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Textual sentiment analysis and description characteristics in crowdfunding success: The case of cybersecurity and IoT industries

Author

Listed:
  • Abraham Yosipof

    (College of Law and Business
    International Institute for Applied Systems Analysis)

  • Netanel Drori

    (Northeastern University)

  • Or Elroy

    (College of Law and Business
    University of Oregon)

  • Yannis Pierraki

    (Universitat Internacional de Catalunya)

Abstract

Crowdfunding platforms offer entrepreneurs the opportunity to evaluate their technologies, validate their market, and raise funding. Such platforms also provide technologies with an opportunity to rapidly transition from research to market, which is especially crucial in fast-changing industries. In this study, we investigated how the sentiments expressed in the text of the project campaigns and project characteristics influence the success of crowdfunding in innovative industries such as cybersecurity and the Internet of Things (IoT). We examined 657 cybersecurity and Internet of Things (IoT) projects between 2010 and 2020 that were promoted on Kickstarter and IndieGoGo, two rewards-based crowdfunding platforms. We extracted technological topic attributes that may influence project success and measured the sentiments of project descriptions using a Valence Aware Dictionary and sEntiment Reasoner (VADER) model. We found that the sentiment of the description and the textual topic characteristics are associated with the success of funding campaigns for cybersecurity and IoT projects.

Suggested Citation

  • Abraham Yosipof & Netanel Drori & Or Elroy & Yannis Pierraki, 2024. "Textual sentiment analysis and description characteristics in crowdfunding success: The case of cybersecurity and IoT industries," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-14, December.
    • Handle: RePEc:spr:elmark:v:34:y:2024:i:1:d:10.1007_s12525-024-00712-4
    DOI: 10.1007/s12525-024-00712-4
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    More about this item

    Keywords

    Crowdfunding; Cybersecurity; Internet of Things; IoT; Sentiment analysis;
    All these keywords.

    JEL classification:

    • D26 - Microeconomics - - Production and Organizations - - - Crowd-Based Firms
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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