Publication Type

Journal Article

Version

acceptedVersion

Publication Date

3-2021

Abstract

Matching subsidies, through which third-party institutions provide a dollar-for-dollar match of private contributions made through selected campaigns, have served as effective tools to boost fundraising. We utilize a quasi-experiment on a prosocial crowdfunding platform to examine the effectiveness of matching subsidies in shaping funding outcomes and lender behaviors. Although matching subsidies offer matched loans competitive advantages over unmatched loans, we find that total private contributions made to both matched and unmatched loans increase compared to their prematching counterparts, suggesting a positive spillover effect on unmatched loans. However, matching subsidies lead to decreased private contributions made on the platform after a matching event, revealing an intertemporal displacement effect on existing loans. Furthermore, we find that matching subsidies effectively encourage previously inactive lenders to contribute to matched loans, leading to a motivational crowding-out effect on active lenders’ contributions to unmatched loans. These findings shed new light on the overall effectiveness of matching subsidies provided through online crowdfunding platforms.

Keywords

Monetary incentives, Crowdfunding, Prosocial lending, Matching subsidies, Generalized diference-in-diference

Discipline

Databases and Information Systems | Management Information Systems

Research Areas

Information Systems and Management

Publication

Information Systems and E-Business Management

First Page

1

Last Page

22

ISSN

1617-9846

Identifier

10.1007/S10257-021-00515-6

Publisher

Springer Verlag (Germany)

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