IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v95y2024i3p783-813.html
   My bibliography  Save this article

The effect of signaling on crowdfunding performance on social economy organizations in South Korea

Author

Listed:
  • Sun Hee Lee
  • Sang‐Youn Lee

Abstract

Crowdfunding is an innovative means of financing entrepreneurial initiatives. This study explores the effect of signaling on the crowdfunding performance of social economy organizations (SEOs) in South Korea. Analyzing 677 reward‐based crowdfunding projects by SEOs, we found that signaling social purpose, economic purpose, and organizational information were likely to be related to performance. In addition, signals reflecting an isomorphism akin to that of SEOs' identity were also positively correlated with crowdfunding performance. These findings contribute to the literature by offering insights about the effect of signals of SEOs on crowdfunding and demonstrating that fundraiser characteristics may influence crowdfunding performance.

Suggested Citation

  • Sun Hee Lee & Sang‐Youn Lee, 2024. "The effect of signaling on crowdfunding performance on social economy organizations in South Korea," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(3), pages 783-813, September.
    • Handle: RePEc:bla:annpce:v:95:y:2024:i:3:p:783-813
    DOI: 10.1111/apce.12460
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/apce.12460
    Download Restriction: no
    File URL: https://libkey.io/10.1111/apce.12460?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sahaym, Arvin & (Avi) Datta, Avimanyu & Brooks, Stoney, 2021. "Crowdfunding success through social media: Going beyond entrepreneurial orientation in the context of small and medium-sized enterprises," Journal of Business Research, Elsevier, vol. 125(C), pages 483-494.
    2. Thomas H. Allison & Blakley C. Davis & Jeremy C. Short & Justin W. Webb, 2015. "Crowdfunding in a Prosocial Microlending Environment: Examining the Role of Intrinsic versus Extrinsic Cues," Entrepreneurship Theory and Practice, , vol. 39(1), pages 53-73, January.
    3. Morgan Ward & Joseph Goodman & Julie Irwin, 2014. "The same old song: The power of familiarity in music choice," Marketing Letters, Springer, vol. 25(1), pages 1-11, March.
    4. Yan Zhang & Margarethe F. Wiersema, 2009. "Stock market reaction to CEO certification: the signaling role of CEO background," Strategic Management Journal, Wiley Blackwell, vol. 30(7), pages 693-710, July.
    5. Norbert Steigenberger & Hendrik Wilhelm, 2018. "Extending Signaling Theory to Rhetorical Signals: Evidence from Crowdfunding," Organization Science, INFORMS, vol. 29(3), pages 529-546, June.
    6. Bi, Sheng & Liu, Zhiying & Usman, Khalid, 2017. "The influence of online information on investing decisions of reward-based crowdfunding," Journal of Business Research, Elsevier, vol. 71(C), pages 10-18.
    7. Tafesse, Wondwesen, 2021. "Communicating crowdfunding campaigns: How message strategy, vivid media use and product type influence campaign success," Journal of Business Research, Elsevier, vol. 127(C), pages 252-263.
    8. repec:hal:journl:hal-04287908 is not listed on IDEAS
    9. Wilbur Chung & Arturs Kalnins, 2001. "Agglomeration effects and performance: a test of the Texas lodging industry," Strategic Management Journal, Wiley Blackwell, vol. 22(10), pages 969-988, October.
    10. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    11. Stephen J. Perkins & Chris Hendry, 2005. "Ordering Top Pay: Interpreting the Signals," Journal of Management Studies, Wiley Blackwell, vol. 42(7), pages 1443-1468, November.
    12. Casper Hendrik Claassen & Eric Bidet & Junki Kim, 2023. "South Korean social enterprises and their networks: On their organizational linkages at the interstice between the third, public, and corporate sectors," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 365-397, June.
    13. Chan, Ho Fai & Moy, Naomi & Schaffner, Markus & Torgler, Benno, 2021. "The effects of money saliency and sustainability orientation on reward based crowdfunding success," Journal of Business Research, Elsevier, vol. 125(C), pages 443-455.
    14. Anton Miglo, 2020. "Crowdfunding in a Competitive Environment," JRFM, MDPI, vol. 13(3), pages 1-38, February.
    15. Ambika Zutshi & Andrew Creed & Brian L. Connelly, 2018. "Education for Sustainable Development: Emerging Themes from Adopters of a Declaration," Sustainability, MDPI, vol. 11(1), pages 1-15, December.
    16. Jen-Wen Chang, 2020. "The Economics of Crowdfunding," American Economic Journal: Microeconomics, American Economic Association, vol. 12(2), pages 257-280, May.
    17. Michael Marcin Kunz & Ulrich Bretschneider & Max Erler & Jan Marco Leimeister, 2017. "An empirical investigation of signaling in reward-based crowdfunding," Electronic Commerce Research, Springer, vol. 17(3), pages 425-461, September.
