Funding Decisions and the Role of Trust : A Qualitative Study of Reward-Based Crowdfunding in the Creative Industries

Cavalcanti Junqueira, M. Isabella and Soetanto, Danny (2022) Funding Decisions and the Role of Trust : A Qualitative Study of Reward-Based Crowdfunding in the Creative Industries. Management Decision, 60 (8). pp. 2174-2194. ISSN 0025-1747

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Abstract

Purpose –The purpose of this paper is to investigate funders’ decisions in supporting Reward-Based Crowdfunding (RBCF) in the creative industries by providing insights into the role of trust in the decision-making process of funders. In doing so, we examine how trust is developed through online interaction. Design/Methodology/Approach – Data was collected from interviews and participation at short-term immersive events and gatherings. In addition, data was gathered from online discussions and social media platforms related to RBCF campaign. Qualitative analysis was performed to offer a deeper understanding of funder decision-making processes. Findings – New insights were revealed in funder decision-making processes. Using foraging practices, funders participating in RBCF campaigns build trust before framing their final funding judgments. Our findings highlight the interplay of organizational competency with previously uncharted relational dimensions associated with funder decision-making processes. We also revealed how nascent and experienced funders differ in their evaluation of risk. Originality – This study offers an understanding of funder decision-making processes in creative RBCF campaigns. Their support of RBCF campaigns in the creative industries can present some potential risks. Further investigation is still required to reveal the funder’s decision-making process. By looking at the roles of trust, we provide a conceptualization of competence and the relational dimension of trust, and how trust is developed as a means for mitigating risk.