Is the World Flat? Unpacking the Geography of Crowd Capital

Abstract

How does the geographic location of individual crowd members effect crowdsourcing participation and outcomes? How do variations in contest design effect crowdsourcing participation and outcomes by country and region? In this work we begin to answer these important questions by empirically testing the effects of geography and contest design on crowdsourcing participation and outcomes. Using data from a global creative crowdsourcing site, we utilize Crowd Capital Theory with data encompassing 1,858,202 observations from 28,214 crowd members on 94 different projects, to test our hypotheses based on the premise that the crowdsourcing is – much like the real world – not a flat one. Using multiple probit regressions to isolate the geographic effects, we find significant variation across countries and regions on crowdsourcing participation and outcomes, and further, significant effects of contest design on participation and outcomes by country and region. Our work makes new and useful contributions to the literature on crowdsourcing and creative competitions used for open innovation, ascertaining that the world is still not flat — even in case of tournaments on IT platforms with global reach. This is also the first work to empirically measure the distinct stages of resource creation from IT-mediated crowds; in doing so we validate Crowd Capital Theory as a model for resource creation from IT-mediated crowds.