Tie Strength, Network Closure, and Crowdfunding Performance : An Empirical Study of Social Ties Between Fundraisers

While highlighting the role of social networks in crowdfunding, extant studies at the operations management-information systems interface remain silent on how social interactions mediated by the crowdfunding platform facilitate fundraising activities and platform operations. In this study, we examine how the strength of social ties within the crowdfunding community helps accumulate internal social capital that addresses information asymmetry while promoting fundraisers’ resource integration and combination. Treating internal tie strength as a multidimensional construct involving relationship intensity and preference similarity between a focal fundraiser and peers, our study explores how tie strength interacts with network closure (i.e., the structure of a fundraiser’s internal social relationships) to determine crowdfunding performance. Our estimation results indicate that (1) tie strength dimensions exhibit inverted U-shaped relationships with crowdfunding performance and (2) network closure weakens the relationships between internal tie strength and crowdfunding performance. Our study findings provide implications for fundraisers and platform managers to nurture successful projects through the means of social relations within the community