Crowdfunding as a Form of Funding for Businesses in the Culturally-Changing Global Economy: A Literature Review

Abstract

Objective: The main purpose of the crowdfunding literature review was to find an answer to the following research questions: do scholars investigating related topics take into account the increasing importance of crowdfunding as a form of funding and resulting economic consequences for SMEs? Is the relevance of crowdfunding in reducing the funding gap taken into consideration? Do studies involve analyses of economic consequences associated with the development of crowdfunding for the banking sector? The research questions we have asked refer to the existing state of knowledge about the extent of crowdfunding-related studies underway. The validity of the subject is due to the fact that crowdfunding is a new form of raising capital in the Culturally-Changing Global Economy.

Methodology: Once we analysed the literature review methodologies, we decided on a stateof- the-art analysis since this method allows to establish the facts for the research and subsequently to propose a new perspective and new directions of research. Due to the necessity to select the right texts on crowdfunding, selection criteria in terms of quantity and quality were defined (scoping review). We reviewed the literature on crowdfunding published between 2010 and 2018 using the following databases: Ebscohost, ProQuest, ScienceDirect, Web of Science, Scopus, and BazEkon.

Findings: In literature on the subject, the significance of crowdfunding for businesses at early stages of their growth is emphasized. However, there are very few publications directly about SMEs. Among the articles analyzed, the relevance of crowdfunding in reducing the funding gap and financial exclusion has been emphasized. However, our search for articles about the said phenomenon produced a very small number of such articles, which – considering quite a large number of articles in total – clearly means that this topic is rarely discussed and studied. The aspects associated with the relationships between the banking sector and crowdfunding are discussed in a majority of the articles under analysis, but there is still no empirical research in this area.

Value Added: The literature review carried out allowed us to identify research gaps in such important areas for crowdfunding as funding for the SME sector and relationships between crowdfunding and banking. As opposed to other similar research projects, we do not omit methodological constraints affecting the final results of studies and we suggest solutions allowing for a more in-depth analysis of articles.

Recommendations: A suggested further direction of research concerns the use of the theory of enterprise funding sources in studies of the role of crowdfunding when compared to other forms of fundraising (the theory of alternative and transactional costs) by SMEs. When planning further research, the following needs to be done: 1) To carry out comprehensive research, since all the studies carried out so far were only fragmentary. It particularly applies to relationships between SMEs, the banking sector, and crowdfunding. 2) To extend research according to criteria that allow sources discarded in this research to compare findings.