Abstract
We explore success drivers of reward-based crowdfunding for poverty alleviation in China. The results from our econometric modeling using data from 4375 reward-based crowdfunding campaigns suggest that poverty alleviation campaigns, as compared to ordinary ones, benefit from higher funded amounts, larger backer numbers, and greater success rates. The results also suggest that poverty alleviation campaigns perform better when the products sold originate from poorer (as compared to wealthier) regions and when price premiums are lower (as compared to higher). We corroborate important findings from the field study with an experimental study, showing that the consumer’s feeling of warm glow accounts for the positive effects of poverty alleviation campaigns (as compared to ordinary) campaigns. We expand the applications of warm-glow theory into the context of reward-based crowdfunding campaigns for poverty alleviation and offer new insights into success drivers of such campaigns.
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Data availability
All data included in this study are available upon request by contact with the corresponding author.
Notes
This funding is provided by the central government. In our survey, many low-income people agreed that local governments manage these funds and use them as seed capital for businesses.
Some surveys support our viewpoint. According to the 2020 Report of the Development of Crowdfunding of China, the original intentions in reward-based crowdfunding include quality, personalization, and convenience. The charitable motivation is not proactive even though many of these consumers may desire to purchase poverty alleviation commodities.
JD Crowdfunding was one of the largest reward-based crowdfunding platforms in China and active at the time of our study. It was established in 2014 and discontinued in late 2022.
The last-modified field indicates the first effective date of a webpage. As JD Crowdfunding disclosed no information on the time other than finish time, we use this as a proxy.
For the last-modified field identifying the initial time, there may be a few days between the real and observed time. We employ the unit of week to mitigate this problem.
JD Crowdfunding only displayed these relatively rough classifications. However, as we have controlled for many other factors, we believe the marginal effect of our independent variable can be correctly estimated (cf., Liu et al., 2021; Xiang et al., 2019). Meanwhile, we find the coefficients for the classifications are insignificant, suggesting that the classifications have little impact after controlling for other variables.
Detailed results are available from the corresponding author on request.
The provincial average terrain slope is evaluated by the Digital Elevation Model (DEM) and is based on the data for the highest and lowest altitudes per square kilometer of every region. The factors selected to calculate the yearly average climate comfortable day include heat, cold, wind, humidity, extreme weather, etc.
We conducted data from Credamo, one of the largest Chinese platforms providing online experiment and data services.
We greatly thank a reviewer for this insightful suggestion.
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Acknowledgements
We especially thank Prof. Boris Bartikowski (the editor) for the constructive and insightful suggestions. We also would like to thank the other editors, Smirti Kutaula, Alvina Gillani, Diana Gregory-Smith, and the anonymous reviewers for their valuable comments and suggestions, which have greatly improved this paper. We appreciate the helpful comments of Yun Liu, George Shan, Fan Yang, Yuan Wang, and seminar participants at the University of Western Australia, Massey University, and Shandong University. The Program of the National Social Science Foundation of China (No. 20BJY111) and the Major Program of the National Social Science Foundation of China (No. 21&ZD129) are gratefully acknowledged for their provision of support for this study.
Funding
This work was supported by The Program of the National Social Science Foundation of China [Grant Number 20BJY111] and the Major Program of the National Social Science Foundation of China [Grant Number 21&ZD129].
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Appendices
Appendix A: Example of a Poverty Alleviation Campaign
Figure
Case of the poverty alleviation campaign
4 shows the example of a poverty alleviation campaign (green tea campaign) that ran on the JD Crowdfunding platform. The main elements shown in this example translate as follows into English: (1) Title (Chinese words “poverty alleviation” in the blue box), (2) Funded amounts, (3) Success rate, (4) Backer numbers, (5) Finish time, (6) Funding goal, (7) Description (click to browse), (8) Discussions (click to browse), (9) Firm description and information (click to browse), (10) Total initiated campaigns of the firm, (11) Invested campaign numbers of the firm, (12) Investment portfolio (crowdfunding price), (13) Sponsor numbers, (14) Tags (the third tag is “poverty alleviation”).
Appendix B: Variable Specification and Summary Statistics
See Table
5.
Appendix C: Items and Factor Loadings of Warm Glow
We adopted four items from Hartmann and Apaolaza-Ibáñez (2012) and Hartmann et al. (2017) to measure Warm Glow. We used seven-point Likert-type scales with 1 = totally disagree and 7 = totally agree as scale anchors. Factor loadings appear in the parentheses.
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Question 1: Buying the crowdfunding products can make me satisfied because they can help those who need help. (loading = 0.848).
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Question 2: I am happy to enjoy the crowdfunding products because it means that I have contributed to social equity. (loading = 0.895).
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Question 3: Helping to promote social benefits, I feel pleased when buying the above crowdfunding products. (loading = 0.896).
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Question 4: Participating in the crowdfunding campaign makes me feel satisfied because it means that I give back to the society. (loading = 0.842).
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Xing, C., Zhang, Y. & Tripe, D. Ethical Consumers and Low-Income Sellers on China’s Reward-Based Crowdfunding Platforms: Are Poverty Alleviation Campaigns More Successful?. J Bus Ethics 191, 793–810 (2024). https://doi.org/10.1007/s10551-024-05666-3
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DOI: https://doi.org/10.1007/s10551-024-05666-3