Abstract

The importance of social capital reach has been extensively demonstrated in several areas of entrepreneurship research such as startup performance and venture capital attraction. The present study draws on these findings by investigating the effect of social capital on the crowdfunding campaign performance. Online crowdfunding platforms provide features that can transfer previously unavailable social information between project creators and backers. This social information helps to offset the information asymmetry, which is one of the key challenges for crowdfunding platforms (Agrawal et al. 2015). However, recent research has produced inconsistent results regarding the effects of social capital on crowdfunding campaign performance: while Mollick (2014) and Colombo et al. (2015) report positive effects, Ahlers et al. (2015) find no evidence of social capital’s impact on campaign performance. Moreover, fundamental questions remain unanswered: what role does the composition of social capital play for campaign performance and what is the underlying mechanism of this effect? Drawing on the information signaling theory (Spence 1973), we analyze the effects of internal and external social capital and investigate the role of project popularity indicators as mediating factors in the causal chain between social capital and campaign performance.

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