Success Factors of Reward-Based Crowdfunding Projects: Evidence from China

The rapid evolution of digital technologies has significantly transformed fundraising methods, particularly through online crowdfunding platforms. Despite the growing prevalence of crowdfunding, the specific factors contributing to the success of reward-based crowdfunding campaigns remain underexplored, particularly within the Chinese context. This gap persists because much of the existing research relies on data from Kickstarter, one of the world's largest crowdfunding platform predominantly used by Western initiators. This thesis investigates the determinants of successful fundraising on China's prominent integrated crowdfunding platform, Modian (摩点), analyzing data from 9,365 projects initiated between January 2019 and January 2024. The study focuses on the impact of project quality signals, such as update frequency, number of images, video embeddedness, delivery time, and reward tiers. Theoretical framework of the research suggest the applicability of signaling theory and signals from e-commerce literature to reward-based crowdfunding industry in China, since reward-based crowdfunding and e-commerce are often considered as synonyms, because have similarities in their operation styles. And especially in the context of China scholars mention those similarities while investigating the nature of crowdfunding in China and success factors. Employing the signal from e-commerce literature and utilizing regression analysis, this thesis provides with valuable insights. The findings contribute to the literature on both crowdfunding and e-commerce, demonstrating the relevance of e-commerce quality signals to the Chinese reward-based crowdfunding market. Besides confirming the applicability of already investigated signals, the findings also emphasize that signals which are significant in the Western crowdfunding platforms (Kickstarter in particular), don't contribute to crowdfunding success in China (in case of video embeddedness). Also employing choice overload theory this study gains insights regarding reward tiers provided within a crowdfunding campaign –– they don't have a linear dependency with crowdfunding success, thus confirming the theory regarding that too many options could have negative impact on purchase activity of backers. The results offer practical implications for project initiators, suggesting that employing these signals while building their strategies are essential for improving campaign performance. By providing empirical evidence from an underexplored market, this research enhances understanding of the factors driving crowdfunding success in China, offering valuable insights for both researchers and practitioners.