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Putting your money where your mouth is – the role of rewards in a value-based understanding of restaurant crowdfunding

Satishwar Kedas (Parque do Alentejo de Ciência e Tecnologia, Evora, Portugal and Department of Production and Quantitative Methods, Indian Institute of Management Ahmedabad, Ahmedabad, India)
Soumodip Sarkar (CEFAGE-UE and Department of Management, University of Évora, Évora, Portugal and Asia Center, Harvard University, Cambridge, Massachusetts, USA)

International Journal of Contemporary Hospitality Management

ISSN: 0959-6119

Article publication date: 16 August 2022

Issue publication date: 2 January 2023

152

Abstract

Purpose

Restaurant entrepreneurs are increasingly leveraging crowdfunding as an alternative financing mechanism. In the context of restaurant crowdfunding, studies have identified factors related to campaign communication that affect crowdfunding success from the entrepreneurs’ perspective. Integrating a funder perspective, this study aims to investigate the role of the consumption value offered by rewards and builds a value-based understanding of restaurant crowdfunding.

Design/methodology/approach

This study uses a sample of 3,134 restaurant campaigns launched on the Kickstarter crowdfunding platform, and texts of 34,128 rewards were analyzed using a Python program. A hierarchical linear regression approach with a generalized logistic regression model was adopted to test hypothesized relationships.

Findings

Drawing upon consumption value theory (CVT), this study finds that in restaurant crowdfunding, utilitarian value holds a strong inverted-U relationship and participatory value holds a strong linear relationship with crowdfunding success. However, socioemotional value does not have a significant effect on outcomes. This study also finds evidence for positive effects of greater variety, higher number of rewards and lower average pledge level on restaurant crowdfunding success.

Practical implications

This study extends the literature on restaurant crowdfunding by integrating insights on the effects of value offered through rewards. Primarily, this study finds evidence for distinct effects of consumption values for restaurant crowdfunding audience. Practically, this study holds implications for reward menu design and value offering design for restaurant entrepreneurs seeking crowdfunding.

Originality/value

Restaurant crowdfunding has been studied to a limited extent, with extant literature focusing on characteristics of campaign descriptions. The role of rewards is uncovered using CVT and thus a value-based understanding of restaurant crowdfunding is presented.

Keywords

Acknowledgements

The authors gratefully acknowledge the generic financial support received from the Fundação para Ciência e Tecnologia (FCT), through UIDB/04007/2020. The authors would like to thank Vikrant Rewal and Abhishek Agarwal for their research support.

Funding: The author gratefully acknowledges generic financial support received from the Fundação para Ciência e Tecnologia (FCT), through UIDB/04007/2020.

Citation

Kedas, S. and Sarkar, S. (2023), "Putting your money where your mouth is – the role of rewards in a value-based understanding of restaurant crowdfunding", International Journal of Contemporary Hospitality Management, Vol. 35 No. 1, pp. 92-114. https://doi.org/10.1108/IJCHM-11-2021-1353

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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