical suggestions for entrepreneurs on how to generate attractive narratives, and contributes to the investor's decision-making and informs the platform's promotion strategy.
MANAGEMENT DECISION
卷号:60|期号:3|页码:648-672
ISSN:0025-1747|收录类别:SSCI
语种
英语
来源机构
Huaqiao University; Huaqiao University; National Taipei University of Education; National Taiwan Normal University; National University of Singapore; National University of Singapore
资助信息
This work is partially supported by the National Nature Science Foundation of China Grant (72072062, 71601082), Natural Science Foundation of Fujian Province (2020J01782) and Ministry of Science & Technology, Taiwan (MOST 109-2511-H-003 -049 -MY3)
被引频次(WOS)
4
被引频次(其他)
4
180天使用计数
14
2013以来使用计数
58
EISSN
1758-6070
出版年
2022-2-22
DOI
10.1108/MD-09-2020-1203
关键词
Crowdfunding Information distortion Fraudulent cues Text analytics Investment
资助机构
National Nature Science Foundation of China(National Natural Science Foundation of China (NSFC)) Natural Science Foundation of Fujian Province(Natural Science Foundation of Fujian Province) Ministry of Science & Technology, Taiwan
WOS学科分类
Business Management
学科领域
循证管理学 循证经济学