A Non-Liner Decision Model for Green Crowdfunding Project Success: Evidence from China

Abstract

Green growth and environmental sustainability have become a significant focus in today’s living. We believe that green crowdfunding project can make an important contribution to the creation and evaluation of environmental systems. This study aims to investigate the determinants of green crowdfunding project success. Contrary to the linear relationship in previous literature, we propose a non-liner decision model that includes three determinants, funds pledge, goal setting, and project duration to predict project success. The quantitative approach method was employed. We crawl data on 1389 green crowdfunding projects from Tencent Lejuan, a crowdfunding platform in China. By using ordinary least square method to conduct data analysis, we find that the effect of goal setting on project success is non-linear as low and moderate levels of goal setting are not always likely to have a significant impact on project success, but the presence of a higher goal is likely to exert a positive effect on project success. Moreover, results show that the effect of project duration on project success is non-linear as short and moderate levels of duration is not always certain to have significant impact on project success, but the presence of a long duration is likely to exert a positive effect on project success. This study has implications for fund-seekers for green crowdfunding projects and managers of crowdfunding platforms.

Crowdfunding green projects in Brunei: awareness and investing preferences

“…A major barrier facing green projects especially in the ASEAN region is related to financing, whereby there is restricted access to financing and even when there is financing available, the costs are usually high (The ASEAN-German Energy Programme (AGEP)Team, 2018). Green projects will take a long period of time to show results (Yang et al , 2019) and have low rates of returns (Taghizadeh-Hesary and Yoshino, 2020); hence, financial institutions are unwilling to take up the risk to invest in green projects. Thus, crowdfunding is viewed as a possible alternative for financing these projects.…”

“…However, starting a green project or company is difficult as there are many barriers to be overcome such as laws and regulations, collection of taxes and financing (Meeuwsen, 2013). It is difficult to get funding for most green projects mainly due to the high capital investment and uncertainties in the future value of the projects, thus making it difficult to find financial institutions that are willing to take the risk (Yang et al , 2019). According to Taghizadeh-Hesary and Yoshino (2020), green investments in renewable energy and energy efficiency projects have seen a decrease of 1% and 3% for the years 2017 and 2018, respectively, and it is expected that this will reduce further.…”

The Effect and Impact of Signals on Investing Decisions in Reward-Based Crowdfunding: A Comparative Study of China and the United Kingdom

“…Therefore, building upon motivation theory, the importance of proper goal setting is implied. Thus, we can claim that goal setting is an essential factor for motivations, which has the opportunity of enhancing performance (Yang et al 2019). Suitable goal setting acts as a guarantee and ensures the fruitful initiation of a project initiation and its future success (Cumming et al 2020).…”

“…Former/earlier studies have been tasked with and have focused on investigating the role that signals play in resolving the problem of information asymmetry in crowdfunding markets (Courtney et al 2017;Usman et al 2019;Nguyen 2017;Wang et al 2018), but some of these earlier empirical studies revealed inconsistent results while investigating the role, importance and effects of signals. The effects of goal setting on campaign success fall under this category (studies with inconsistent results), given that few studies have highlighted any positive effects (Li and Duan 2014;Yang et al 2019), no effects (Xiao et al 2014) and negative effects (Burtch et al 2013;Lagazio and Querci 2018;Koch and Siering 2015;Kunz et al 2017;Petitjean 2017). Similarly, inconsistent results concerning the impact of updates and comments on project success were either positive (Wang et al 2018;Borst et al 2017;Yang et al 2019;Shahab et al 2018), negative (Kuppuswamy and Bayus 2013;Raab et al 2017), or with no impact (Petitjean 2017;Cordova et al 2015).…”

“…The effects of goal setting on campaign success fall under this category (studies with inconsistent results), given that few studies have highlighted any positive effects (Li and Duan 2014;Yang et al 2019), no effects (Xiao et al 2014) and negative effects (Burtch et al 2013;Lagazio and Querci 2018;Koch and Siering 2015;Kunz et al 2017;Petitjean 2017). Similarly, inconsistent results concerning the impact of updates and comments on project success were either positive (Wang et al 2018;Borst et al 2017;Yang et al 2019;Shahab et al 2018), negative (Kuppuswamy and Bayus 2013;Raab et al 2017), or with no impact (Petitjean 2017;Cordova et al 2015). These contradictory results indicate that the associations between goal setting, project comments, project updates and project success are more complicated than the results predicted by former/past empirical studies.…”