With the rise of web 2.0 technologies, it empowers firms to outsource their business tasks to the individuals or crowd, who are capable to complete these tasks for them. On the other hand, the crowd can also invest some money to the business idea and project that initiated by entrepreneurs who do not have enough money. And this is crowdfunding (Zheng et al. 2014).

The word crowdfunding actually comes form crowdsourcing, which is defined as “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.’’ (Howe, 2006). Instead of collecting ideas or solutions, crowdsourcing can be used to collect monetary and financial resources (Howe, 2006). This type of crowdsourcing which crowd is an investor who invest the project, is called crowdfunding (Zheng et al. 2014).

According to Zheng et al. (2014), they only focus on one type of crowdfunding, which is called reward-based crowdfunding. the definition of this type of crowdfunding is “the crowdfunding involves an open call, essentially through the Internet, for the provision of financial resources either in the form of a donation or in exchange for some form of reward and/or voting rights in order to support initiatives for specific purposes’’ ( Schwienbacher, 2010). different from crowdfunding, social capital is a multidimensional concept. based on Nahapiet and Ghoshal (1998), the social capital has three basic dimensions: structural, relational and cognitive. To be more specific, the structural dimension is the structural characteristics, which are vital for the development of social capital. the relational dimension is the capital derived from the obligation, expectation of the social network. last but not least, the cognitive dimension suggests that shared language could actually help people gain the social capital in the organization.

In this article, Zheng et al. (2014) studied the moderating roles of culture on the social capital in two different countries and the relationship between the relational dimension and crowdfunding performance.

1. Structural dimension: social network ties

The fundamental proposition for the structural dimension is the network ties provide the access to resources, like knowledge and funds. Moreover, Mollick (2014) found that the personal network of an entrepreneur helps predict the success of crowdfunding. in this case, the degree of an entrepreneur’s social network ties is positively associated with crowdfunding performance.

2. Relational dimension: obligation

The relational dimension of social capital can be seemed as the strength or quality of the relationship, and this can be evaluated by trust, obligations and identification (Nahapiet & Ghoshal, 1998). On the perspective of crowdfunding, an entrepreneur may feel such an obligation in the crowdfunding initiative. In this case, the obligation to fund other entrepreneurs is positively associated with crowdfunding performance.

3. Cognitive dimension: shared meaning

Shared meaning plays an important role in the cognitive dimension of social capital (Nahapiet & Ghoshal, 1998). Based on Lehner (2012), the crowdfunding is a co-production process in which investors and entrepreneur are in the close relationship which are cooperative and active in the development of the crowdfunding project though word-of-month. In this case, shared meaning about a crowdfunding project is positively associated with crowdfunding performance.

Reference:

J. Howe, Crowdsourcing: A Definition, 2006

J. Nahapiet, S. Ghoshal, Social capital, intellectual capital, and the organizational advantage, Acad. Manage. Rev. 23 (2), 1998, pp. 242–266.

E.Mollick,The dynamics of crowdfunding: an exploratory study,J.Bus.Venturing 29 (1), 2014, pp. 1–16.

O.M. Lehner, A literature review and research agenda for crowdfunding of social ventures, Presented at the 2012 Research Colloquium on Social Entrepreneurship, University of Oxford, Skoll Center of SAID Business School, UK, 16–19 July, 2012

T. Lambert, A. Schwienbacher, An Empirical Analysis of Crowdfunding, 2010

Zheng, Haichao, et al. “The role of multidimensional social capital in crowdfunding: A comparative study in China and US.” Information & Management 51.4 (2014): 488-496.

With the popularization of the social computing, people cannot really live without social network. in the past few decades, there is a huge growth on the social network and user-generated content (Peck et al. 2008).

Given the ease of creating a personal page or channel on YouTube, a user can engage his videos himself for the self-expression (Raymond 2001) and the peer recognition (Resnick et al. 2000) social interaction with each other. A channel on YouTube is used to display content that users uploaded, the videos form other users, the favorite videos of the channel, also with the friends and subscribers. In this case, this function of channel has blurred the boundaries between creators and consumers. On the other hand, the friend network on the YouTube is the result of mutual agreement, which can be seemed as an undirected network. A friend relationship on YouTube can be  initiated  from one to another by an invitation and this would need the confirmation from the user who accept the invitation.

in this article, Susarla et al. (2012) are motivated by the success of YouTube, which is attractive to meet the satisfaction of both creator and corporation for rapidly broadcast its digital content to the public. It is obvious that the interaction between poster and viewer on the YouTube and the variation of categories about the successful videos posted online has led to the significant effect on social influence. Base on the data set of video information and the information about the user which collected from the YouTube, Susarla et al. (2012) found out that the social influence effects not only on deciding which one becomes popular, but also on the magnitude of that impact. To be more specific, to whom the video would effect and how long it would effect. On the other hand, some evidence has pointed out the dynamics of digital content diffusion structured through a network, namely a preference for conformity and homophily, and the role of social networks in guiding viewer search and discover the videos.

As a result, Susaria et al. (2012) have proved that channels from YouTube that are central in the subscriber network and local friend network both have a significant impact on the rate of diffusion. Moreover, a channel’s centrality in the incoming subscriber network  and local friend network both have a significant positive impact on the rate of diffusion in the initial phase of content diffusion as well.

In conclusion, the results offer the distinguish between the different types of information transmission in various types of social interaction. Additionally, it demonstrates that social network impact the economic outcomes by structuring different information to different actors, and this would have a great impact on others’ decisions, perceptions, and behavior.

Reference:

Susarla A, Oh J H, Tan Y. Social networks and the diffusion of user-generated content: Evidence from YouTube[J]. Information Systems Research, 2012, 23(1): 23-41.

Raymond, E. 2001. The Cathedral and the Bazaar. O’Reilly, Sebastopol, CA.

Peck, R. S., L. Y. Zhou, V. B. Anthony, K. Madhukar. 2008. Con- sumer Internet, Bear Stearns equity research report. Bear Stearns, New York.