Geopolitical Risk and Crowdfunding Performance: The Moderating Effect of Social Influence
DOI:
https://doi.org/10.63385/jemm.v1i3.165Keywords:
Geopolitical Risk, Crowdfunding Performance, Social InfluenceAbstract
This paper empirically investigates the effect of geopolitical risk (GPR) on crowdfunding campaign performance in the context of the Russia-Ukraine conflict. Drawing on a dataset of 344 campaigns launched on the Kickstarter platform across eight countries that experienced substantial changes in GPR, we examine how heightened geopolitical uncertainty influences entrepreneurial financing outcomes. Specifically, we explore the moderating role of social influence, focusing on founder dynamism through social media activity and the intensity of stakeholder engagement measured by the number of comments exchanged. Employing logistic regression techniques and performance indicators such as campaign success, number of contributors, and funding rate, our analysis reveals that geopolitical tensions exert a significantly negative impact on crowdfunding performance. However, we find that proactive communication strategies and strong stakeholder interaction can mitigate these adverse effects, enabling campaigns to maintain momentum even in uncertain environments. The findings contribute to the growing literature on crowdfunding under external shocks by highlighting the importance of digital engagement in sustaining trust and participation. From a practical perspective, our results offer actionable insights for entrepreneurs, crowdfunding platforms, and policymakers. Strengthening digital visibility, encouraging interactive communication, and fostering community involvement emerge as effective tools to enhance campaign resilience under geopolitical disruptions.
References
[1]Yousaf, I., Patel, R., Yarovaya, L., 2022. The reaction of G20+ stock markets to the Russia-Ukraine conflict “black-swan” event: Evidence from event study approach. Journal of Behavioral and Experimental Finance. 35, 100723. DOI: https://doi.org/10.1016/j.jbef.2022.100723
[2]Igra, M., Kenworthy, N., Luchsinger, C., et al., 2021. Crowdfunding as a response to COVID-19: Increasing inequities at a time of crisis. Social Science & Medicine. 282, 114105. DOI: https://doi.org/10.1016/j.socscimed.2021.114105
[3]Kraus, S., Richter, C., Brem, A., et al., 2016. Strategies for reward-based crowdfunding campaigns. Journal of Innovation & Knowledge. 1(1), 13–23. DOI: https://doi.org/10.1016/j.jik.2016.01.010
[4]Cumming, D.J., Leboeuf, G., Schwienbacher, A., 2020. Crowdfunding models: Keep‐It‐All vs. All‐Or‐Nothing. Financial Management. 49(2), 331–360. DOI: https://doi.org/10.1111/fima.12262
[5]Zribi, S., 2022. Effects of social influence on crowdfunding performance: implications of the covid-19 pandemic. Humanities and Social Sciences Communications. 9(1), 192. DOI: https://doi.org/10.1057/s41599-022-01207-3
[6]Caldara, D., Iacoviello, M., 2022. Measuring Geopolitical Risk. American Economic Review. 112(4), 1194–1225. DOI: https://doi.org/10.1257/aer.20191823
[7]Blattman, C., Miguel, E., 2009. Civil War. SSRN Electronic Journal. DOI: https://doi.org/10.2139/ssrn.1392456
[8]Das, D., Kannadhasan, M., Bhattacharyya, M., 2019. Do the emerging stock markets react to international economic policy uncertainty, geopolitical risk and financial stress alike? The North American Journal of Economics and Finance. 48, 1–19. DOI: https://doi.org/10.1016/j.najef.2019.01.008
[9]Kannadhasan, M., Das, D., 2020. Do Asian emerging stock markets react to international economic policy uncertainty and geopolitical risk alike? A quantile regression approach. Finance Research Letters. 34, 101276. DOI: https://doi.org/10.1016/j.frl.2019.08.024
[10]Al Mamun, M., Uddin, G.S., Suleman, M.T., et al., 2020. Geopolitical risk, uncertainty and Bitcoin investment. Physica A: Statistical Mechanics and its Applications. 540, 123107. DOI: https://doi.org/10.1016/j.physa.2019.123107
[11] Zhang, Y., Tan, C.D., Sun, J., et al., 2020. Why do people patronize donation-based crowdfunding platforms? An activity perspective of critical success factors. Computers in Human Behavior. 112, 106470. DOI: https://doi.org/10.1016/j.chb.2020.106470
[12]Zheng, H., Li, D., Wu, J., et al., 2014. The role of multidimensional social capital in crowdfunding: A comparative study in China and US. Information & Management. 51(4), 488–496. DOI: https://doi.org/10.1016/j.im.2014.03.003
