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Exploring the dynamic influences and interaction effects of signals on backers’ investment in the crowdfunding market

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As a standard source of capital for entrepreneurs, crowdfunding has recently gained wide attention in business and academia. With scientific endorsement, some research is conducted to explore the antecedents of online crowdfunding success. The factors that can influence the backers’ investment which is the key to success are information from prior backers’ and creators’ behaviors. Based on the signaling theory, the purpose of this paper is to systematically investigate the dynamic influences and interaction effects of signals with different forms (action-based or opinion-based signals) and sources (creator-sourced or backer-sourced signals) on backers’ investment behaviors over a project-funding cycle.


A panel data set of 3,010 projects with 640,625 transaction records from April 28, 2013 to September 31, 2017 is collected from a famous online crowdfunding platform – in China and the negative binomial panel data model with fixed effect is used to obtain our empirical results.


The findings demonstrate that the work of different signals is significantly effective at the early stage of a project and decreases with time. Furthermore, our results show that there are both synergistic effect and substitution effect among different signals. Specifically, the direction of interaction effect depends on the forms of signals and the backers’ sensitivity toward that signal, and the interaction effects are also dynamic.


This paper has shed light on the roles of different signal types and their interactions in influencing funding behavior over a project-funding cycle, enriched the literature on crowdfunding and provided both theoretical and practical implications.
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Keywords: Crowdfunding; Decision making; Dynamic effect; Empirical study; Herd effect; Online investment behaviours; Social media; The signaling theory

Document Type: Research Article

Affiliations: School of Medicine and Health Management, Huazhong University of Science and Technology Tongji Medical College, Wuhan, China

Publication date: August 23, 2019

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