Crowdfunding beyond borders: Geographic disparities in crowdfunding success

Abstract

This study investigates how geographic location influences the effectiveness of entrepreneurial signals in crowdfunding, integrating Regional Development Theory and Signaling Theory. Using data from 2578 reward-based crowdfunding campaigns on the Israeli platform Headstart (2012–2022), we find that structural advantages in central areas enhance the effect of entrepreneurial signals, such as prior experience and reward diversity, while systemic barriers in peripheral regions weaken these signals' effectiveness. The principal insight of this study is that geographic context not only shapes crowdfunding success but also moderates the effectiveness of signaling strategies, thereby intensifying regional disparities. These findings contribute to the literature by demonstrating how geographic context moderates the strength and interpretation of entrepreneurial signals, ultimately influencing funding success and engagement. Practical recommendations include enhancing campaign visibility for peripheral entrepreneurs and developing tailored training programs to optimize their signaling strategies.