Operational Transparency on Crowdfunding Platforms: Effect on Donations for Emergency Response

By Jorge Mejia, Gloria Urrea, Alfonso Pedraza‐Martinez. Production and operations management, 2019

126 citations recorded by the source corpus.

Online crowdfunding has emerged as a powerful tool to raise funds for emergency response. Crowdfunding campaigns can use two transparency tools to attract donors: updates and certification. Updates are additional messages that the organizer issues after launching the campaign and are a form of operational transparency when they communicate the campaign’s work to donors. Alternatively, certification is a form of conventional transparency that ensures the campaign truly benefits a charitable purpose. Using an econometric analysis, we investigate the effects of transparency on donations. We study the direction of causality and mechanisms behind work‐related updates by conducting an experiment. Results from the econometric analysis using over 100,000 campaigns benefiting victims of emergencies reveal that both updates and certification have positive effects on donations. Each additional work‐related word in an update (operational transparency) increases donations on average by $65 per month, while certification (conventional transparency) raises funds on average by $22 per month. Results from the experiment confirm the direction of causality; posting work‐related updates in crowdfunding campaigns increases donations. Two mechanisms explain this effect: donors’ enhanced perceptions of effort and perceptions of trust.

Subfields: Economics and Econometrics, Management Information Systems, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/7ad1710e7bb3399f46dec0cc8282d76521dd3f77

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In Economics and Econometrics

  1. F. Polzin
  2. Wanxiang Cai
  3. E. Stam
  4. E. Malecki
  5. Andrew H. Van de Ven
  6. Ron A. Boschma
  7. Koen Frenken
  8. David B. Audretsch

In Management Information Systems

  1. F. Polzin
  2. Wanxiang Cai
  3. E. Stam

In Management of Technology and Innovation

  1. F. Polzin
  2. E. Stam
  3. E. Malecki
  4. Andrew H. Van de Ven
  5. Ron A. Boschma
  6. David B. Audretsch
  7. N. Bosma
  8. Maksim Belitski

Citations in the corpus