    18. Liu, Yang & Chen, Yuan & Fan, Zhi-Ping, 2021. "Do social network crowds help fundraising campaigns? Effects of social influence on crowdfunding performance," Journal of Business Research, Elsevier, vol. 122(C), pages 97-108.
    19. Gilles Chemla & Katrin Tinn, 2020. "Learning Through Crowdfunding," Management Science, INFORMS, vol. 66(5), pages 1783-1801, May.
    20. Ciro Troise & Mario Tani & Ornella Papaluca, 2020. "Equity and Reward Crowdfunding: A Multiple Signal Analysis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(3), pages 1-30, March.
    21. Yang, Jialiang & Li, Yaokuang & Calic, Goran & Shevchenko, Anton, 2020. "How multimedia shape crowdfunding outcomes: The overshadowing effect of images and videos on text in campaign information," Journal of Business Research, Elsevier, vol. 117(C), pages 6-18.
    22. Joseph E. Stiglitz, 2002. "Information and the Change in the Paradigm in Economics," American Economic Review, American Economic Association, vol. 92(3), pages 460-501, June.
    23. S.A. Jaja & J.M.O. Gabriel & C.C. Wobodo, 2019. "Organizational Isomorphism: The Quest For Survival," Noble International Journal of Business and Management Research, Noble Academic Publsiher, vol. 3(5), pages 86-94, May.
    24. Joern H. Block & Alexander Groh & Lars Hornuf & Tom Vanacker & Silvio Vismara, 2021. "The entrepreneurial finance markets of the future: a comparison of crowdfunding and initial coin offerings," Small Business Economics, Springer, vol. 57(2), pages 865-882, August.
    25. Christopher Courtney & Supradeep Dutta & Yong Li, 2017. "Resolving Information Asymmetry: Signaling, Endorsement, and Crowdfunding Success," Entrepreneurship Theory and Practice, , vol. 41(2), pages 265-290, March.
    26. Jermain C. Kaminski & Christian Hopp, 2020. "Predicting outcomes in crowdfunding campaigns with textual, visual, and linguistic signals," Small Business Economics, Springer, vol. 55(3), pages 627-649, October.
    27. Joern H. Block & Massimo G. Colombo & Douglas J. Cumming & Silvio Vismara, 2018. "New players in entrepreneurial finance and why they are there," Small Business Economics, Springer, vol. 50(2), pages 239-250, February.
    28. Li, Yuanqing & Sui, Sui & Wu, Sibin, 2022. "The effect of gender fit on crowdfunding success," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    29. Farhoud, Mohamed & Shah, Sheeza & Stenholm, Pekka & Kibler, Ewald & Renko, Maija & Terjesen, Siri, 2021. "Social enterprise crowdfunding in an acute crisis," Journal of Business Venturing Insights, Elsevier, vol. 15(C).
    30. Soudipta Chakraborty & Robert Swinney, 2021. "Signaling to the Crowd: Private Quality Information and Rewards-Based Crowdfunding," Manufacturing & Service Operations Management, INFORMS, vol. 23(1), pages 155-169, 1-2.
    31. Anna Lamin & Srilata Zaheer, 2012. "Wall Street vs. Main Street: Firm Strategies for Defending Legitimacy and Their Impact on Different Stakeholders," Organization Science, INFORMS, vol. 23(1), pages 47-66, February.
    32. Silvio Vismara, 2016. "Equity retention and social network theory in equity crowdfunding," Small Business Economics, Springer, vol. 46(4), pages 579-590, April.
    33. Volodymyr Babich & Simone Marinesi & Gerry Tsoukalas, 2021. "Does Crowdfunding Benefit Entrepreneurs and Venture Capital Investors?," Manufacturing & Service Operations Management, INFORMS, vol. 23(2), pages 508-524, March.
    34. Chang Gue Lim & Sang‐Youn Lee & Jinseon Seo, 2020. "The signaling effect of ambidexterity of social enterprises on acquiring financial resources in South Korea," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(4), pages 633-647, December.
    35. Moradi, Masoud & Badrinarayanan, Vishag, 2021. "The effects of brand prominence and narrative features on crowdfunding success for entrepreneurial aftermarket enterprises," Journal of Business Research, Elsevier, vol. 124(C), pages 286-298.
    36. Richard H. Lester & S. Trevis Certo & Catherine M. Dalton & Dan R. Dalton & Albert A. Cannella, 2006. "Initial Public Offering Investor Valuations: An Examination of Top Management Team Prestige and Environmental Uncertainty," Journal of Small Business Management, Taylor & Francis Journals, vol. 44(1), pages 1-26, January.
    37. Tae Hyung Kim & M. Jae Moon, 2017. "Using Social Enterprises for Social Policy in South Korea: Do Funding and Management Affect Social and Economic Performance?," Public Administration & Development, Blackwell Publishing, vol. 37(1), pages 15-27, February.
    38. Donald D. Bergh & Patrick Gibbons, 2011. "The Stock Market Reaction to the Hiring of Management Consultants: A Signalling Theory Approach," Journal of Management Studies, Wiley Blackwell, vol. 48(3), pages 544-567, May.
