Who benefits from the wisdom of the crowd in crowdfunding? Assessing the benefits of user-generated and mass personal electronic word of mouth in computer-mediated financing

Jermain Kaminski, Christian Hopp, Christian Lukas

Research output: Contribution to journalArticleAcademicpeer-review


In this work, we explore the link between electronic word of mouth in the form of user-generated content (online forum interactions on Kickstarter) and through mass personal communication (sharing information through Facebook) on the performance of crowdfunding campaigns. Our formal theoretical model implies that the efficiency of electronic word of mouth is determined by the quality of the underlying crowdfunding campaign. Using a sample of 572 project observations, we test our theoretical predictions in cross-sectional logistic regression and ancillary Granger analyses. Our results highlight the interactive contingency of social media engagement and the success of the crowdfunding campaign. While a higher quality campaign is benefitting from user generated electronic word of mouth (online comments), the returns are diminishing. For mass personal electronic word of mouth (Facebook shares), we even find a reverse causal effect. Social media activity follows a successful campaign, but does not affect the success probability of the campaign. Crowdfunding campaigns need to approach their social media activities with a certain note of sensitivity to achieve the objective of successfully reaching their campaign goal.
Original languageEnglish
Pages (from-to)1133-1162
Number of pages30
JournalJournal of Business Economics
Issue number9
Publication statusPublished - 5 Mar 2018
Externally publishedYes

JEL classifications

  • c31 - "Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models"
  • c32 - "Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models"
  • d91 - "Intertemporal Consumer Choice; Life Cycle Models and Saving"
  • g29 - Financial Institutions and Services: Other
  • h31 - Fiscal Policies and Behavior of Economic Agents: Household
  • l26 - Entrepreneurship


  • crowdfunding
  • social capital
  • entrepreneurial finance
  • electronic word of mouth

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