Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
Abstract
We study whether the tone of the daily news in mass media, used as a proxy for market
sentiment, affects the typical daily pledge amount in reward crowdfunding campaigns. Based
on unique data from over 350,000 pledges in reward crowdfunding campaigns in over 2,600
cities in Brazil, we find that market sentiment affects the willingness of backers to make
larger pledges. Our unprecedented results reveal that good news induces pledges of larger
amounts. The effect of tone over pledge amounts is inhibited by the geographic distance
backer-entrepreneur, and it is reinforced by the income inequality in the pledger’s city.This work was supported by the National Council for Scientific and Technological DevelopmentCNPq [grant number 47089420148]; the São Paulo Research FoundationFAPESP [grant number 17/09306-6]
