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Thirty days are enough: what determines the crowd's cash time in agri-food crowdfunding?

Author

Listed:
  • Yaokuang Li
  • Junjuan Du
  • Weizhong Fu

Abstract

Purpose - The purpose of this paper is to investigate the factors influencing quick cash by crowd in agri-food crowdfunding campaigns; this paper utilizes prospect theory to analyze the value and weighting functions of the crowd's cash. Design/methodology/approach - Using samples of crowdfunding campaigns launched in the Zhongchou (www.Zhongchou.cn) platform's agriculture and food category, this paper employs a multivariate linear regression model to investigate factors that motivate the crowd to make quick investment decisions. Findings - The results demonstrate that lowering the investment threshold, improving publicity, and increasing the benefits of a campaign can increase the decision weight assigned to a campaign, thereby motivating the crowd to make quick investment decisions. Improving the product's reputation, enhancing campaign promotion, and diversifying the reward scheme can increase the crowd's expected value of the campaign – another motivation for a quicker cash decision. Practical implications - This paper can help initiators, platforms and regulators better fulfil their roles in promoting the rapid, healthy development of crowdfunding in the agri-food industry, especially in the context of the Chinese launch of significant initiatives to develop crowdfunding aimed at rural e-commerce and poverty alleviation. Originality/value - This paper extends the behavioral finance concept of prospect theory to agri-food crowdfunding campaigns and investigates factors that motivate the crowd to make quick investment decisions. Additionally, this paper demonstrates that the backers of crowdfunding are not perfectly rational and can be motivated to invest by increasing mean decision weight and expected value of a campaign.

Suggested Citation

  • Yaokuang Li & Junjuan Du & Weizhong Fu, 2020. "Thirty days are enough: what determines the crowd's cash time in agri-food crowdfunding?," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 12(3), pages 553-575, July.
    • Handle: RePEc:eme:caerpp:caer-10-2019-0176
    DOI: 10.1108/CAER-10-2019-0176
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    Citations

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    Cited by:

    1. Junjuan Du, 2023. "Impact of project information disclosure on backers' investment intensity in reward-based crowdfunding: Evidence from agri-food crowdfunding in China," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(11), pages 427-435.
    2. Junjuan Du, 2022. "Project Attribute Information and Initiator’s Commitment in Crowdfunding Message Strategy: An Empirical Investigation of Financing Performance in Agri-Food Crowdfunding," Sustainability, MDPI, vol. 14(19), pages 1-18, October.
    3. Yalin Wang & Yaokuang Li & Juan Wu & Li Ling & Dan Long, 2023. "Does digitalization sufficiently empower female entrepreneurs? Evidence from their online gender identities and crowdfunding performance," Small Business Economics, Springer, vol. 61(1), pages 325-348, June.
    4. Junjuan Du, . "Impact of project information disclosure on backers' investment intensity in reward-based crowdfunding: Evidence from agri-food crowdfunding in China," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 0.
    5. Troise, Ciro & Tani, Mario & Dinsmore, John & Schiuma, Giovanni, 2021. "Understanding the implications of equity crowdfunding on sustainability-oriented innovation and changes in agri-food systems: Insights into an open innovation approach," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    6. Junjuan Du, 2023. "Rational or Impulsive? Early Backers’ Investment Behavior in Agri-Food Crowdfunding from 4P–4C Perspectives," SAGE Open, , vol. 13(3), pages 21582440231, August.

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