Designing System Dynamics Model of Crowdfunding Diffusion in Iran

Document Type : Original Article

Authors

1 PhD. in IT Management/ Tarbiat Modares University

2 Associate Professor, Faculty of Management and Economics (Department of Information Technology Management), Tarbiat Modares University, Tehran, Iran

3 Professor of Management and Economics, Sharif University of Technology

4 Associate Professor, Faculty of Management and Economics (Department of Information Technology Management), Tarbiat Modares University

Abstract

Considering the problem of funding start-ups because of their nature, some entrepreneurs developed crowdfunding in which funding is done via the Internet and social network instead of traditional methods. Crowdfunding is a complicated and dynamic phenomenon due to the fact that it has many models with distinctive characteristics, numerous stakeholders with different intentions, interdisciplinary nature, and differences in various countries due to diverse cultural, social, economic and technological conditions of such countries. In addition, studies conducted on this method are not significant in number and they have been conducted in an exploratory and partial manner so as to offer a preliminary understanding. As a result, it is necessary to adopt an approach capable of understanding complex-dynamic phenomena so as to be able to explain crowdfunding. The present paper designs a system dynamics model of crowdfunding for support of new Iranian knowledge-based IT start-ups so as to highlight the complexities and dynamics of the method. The sources for the development of the model include relevant literature (document model building), public opinions (crowd model building) and experts’ viewpoints (group model building). The results of model simulation suggest that the revenue of the platforms in their expansion, the existence of monitoring mechanisms, evaluation, and screening in the platforms have a significant effect on increasing the attraction of investors and capital, but activity in social networks is not very effective.

Keywords

References

[1]      Macht, S. A. and J. Weatherston  (2014). "The Benefits of Online Crowdfunding for Fund-Seeking Business Ventures." Strategic Change 23 (1-2): 1-14.
[2]      Ibrahim, N. and Verliyantina  (2012). "The Model of Crowdfunding to Support Small and Micro Businesses in Indonesia Through a Web-based Platform." Procedia Economics and Finance 4: 390-397.
[3]      Rhisiart, M.  (2013). "Exploring the future for arts and culture organisations through scenarios and vignettes." Futures 50 (0): 15-24.
[4]      Agarwal, N., et al.  (2014). "Social cyber systems—Challenges, opportunities, and beyond." Journal of Systems and Software 94: 1-3.
[5]      Stemler, A. R.  (2013). "The JOBS Act and crowdfunding: Harnessing the power—and money—of the masses." Business Horizons 56 (3): 271-275.
[6]      Carus, F.  (2013). "Finance for the future." Renewable Energy Focus 14 (2): 38-41.
[7]      Belleflamme, P., et al.  (2014). "Crowdfunding: Tapping the right crowd." Journal of Business Venturing 29 (5): 585-609.
[8]      Bruton, G., et al.  (2015). "New Financial Alternatives in Seeding Entrepreneurship: Microfinance, Crowdfunding, and Peer-to-Peer Innovations." Entrepreneurship Theory and Practice 39 (1): 9-26.
[9]      Belleflamme, P., Omrani, N., Peitz, M., (2015). "The economics of crowdfunding platforms." Information Economics and Policy, 33 (2015) 11–28.
[10]  Farokhizadeh, F., Toloie Eshlaghy, A., Radfar, R., Shoja, N. (2019). A Dynamic Model of E-Readiness for SMEs to Enter the E-Commerce Domain. Modern Research in Decision Making, 4(2), 97-122.
[11]  ITU World Telecommunication,  (2014), Individuals Internet 2000-2013,  (http://www.itu.int/en/ITU-D/Statistics/Pages/facts/default.aspx).
[12]  Valančienė, L. and S. Jegelevičiūtė (2014). "Crowdfunding for Creating Value: Stakeholder Approach." Procedia - Social and Behavioral Sciences 156: 599-604.
[13]  Zheng, H., et al.  (2014). "The role of multidimensional social capital in crowdfunding: A comparative study in China and US." Information & Management 51 (4): 488-496.
[14]  Mollick, E.  (2014). "The dynamics of crowdfunding: An exploratory study." Journal of Business Venturing 29 (1): 1-16.
[15]  Manteghi, Manuchehr, Haji Gholah Saryazdi, Ali, Zare Mehrjerdi. Yahya (2013), System Dynamics, Almase Alborz Publishing, Fall, 2013.
[16]  Forrester, J.W.  (1980). "Information Sources for Modeling the National Economy." Journal of the American Statistical Association 75 (371): 555-574.
[17]  Haji Gholam Saryazdi, Ali, Rajabzadeh Ghatari, Ali, Mashayekhi, Alinaghi, Hassanzadeh, Alireza, (2020), Crowd Model Building as a Collective Decision Support System, International Journal of Decision Support Systems: Volume 5, Issue 1, 2020.
[18]  Haji Gholam Saryazdi A, Manteghi M. (2019). Systematic Evaluation of Group Model Building in Qualitative System Dynamics Approach. IQBQ. 2019; 22 (4) :203-224,http://journals.modares.ac.ir/article-19-20452-fa.html.
[19]  Haji Gholam Saryazdi, Ali, Rajabzadeh Ghatari, Ali, Mashayekhi, Alinaghi, Hassanzadeh, Alireza (2017), The dilemma of Dynamic Problems: Providing a Framework for Defining the Problem, Journal of Management Researches in Iran, Volume 21, Number 2, Summer 2017, p. 1 -26.
[20]  Ayatollahi, A., kazazi, A., Hanafizadeh, P., Khatami Firouzabadi, M. (2019). Structuring Of complex problem with coercive stakeholders using Post Modern Operational Research. Modern Research in Decision Making, 4(3), 75-95.
[21]  Haji Gholam Saryazdi, Ali, Rajabzadeh Ghatari, Ali, Mashayekhi, Alinaghi, Hassanzadeh, Alireza (2018), Providing a Business Model of Crowdfunding in Iran, Journal of Research in Business Management, Yazd, No. 19, Spring and Summer 2018, pp. 307-342.
[22]  Kandhway, K., Kuri, J.  (2014). "Optimal control of information epidemics modeled as Maki Thompson rumors." Communications in Nonlinear Science and Numerical Simulation 19 (12): 4135-4147.
[23]  Siva, N.  (2014). "Crowdfunding for medical research picks up pace." The Lancet 384 (9948): 1085-1086.
[24]  Vennix J.  (1996). "Group Model Building: Facilitating Team Learning Using System Dynamics." London: John Wiley & Sons, 1 edition (August 1996).
[25]  Hovmand, P.  (2014). "Community Based System Dynamics." Springer-Verlag New York, DOI:10.1007/978-1-4614-8763-0.
[26]  Elias, A.A.  (2008). "Group Model Building: Energy Efficiency in New Zealand's Residential Sector." Proceedings of the 6th Annual Australian and New Zealand Academy of Management Operations Management Symposium.
[27]  Chen, H., et al.  (2014). "Integrated wetland management: An analysis with group model building based on system dynamics model." Journal of Environmental Management 146 (0): 309-319.
[28]  Winz, I., Gary, B.  (2007). "Participatory Methods in Environmental System Dynamics Projects." The 2007 International Conference of the System Dynamics Society, July 29 – August 2, 2007, Boston, Massachusetts, USA.
[29]  Haji Gholam Saryazdi, Ali, Rajabzadeh Ghatari, Ali, Mashayekhi, Alinaghi, Hassanzadeh, Alireza, (2019), Designing a Qualitative System Dynamics Model of Crowdfunding by Document Model Building, Qualitative Research in Financial Markets, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/QRFM-07-2018-0082.
[30]  Berns, J.P., Figueroa-Armijos, M., da Motta Veiga, S.P., Dunne, T.C. (2020). Dynamics of Lending-Based Prosocial Crowdfunding: Using a Social Responsibility Lens. J Bus Ethics 161, 169–185 (2020). https://doi.org/10.1007/s10551-018-3932-0.

Files

Share

How to cite

Statistics