Chinese-Style Of Reward-Based Crowd-Funding: Financial Approaches Or Marketing Tools?

Authors

Huaxin Wang, The University of Suwon, South Korea, Shandong Institute of Commerce and Technology, ChinaFollow
Taekyung Kim, Department of Business Administration, The University of Suwon, South KoreaFollow

Document Type

Article

Abstract

Crowd-funding is an emerging industry in China. However, Chinese crowd-funding market has some different characteristics to its US-based or Europe-based predecessors. Some of Chinese founders regard reward-based crowd-funding as a funding approach, while others highlight its marketing functions. Thus, which play more important role at present? This paper investigates the reason for the special performance of reward-based crowd-funding in China from multiple perspectives. The results indicate that the special institutional environments of China---lack of perfect social credit systems and legal systems, not granting legal definition and status for crowd-funding, leads to an inevitable result that Chinese founders make heavy use of the marketing functions of crowd-funding but make light use of the funding function at the present stage. With the perfecting of the institutional and legal environment, many small-and-medium-enterprises and individual entrepreneurs are expected to pay more attention on the funding function of crowd-funding than today.

Recommended Citation

Wang, Huaxin and Kim, Taekyung, "Chinese-Style Of Reward-Based Crowd-Funding: Financial Approaches Or Marketing Tools?" (2015). ICEB 2015 Proceedings (Hong Kong, SAR China). 61.
https://aisel.aisnet.org/iceb2015/61