Crowdfunding Platforms as a Substitute Financing Source for Young Saudi Entrepreneurs: Empirical Evidence

Abstract

This study investigated the factors determining the behavioral intention of young Saudi entrepreneurs to use crowdfunding to finance their small enterprises. The capacity of behavioral intention to predict the use behavior of crowdfunding platforms was also assessed. Partial least squares-based structural equation modeling method (PLS-SEM) was used to analyze responses collected from 270 young Saudi entrepreneurs (qualified students) attending the Community College of Abqaiq in Saudi Arabia, which is affiliated with King Faisal University. The unified theory of acceptance and use of technology (UTAUT) with extensions of three constructs was employed. The findings revealed that performance expectancy, social influence, perceived trust and perceived risks predicted the behavioral intention of young Saudi entrepreneurs to use crowdfunding platforms to finance their small enterprises, whereas effort expectancy, facilitating conditions and trialability had no significant predictive effect on the same behavioral intention. It was further reported that behavioral intention could also predict the use behavior of young Saudi entrepreneurs on crowdfunding platforms. The overall results indicated that the model explained 55.4% of the variance in behavioral intention and 38.3% of the variance in use behavior of young Saudi entrepreneurs.