Work detail

Non-equity Crowdfunding: Funding Success and Dynamics on Hithit

Author: Mgr. Veronika Machová
Year: 2019 - summer
Leaders: doc. PhDr. Martin Gregor Ph.D.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 76
Awards and prizes:
Abstract: Non-equity crowdfunding, as an innovative way of financing new ideas, has been growing
enormously over recent years. Crowdfunding projects are often characterized by a
predetermined monetary goal and the length of the campaign. Furthermore, potential
contributors can observe the level of funding provided by others, which suggests that details
of previous contributions play an essential role in funding behavior. We obtain data from the
Czech crowdfunding platform Hithit, which allow us to empirically analyze the determinants
of success and the funding dynamics of crowdfunding projects. Outcomes from several probit
regressions indicate that shorter campaigns and campaigns offering private rewards of lower
value are more likely to be successful—but these results do not demonstrate causality. A short
campaign signals confidence; this positive signaling effect outweighs the marketingopportunities effect of a long campaign. Applying fixed effects model to panel data, we show
that the amount of contributions is negatively associated with the level of funding already
achieved, providing evidence of free-riding effect. However, the effect of past contributions is
reversed in the final phase of the campaign as the risk of breakdown increases. Moreover, we
found a positive and significant impact of recent marketing activity on social media on the
amount of contributions. Our findings help generate a greater understanding of the funding
behavior of contributors on Hithit and can be generalized to other platforms with similar




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