Authors: Maria Andreadaki, Evangelos Manouvelos

Title: Crowdfunding: Online funding dynamics in times of economic crisis

Abstract

A range of factors is likely to affect individuals’ intention to seek financing or borrowing for their needs through online choices such as crowdfunding as opposed to the 'traditional' choice of bank lending. If this intention is combined with periods of economic crisis, where bank credit is limited, crowdfunding may become the reliable alternative to bank lending if certain requirements are met.

The current empirical research identifies the combination of factors that set the trend for a positive effect in people’s intentions to prefer crowdfunding in times of economic crisis.  Online and in-hand questionnaires were provided to people in Greece, who recently experienced the economic crisis and two (2) dichotomous questions were used in order to end up with the proper sample having the knowledge of crowdfunding and of economic crisis’ bad effects. Hypotheses were set according to relevant literature on factors affecting crowdfunding and relevant variables were tested via inter-item correlations, ordinal regression analysis and mediation tests.

Findings show that crowdfunding platform appeal and social media factors are vital to consider crowdfunding a serious alternative to the banking system in times of economic crisis but also independently of it. Moreover, the economic impact of a crowdfunding project, trust and the intangible and tangible rewards provided seem to become also important to consider crowdfunding a serious alternative to the banking system in times of economic crisis.