[13]Thies, F., Wessel, M., Benlian, A., 2016. Effects of Social Interaction Dynamics on Platforms. Journal of Management Information Systems. 33(3), 843–873. DOI: https://doi.org/10.1080/07421222.2016.1243967
[14]Bi, S., Liu, Z., Usman, K., 2017. The influence of online information on investing decisions of reward-based crowdfunding. Journal of Business Research. 71, 10–18. DOI: https://doi.org/10.1016/j.jbusres.2016.10.001
[15]Butticè, V., Franzoni, C., Rossi-Lamastra, C., et al., 2018. The Road to Crowdfunding Success: A Review of the Extant Literature. Oxford University Press: Oxford, UK. DOI: https://doi.org/10.1093/oso/9780198816225.003.0005
[16]Choy, K., Schlagwein, D., 2016. Crowdsourcing for a better world: On the relation between IT affordances and donor motivations in charitable crowdfunding. Information Technology & People. 29(1), 221–247. DOI: https://doi.org/10.1108/ITP-09-2014-0215
[17]Vulkan, N., Åstebro, T., Sierra, M.F., 2016. Equity crowdfunding: A new phenomena. Journal of Business Venturing Insights. 5, 37–49. DOI: https://doi.org/10.1016/j.jbvi.2016.02.001
[18]Lukkarinen, A., Teich, J.E., Wallenius, H., et al., 2016. Success drivers of online equity crowdfunding campaigns. Decision Support Systems. 87, 26–38. DOI: https://doi.org/10.1016/j.dss.2016.04.006
[19]Mollick, E., 2014. The dynamics of crowdfunding: An exploratory study. Journal of Business Venturing. 29(1), 1–16. DOI: https://doi.org/10.1016/j.jbusvent.2013.06.005
[20]Colombo, M.G., Meoli, M., Vismara, S., 2019. Signaling in science-based IPOs: The combined effect of affiliation with prestigious universities, underwriters, and venture capitalists. Journal of Business Venturing. 34(1), 141–177. DOI: https://doi.org/10.1016/j.jbusvent.2018.04.009
[21]Zribi, S., Khoufi, W., 2022. Signalling Strategy and Success of Crowdfunding Campaign. International Journal of Business and Society. 23(3), 1921–1938. DOI: https://doi.org/10.33736/ijbs.5220.2022
[22]Pyayt P, O., Allison, T.H., Sahaym, A., et al., 2019. User entrepreneurs’ multiple identities and crowdfunding performance: Effects through product innovativeness, perceived passion, and need similarity. Journal of Business Venturing. 34(5), 105895. DOI: https://doi.org/10.1016/j.jbusvent.2018.08.005
[23]Rose, S., Wentzel, D., Hopp, C., et al., 2021. Launching for success: The effects of psychological distance and mental simulation on funding decisions and crowdfunding performance. Journal of Business Venturing. 36(6), 106021. DOI: https://doi.org/10.1016/j.jbusvent.2020.106021
[24]Alsagr, N., Cumming, D.J., Davis, J.G., et al., 2023. Geopolitical risk and crowdfunding performance. Journal of International Financial Markets, Institutions and Money. 85, 101766. DOI: https://doi.org/10.1016/j.intfin.2023.101766
[25]Bade, M., Walther, M., 2021. Local preferences and the allocation of attention in equity-based crowdfunding. Review of Managerial Science. 15(8), 2501–2533. DOI: https://doi.org/10.1007/s11846-020-00429-6
[26]Anglin, A.H., Short, J.C., Drover, W., et al., 2018. The power of positivity? The influence of positive psychological capital language on crowdfunding performance. Journal of Business Venturing. 33(4), 470–492. DOI: https://doi.org/10.1016/j.jbusvent.2018.03.003
[27]Bollaert, H., Leboeuf, G., Schwienbacher, A., 2020. The narcissism of crowdfunding entrepreneurs. Small Business Economics. 55(1), 57–76. DOI: https://doi.org/10.1007/s11187-019-00145-w
[28]Davis, B.C., Warnick, B.J., Anglin, A.H., et al., 2021. Gender and Counterstereotypical Facial Expressions of Emotion in Crowdfunded Microlending. Entrepreneurship Theory and Practice. 45(6), 1339–1365. DOI: https://doi.org/10.1177/10422587211029770
[29]Di Pietro, F., Butticè, V., 2020. Institutional characteristics and the development of crowdfunding across countries. International Review of Financial Analysis. 71, 101543. DOI: https://doi.org/10.1016/j.irfa.2020.101543
[30]Fania, N., Yan, C., Kuyon, J.B., et al., 2020. Geopolitical Risks (GPRs) and Foreign Direct Investments: A Business Risk Approach. Global Journal of Management and Business Research. 1–8. DOI: https://doi.org/10.34257/GJMBRBVOL20IS1PG1
