Social Ties among Fundraisers and Crowdfunding Performance: The Impact of Tie Strength and Network Closure

ABSTRACT

This study examines how the strength of social ties between focal and peer fundraisers interacts with the network structure generated by these social ties to determine crowdfunding performance. With relationship intensity and preference similarity between focal and peer fundraisers as the two dimensions of tie strength, our study discloses how the benefits and costs associated with these tie strength dimensions are affected by network closure, the degree to which peer fundraisers are connected to each other. Our estimation results indicate that (1) relationship intensity and preference similarity exhibit inverted U-shaped relationships with crowdfunding performance, and (2) network closure attenuates the effectiveness of tie strength dimensions. Together, our study findings reveal an important interplay between indirect and direct social ties. In essence, social ties among peer fundraisers facilitate a group identity that reduces the returns of time and resources a fundraiser spends on strengthening ties with these peer fundraisers.

KEYWORDS:

• Social Ties
• Tie Strength
• Network Closure
• Fundraiser Networks
• Crowdfunding Performance
• Online Fundraising
• Social Networks

Disclosure statement

No potential conflicts of interest are reported by the authors(s).

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/07421222.2023.2301174.

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

^1. We follow Colombo et al.’s [16] external vs. internal social network dichotomy to differentiate a fundraiser’s social network outside the crowdfunding community (i.e., external social network) from his or her social network within the community (i.e., internal social network). Specifically, an external social network consists of a fundraiser’s family members and friends he or she establishes outside the crowdfunding community. An internal social network consists of social contacts (i.e., peer fundraisers) a fundraiser establishes within the crowdfunding community.

^2. A fundraiser’s internal social network refers to his or her egocentric network, which consists of the focal fundraiser (i.e., ego), peer fundraisers (i.e., alters) to whom the focal fundraiser is directly connected to and the interconnections among the peer fundraisers.

Additional information

Notes on contributors

Ta-Wei (Daniel) Kao

Ta-Wei (Daniel) Kao is an Assistant Professor of Operations Management at the University of Michigan-Dearborn. He received his Ph.D. from the State University of New York at Buffalo. His research interests include digital platforms, social networks, and efficiency analysis. Dr. Kao’s academic works have appeared in Journal of Management Information Systems, Journal of Business Logistics, International Journal of Operations & Production Management, European Journal of Operational Research, International Journal of Production Economics and other journals. He received a Best Interdisciplinary Paper Award from the Decision Science Institute and several other awards.

Li Zhang

Li Zhang is a Ph.D. student in the Eli Broad College of Business at Michigan State University. She received her Master’s degree in Computer Science at the State University of New York at Buffalo. Her research interests include social networks, data science, and business analytics.

Benjamin B. M. Shao

Benjamin B. M. Shao is the Associate Dean for Asia-Pacific Programs and Initiatives, Professor of Information Systems, and the Director of the Digital Society Initiative in the W. P. Carey School of Business at Arizona State University. His research interests encompass digital platforms, data analytics, ICT services, IS security, healthcare IT, and IS/OM interface. Dr. Shao has published in the leading journals and proceedings of the associations AIS, ACM, IEEE, INFORMS, and POMS. He has been serving on the editorial boards of Journal of the Association for Information Systems, Decision Support Systems, and Information & Management, among others. He has received research grants from Honeywell, Ports America, CAPS Research, IARPA, Kairos Research, HRET, Research Triangle Institute, National Governors Association, and Arizona Department of Health Services. His research was covered by The Wall Street Journal, Harvard Business Review, The Arizona Republic, and National Public Radio.

Thomas Y. Choi

Thomas Y. Choi is the AT&T Professor of the W. P. Carey School of Business at Arizona State University. As a researcher of supply chain management, he has studied the upstream side of supply chains. He has published in Decision Sciences, Harvard Business Review, Journal of Operations Management, Journal of Supply Chain Management, Production and Operations Management, and others. He serves as co-director of the Complex Adaptive Supply Networks Research Accelerator (CASN-RA). Dr. Choi has co-authored three practitioner books and served as the lead editor of the Oxford Handbook of Supply Chain Management. He previously served as co-editor in chief of Journal of Operations Management. Since 2018, he has been listed as a Highly Cited Researcher by Clarivate’s Web of Science.