Predicting crowdfunding economic success in the gulf cooperation council

Abstract

This study aims to analyze crowdfunding’s economic success in the Gulf region as the Crowdfunding (CF) experience and practice in this part of the world tend to be unexplored in terms of research. In particular, the study examines whether the adoption of entrepreneurial finance (EF) principles in crowdfunding platforms affects the economic success of funding and entrepreneurs’ ability in the Gulf Cooperation Council (GCC) to access financial resources. The study uses an online questionnaire survey on Crowdfunding economic success in the GCC to collect information from the participants. Participants are investors, entrepreneurs, and startups from five Gulf countries (i.e., Saudi Arabia, Bahrain, Kuwait, Oman and UAE) in addition to several Crowdfunding platforms commonly used by crowdfunders in this region (such as Indiegogo, Kickstarter, Eureeca, Beehive and GoFundMe) with total members (102964). Signaling theory and principle-agent theory combine to make a theoretical foundation that explains the relationship between funders and fundraisers. The pilot sample consisting of 10 units was used to validate and verify the research instrument of the study. The research sample consists of 1145 respondents (sample size n = 1145) selected randomly from the five Gulf countries included in the study. The findings reveal that CF’s presence positively impacts economic fundraising success and that crowdfunding platforms are an effective financial technology (Fintech) tool for financing entrepreneurs in the GCC. We conclude with recommendations for future EF and CF research. The findings of this study will have implications for improvements in practices of economic and finance. They may be used as a guide towards advancing the management and performance of the crowdfunding platforms in the Gulf region. Presently, a very few number of published research on crowdfunding exist in this region. Moreover, to the best of our knowledge, there is no single study investigating crowdfunding as an alternative financing source in the GCC.