    39. Boyd D. Cohen & Thomas J. Dean, 2005. "Information asymmetry and investor valuation of IPOs: top management team legitimacy as a capital market signal," Strategic Management Journal, Wiley Blackwell, vol. 26(7), pages 683-690, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Veronica Crescenzo & Angelo Bonfanti & Paola Castellani & Alfonso Vargas-Sánchez, 2022. "Effective entrepreneurial narrative design in reward crowdfunding campaigns for social ventures," International Entrepreneurship and Management Journal, Springer, vol. 18(2), pages 773-800, June.
    2. Francesco Cappa & Michele Pinelli & Riccardo Maiolini & Maria Isabella Leone, 2021. "“Pledge” me your ears! The role of narratives and narrator experience in explaining crowdfunding success," Small Business Economics, Springer, vol. 57(2), pages 953-973, August.
    3. Elrashidy, Zeinab & Haniffa, Roszaini & Sherif, Mohamed & Baroudi, Sarra, 2024. "Determinants of reward crowdfunding success: Evidence from Covid-19 pandemic," Technovation, Elsevier, vol. 132(C).
    4. Taj, Saud A., 2016. "Application of signaling theory in management research: Addressing major gaps in theory," European Management Journal, Elsevier, vol. 34(4), pages 338-348.
    5. Xu, Yang & Zhou, Qiang & Wang, Xu, 2023. "Joint price and quality optimization strategy in crowdfunding campaign," International Journal of Production Economics, Elsevier, vol. 263(C).
    6. Sewaid, Ahmed & Garcia-Cestona, Miguel & Silaghi, Florina, 2021. "Resolving information asymmetries in financing new product development: The case of reward-based crowdfunding," Research Policy, Elsevier, vol. 50(10).
    7. Janina Sundermeier & Tyge-F. Kummer, 2022. "Does personality still matter in e-commerce? How perceived hubris influences the assessment of founders’ trustworthiness using the example of reward-based crowdfunding," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1127-1144, September.
    8. Shuangfa Huang & David Pickernell & Martina Battisti & Thang Nguyen, 2022. "Signalling entrepreneurs’ credibility and project quality for crowdfunding success: cases from the Kickstarter and Indiegogo environments," Small Business Economics, Springer, vol. 58(4), pages 1801-1821, April.
    9. Jiao, Hao & Wang, Lindong & Yang, Jifeng, 2023. "Standing head and shoulders above others? Complementor experience-based design and crowdfunding success on digital platforms," Technovation, Elsevier, vol. 128(C).
    10. Zhu, Zujun & Huang, Qian & Liu, Hefu, 2023. "How heuristic cues impact crowdfunding performance: The moderating role of platform competition intensity and platform demand potential," Journal of Business Research, Elsevier, vol. 160(C).
    11. Yasar, Burze & Sevilay Yılmaz, Işıl & Hatipoğlu, Nurullah & Salih, Aslıhan, 2022. "Stretching the success in reward-based crowdfunding," Journal of Business Research, Elsevier, vol. 152(C), pages 205-220.
    12. Julian Bafera & Simon Kleinert, 2023. "Signaling Theory in Entrepreneurship Research: A Systematic Review and Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2419-2464, November.
    13. Jung, Eunjun & Lee, Changjun & Hwang, Junseok, 2022. "Effective strategies to attract crowdfunding investment based on the novelty of business ideas," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    14. Maurer, Joshua D. & Creek, Steven A. & Allison, Thomas H. & Bendickson, Joshua S. & Sahaym, Arvin, 2023. "Affiliation rhetoric and digital orientation in crowdfunding appeals," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    15. Xiaohong Huang & Rezaul Kabir & Thuy Ngoc Nguyen, 2024. "Do project quality and founder information signals always matter? Evidence from equity and reward crowdfunding," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3309-3325, July.
    16. Scheaf, David J. & Davis, Blakley C. & Webb, Justin W. & Coombs, Joseph E. & Borns, Jared & Holloway, Garrett, 2018. "Signals' flexibility and interaction with visual cues: Insights from crowdfunding," Journal of Business Venturing, Elsevier, vol. 33(6), pages 720-741.
    17. Atthaphon Mumi & Michael Obal & Yi Yang, 2019. "Investigating social media as a firm’s signaling strategy through an IPO," Small Business Economics, Springer, vol. 53(3), pages 631-645, October.
    18. Sirine Zribi, 2022. "Effects of social influence on crowdfunding performance: implications of the covid-19 pandemic," Palgrave Communications, Palgrave Macmillan, vol. 9(1), pages 1-8, December.
    19. Maiolini, Riccardo & Cappa, Francesco & Franco, Stefano & Quaratino, Giovanni Raimondo, 2024. "The impact of sustainable development goals in lending-based prosocial crowdfunding: A topic modeling analysis on the kiva platform," International Review of Financial Analysis, Elsevier, vol. 95(PB).
    20. Donald D. Bergh & Brian L. Connelly & David J. Ketchen Jr & Lu M. Shannon, 2014. "Signalling Theory and Equilibrium in Strategic Management Research: An Assessment and a Research Agenda," Journal of Management Studies, Wiley Blackwell, vol. 51(8), pages 1334-1360, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:95:y:2024:i:3:p:783-813. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.