[31]Kotcharin, S., Maneenop, S., 2020. Geopolitical risk and shipping firms’ capital structure decisions in Belt and Road Initiative countries. International Journal of Logistics Research and Applications. 23(6), 544–560. DOI: https://doi.org/10.1080/13675567.2020.1766003
[32]Agrawal, A., Catalini, C., Goldfarb, A., 2011. The Geography of Crowdfunding (No. w16820). National Bureau of Economic Research, Cambridge, MA. DOI: https://doi.org/10.3386/w16820
[33]Danmayr, F., 2014. Archetypes of Crowdfunding Platforms: A Multidimensional Comparison. Springer: Wiesbaden, Germany. DOI: https://doi.org/10.1007/978-3-658-04559-3
[34]Spence, M., 1973. Job Market Signaling. The Quarterly Journal of Economics. 87(3), 355. DOI: https://doi.org/10.2307/1882010
[35]Connelly, B.L., Certo, S.T., Ireland, R.D., et al., 2011. Signaling Theory: A Review and Assessment. Journal of Management. 37(1), 39–67. DOI: https://doi.org/10.1177/0149206310388419
[36]Chakraborty, S., Swinney, R., 2021. Signaling to the Crowd: Private Quality Information and Rewards-Based Crowdfunding. Manufacturing & Service Operations Management. 23(1), 155–169. DOI: https://doi.org/10.1287/msom.2019.0833
[37]Block, J., Fisch, C., Hirsch, S., 2023. Social signals and crowdfunding: Evidence from founder activity and digital reputation. Entrepreneurship Theory and Practice. 47(4), 1235–1267.
[38]Zhang, X., Liu, X., Wang, X., et al., 2022. Exploring the effects of social capital on crowdfunding performance: A holistic analysis from the empirical and predictive views. Computers in Human Behavior. 126, 107011. DOI: https://doi.org/10.1016/j.chb.2021.107011
[39]Liu, Y., Chen, Y., Fan, Z.-P., 2021. Do social network crowds help fundraising campaigns? Effects of social influence on crowdfunding performance. Journal of Business Research. 122, 97–108. DOI: https://doi.org/10.1016/j.jbusres.2020.08.052
[40]DiMaggio, P.J., Powell, W.W., 1983. The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review. 48(2), 147. DOI: https://doi.org/10.2307/2095101
[41]Scott, W.R., 2014. Institutions and organizations: Ideas, interests, and identities, 4th ed. SAGE Publications: Thousand Oaks, CA, USA.
[42] Kim, Y.J., Hollingshead, A.B., 2015. Online Social Influence: Past, Present, and Future. Annals of the International Communication Association. 39(1), 163–192. DOI: https://doi.org/10.1080/23808985.2015.11679175
[43]Kelman, H.C., 1958. Compliance, identification, and internalization three processes of attitude change. Journal of Conflict Resolution. 2(1), 51–60. DOI: https://doi.org/10.1177/002200275800200106
[44]Deutsch, M., Gerard, H.B., 1955. A study of normative and informational social influences upon individual judgment. The Journal of Abnormal and Social Psychology. 51(3), 629–636. DOI: https://doi.org/10.1037/h0046408
[45]Chung, Y., Li, Y., Jia, J., 2021. Exploring embeddedness, centrality, and social influence on backer behavior: the role of backer networks in crowdfunding. Journal of the Academy of Marketing Science. 49(5), 925–946. DOI: https://doi.org/10.1007/s11747-021-00779-x
[46]Liu, Y., Chen, Y., Fan, Z.-P., 2021. Do social network crowds help fundraising campaigns? Effects of social influence on crowdfunding performance. Journal of Business Research. 122, 97–108. DOI: https://doi.org/10.1016/j.jbusres.2020.08.052
[47]Dellarocas, C., 2001. Analyzing the economic efficiency of eBay-like online reputation reporting mechanisms. In Proceedings of the 3rd ACM Conference on Electronic Commerce. Tampa. FL, USA, 14 October 2001; pp. 171–179. DOI: https://doi.org/10.1145/501158.501177
[48]Tang, C.S., Gu, B., Whinston, A.B., 2012. Content contribution for revenue sharing and reputation in online communities. MIS Quarterly. 36(1), 217–234. DOI: https://doi.org/10.2753/MIS0742-1222290203
[49]Ryu, S., 2024. Antecedents and Consequences of Relationship Motivation in Reward-Based Crowdfunding. Journal of Alternative Finance. 1(2), 173–193. DOI: https://doi.org/10.1177/27533743241259493
[50]Toubia, O., Stephen, A.T., 2011. Intrinsic versus Image-Related Motivations in Social Media: Why Do People Contribute Content to Twitter? Available from: https://business.columbia.edu/sites/default/files-efs/pubfiles/5613/Toubia_Stephen_twitter%20111711.pdf
[51]Tan, K.-C., Kannan, V.R., Handfield, R.B., 1998. Supply chain management: Supplier performance and firm performance. International Journal of Purchasing & Materials Management. 34(3), 2–9.
