Paper Type
Short
Paper Number
1367
Description
In crowdfunding, the practice of adopting stretch goals, goals which are added on top of the primary target, to attract more contribution has received a lot of attention from scholars. However, prior research focus has been strictly on how stretch goal adoption affect projects’ individual success. In this study, we examine the broader impact on other projects. We propose that prior successful projects may influence subsequent projects in two possible ways: positively because they attract new backers or negatively because they absorb the resources of existing backers. Using data from a crowdfunding platform in East Asia, we find that unicorn successes (projects that reach all their stretch goals) have a positive effect while standard successes (successful projects with no stretch goals) have a negative effect. We conduct additional analyses to further verify our proposed mechanisms. Our study has the potential to offer important contribution to the crowdfunding literature.
Recommended Citation
Sindihebura, Tanguy Tresor; Pu, Xiaodie; Kuo, Vincent; and Chen, Jin, "Not All Success Is Created Equal: The Distinguishing Role of Stretch Goals on the Spillover Effects of Prior Successes" (2024). PACIS 2024 Proceedings. 5.
https://aisel.aisnet.org/pacis2024/track16_shareecon/track16_shareecon/5
Not All Success Is Created Equal: The Distinguishing Role of Stretch Goals on the Spillover Effects of Prior Successes
In crowdfunding, the practice of adopting stretch goals, goals which are added on top of the primary target, to attract more contribution has received a lot of attention from scholars. However, prior research focus has been strictly on how stretch goal adoption affect projects’ individual success. In this study, we examine the broader impact on other projects. We propose that prior successful projects may influence subsequent projects in two possible ways: positively because they attract new backers or negatively because they absorb the resources of existing backers. Using data from a crowdfunding platform in East Asia, we find that unicorn successes (projects that reach all their stretch goals) have a positive effect while standard successes (successful projects with no stretch goals) have a negative effect. We conduct additional analyses to further verify our proposed mechanisms. Our study has the potential to offer important contribution to the crowdfunding literature.
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