Institutional background in crowdfunding: trust, signals, and backers’ decisions
Shrestha, Prabal Thewissen, James
Shrestha, Prabal
Thewissen, James
Publication Type
Journal article with impact factor
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Publication Year
2026-04-15
Journal
Small Business Economics
Book
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Publication Begin page
1
Publication End page
50
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Abstract
We propose that institutional backgrounds derived from the project location and the entrepreneur’s country-of-origin act as heuristic cues that facilitate swift trust judgment and, therefore, influence international digital exchange decisions. Using a dataset of 101,583 Kickstarter campaigns, we find that stronger institutional environments linked to the project and the entrepreneur positively affect backers’ participation. Moreover, the two institutional cues can compensate for one another. We also show that stronger institutional background of the project (yet not the entrepreneur) enhances low-cost signals’ credibility; and in the presence of some high-cost signals, institutional background (of the entrepreneur in particular) is less consequential.
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Keywords
35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour