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NTU Management Review Vol. 32 No. 2 Aug. 2022

there is no empirical analysis that directly examines their impacts primarily due to
data unavailability (Kuppuswamy and Bayus, 2018). Fortunately, one reward-based
crowdfunding platform in Taiwan, flyingV, records all related information by showing
“Number of Supporters” for each project. Supporters refer to those who click “Like” on

the project webpage. The supporters’ list includes “backers” and “bystanders.” “Backers”
are defined as project funders who contribute funds to the projects (Kuppuswamy and
Bayus, 2018). “Bystanders” are those who only psychologically support the project but

have not contributed funds to the project (Chan, Parhankangas, Sahaym, and Oo, 2020;
Kuppuswamy and Bayus, 2017). Despite growing scholarly attention to bystanders, the
actual effect of those bystanders on project fundraising performance in crowdfunding
remains unexplored and represents a crucial oversight in the crowdfunding literature.
To bridge this gap, our research draws on the bystander effect in the social psycho-

logical literature to examine their role in crowdfunding. First, we propose that a higher
bystander ratio (i.e., more bystanders but with fewer backers) in a project is negatively as-
sociated with the project’s daily pledge amount. This is probably because the presence of

bystanders will discourage investors from investing and increase the risk of project failure.
Furthermore, we identify project legitimacy and project duration as two important factors
that mitigate the adverse bystander effect because these two factors provide campaign-re-
lated information.
We expect project legitimacy to lessen the adverse bystander effects (Belleflamme,

Lambert, and Schwienbacher, 2013; Taeuscher, Bouncken, and Pesch, 2021). Project
legitimacy in the form of firm incumbency provides project creators’ past information
and reduces information ambiguity, hence turning bystanders into actual funders. More-

over, the funding duration would mitigate the bystander effect. Specifically, as the project
fundraising period goes by, the platform helps spread project information to more people
(Pariser, 2012). Therefore, we expect an extended project funding period to convert “by-
standers” into “backers,” thus mitigating the negative bystander effect on project fund-
raising. By examining 5,773 daily observations from 191 crowdfunding projects on the

flyingV platform, we find support for our three proposed hypotheses.
This study complements recent works on the crowdfunding phenomenon and bridges
several vital gaps in the literature. While prior studies have pointed out the importance to

consider the network effect in crowdfunding (Hong et al., 2018; Kuppuswamy and Bayus,

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