[52]Bakshy, E., Rosenn, I., Marlow, C., et al., 2012. The role of social networks in information diffusion. In Proceedings of the 21st International Conference on World Wide Web. Lyon, France, 16 April; pp. 519–528. DOI: https://doi.org/10.1145/2187836.2187907
[53]Coombs, W.T., 2015. Ongoing crisis communication: Planning, managing, and responding, 4th ed. SAGE Publications: Thousand Oaks, CA, USA.
[54]McKenny, A.F., Fisher, G., Short, J.C., et al., 2025. Communicating During Societal Crises: How Entrepreneurs’ Interactions with Backers Affect Fundraising via Crowdfunding. Entrepreneurship Theory and Practice. 49(3), 782–816. DOI: https://doi.org/10.1177/10422587241288124
[55]Ye, Y., He, J., He, Z., et al., 2023. Correction: Ye et al. Evaluation of the Brewing Characteristics, Digestion Profiles, and Neuroprotective Effects of Two Typical Se-Enriched Green Teas. Foods 2022, 11, 2159. Foods. 12(6), 1339. DOI: https://doi.org/10.3390/foods12061339
[56]Tafesse, W., 2021. Communicating crowdfunding campaigns: How message strategy, vivid media use and product type influence campaign success. Journal of Business Research. 127, 252–263. DOI: https://doi.org/10.1016/j.jbusres.2021.01.043
[57]Xu, B., Zheng, H., Xu, Y., et al., 2016. Configurational paths to sponsor satisfaction in crowdfunding. Journal of Business Research. 69(2), 915–927. DOI: https://doi.org/10.1016/j.jbusres.2015.06.040
[58]Block, J.H., Colombo, M.G., Cumming, D.J., et al., 2018. New players in entrepreneurial finance and why they are there. Small Business Economics. 50(2), 239–250. DOI: https://doi.org/10.1007/s11187-016-9826-6
[59]Wang, T., Zheng, H., et al., 2017. An empirical study of sponsor satisfaction in reward-based crowdfunding. Journal of Electronic Commerce Research. 18, 269–285.
[60]Courtney, C., Dutta, S., Li, Y., 2017. Resolving Information Asymmetry: Signaling, Endorsement, and Crowdfunding Success. Entrepreneurship Theory and Practice. 41(2), 265–290. DOI: https://doi.org/10.1111/etap.12267
[61]Vismara, S., 2018. Information Cascades among Investors in Equity Crowdfunding. Entrepreneurship Theory and Practice. 42(3), 467–497. DOI: https://doi.org/10.1111/etap.12261
[62]Kline, R.B., 2011. Principles and practice of structural equation modeling. Guilford Publications: New York ,NY, USA.
[63]Koch, J.A., Siering, M., 2015. Crowdfunding success factors: The characteristics of successfully funded projects on crowdfunding platforms. In Proceedings of the 2015 23rd European Conference on Information Systems (ECIS 2015). Muenster, Germany, 26–29 May 2015; pp.1–15.
[64]Barbi, M., Bigelli, M., 2017. Crowdfunding practices in and outside the US. Research in International Business and Finance. 42, 208–223. DOI: https://doi.org/10.1016/j.ribaf.2017.05.013
[65]Colombo, M.G., Franzoni, C., Rossi-Lamastra, C., 2015. Internal Social Capital and the Attraction of Early Contributions in Crowdfunding. Entrepreneurship Theory and Practice. 39(1), 75–100. DOI: https://doi.org/10.1111/etap.12118
[66]Cordova, A., Dolci, J., Gianfrate, G., 2015. The Determinants of Crowdfunding Success: Evidence from Technology Projects. Procedia-Social and Behavioral Sciences. 181, 115–124. DOI: https://doi.org/10.1016/j.sbspro.2015.04.872
[67]Yang, J., Li, Y., Calic, G., et al., 2020. How multimedia shape crowdfunding outcomes: The overshadowing effect of images and videos on text in campaign information. Journal of Business Research. 117, 6–18. DOI: https://doi.org/10.1016/j.jbusres.2020.05.008
Downloads
PDF
License
Copyright (c) 2025 Sirine Zribi
This work is licensed under a Creative Commons Attribution 4.0 International License.
