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RESEARCH PRODUCT

Investment Intention in Crowdfunding

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description

Crowdfunding is a form of investment that has emerged in the alternative financemarket. It addresses the unmet demand of small investorswanting toinvest in startups orcontribute to projects. In developing countries, this concept is recent,thus leadingto less activity compared to advanced markets. This master thesis seeksto explain the factors that driveor prevent investors from developed countries to fund projectsin developing countries. Factorslike monetary utility, societalutility, cultural distance, geographical distance, personal interest, perceived risk of crowdfunding, perceived risk on investment in developing countries, and self-efficacy have been identified inthe literature review. These factors have been transformed to testablehypotheses. This studyhasusedanexploratory quantitative approach andcollecteddata from 79 individuals, mainlyNorwegian nationals. Of the eight hypotheses, monetary utility, personal interestandperceived risk of investment in developing countries havenot been testable due to inadequatedata.The two hypothesescultural distance and geographical distance have beenmergedinto one variable as psychic distance due to being too highly correlated. Findingsfromthemultiple regression analysis have resultedinusaccepting the hypotheses of societal utility, self-efficacy, and psychic distance to be factors that impact investment intentionin crowdfunding. Perceived risk of crowdfunding on the other hand has beenfound insignificant. Results of this study havecontributed to our theoretical understanding of drivers and barriers for using crowdfunding for investment in developing countries. For practice, the results are highly relevant for fund seekers who are trying to raise funds through crowdfunding.