28 Mar 2025
Recently, the paper entitled “Home-country technological legitimacy in crowdfunding: the moderating role of positive psychological capital language” by Dr Yameng Zhang from the department of Department of Strategic Management and Organisations, International Business School Suzhou (IBSS) at Xi’an Jiaotong-Liverpool University (XJTLU) has been published on Technovation.
This study explores how small- and medium-sized enterprises (SMEs) from emerging markets can leverage positive psychological capital language to overcome their liability of origin and improve crowdfunding performance. Legitimacy plays a critical role in the success of crowdfunding campaigns, yet SMEs from emerging markets often face unique challenges, including their smaller size, relative newness, and the perceived disadvantages associated with their home country's technological standing. Technological legitimacy, in this context, refers to the social recognition of a firm's ability to meet audience demands and deliver value through technological innovation and capabilities. Because of information asymmetry and the psychic distance between countries, crowdfunding backers may assess a campaign based on the country of origin, leading them to undervalue campaigns from emerging markets.
However, the study reveals that positive psychological capital language—such as optimism, persistence, and tenacity—can effectively signal an SME's technological competence and innovation, helping to counterbalance the technological illegitimacy of its home country and enhancing crowdfunding performance. Linguistic cues serve as powerful tools for shaping perceptions, cultivating positive first impressions, and communicating the value of a venture's products. By incorporating positive psychological capital language, entrepreneurs can make their crowdfunding campaigns more compelling, signaling positive traits and behaviors that resonate with potential backers and overcome the lack of perceived legitimacy.
The findings suggest that using language that conveys optimism, insistence, and tenacity can significantly mitigate the negative impact of technological illegitimacy on crowdfunding outcomes. Entrepreneurs who exhibit optimism are more likely to navigate the inherent challenges of entrepreneurship with resilience and determination, tackling adversity head-on while remaining engaged with their goals. Insistent entrepreneurs, with their sustained, goal-directed energy, are particularly effective in the early stages of a venture, helping to ensure successful product prototyping, commercialization, and overall business functionality. Tenacious entrepreneurs are less likely to give up in the face of setbacks, increasing the likelihood of long-term survival and success in the competitive entrepreneurial landscape.
From a practical standpoint, the study highlights the importance for entrepreneurs to craft compelling narratives that emphasize their resilience, optimism, and commitment to their goals. Such traits can enhance their perceived legitimacy and boost funding prospects. For policymakers, the results underscore the significance of investing in national technological capabilities, which can have far-reaching effects on the success of crowdfunding campaigns and, ultimately, on entrepreneurial growth. For investors, the study provides valuable insights into evaluating crowdfunding campaigns, suggesting that they consider both home-country technological legitimacy and the strategic use of positive psychological capital language when making investment decisions.
Yameng is an Associate Professor at the International Business School Suzhou (AACSB, EQUIS, AMBA) at Xi'an Jiaotong-Liverpool University. She holds the position of Director of the Research Center of Excellence (Sustainability and ESG) and was awarded the title of Innovation and Entrepreneurship Doctor by the Jiangsu Talent Programme (江苏省“双创”博士) in 2020. In 2023, she was recognized as a Key Talent in Science and Education (科教区骨干人才) by the Suzhou Industrial Park. Previously, Yameng obtained her Ph.D. from the Adam Smith Business School (AACSB, EQUIS, AMBA) at the University of Glasgow. Her research interests lie at the intersection of strategic management and international business (IB), with a particular focus on how institutions and stakeholder networks influence firm strategies. Yameng's research has been published in high-quality international journals such as the International Business Review, Journal of Business Research, and IEEE Transactions on Engineering Management. One of her IB papers was selected as a "That's Interesting!" Award winner at the Academy of International Business Annual Meeting in 2019. She is the principal investigator for the project "The Study on the Mechanism and Dynamic Relationships between International Friendship Cities and Outward Foreign Direct Investment," funded by the National Natural Science Foundation of China. In collaboration with a European Research Council Advanced Project (REDEFINE), Yameng successfully secured funding from both the National Natural Science Foundation of China and the European Commission's China-EU Talent Project in 2021.
Technovation is a leading international journal dedicated to the study of innovation, technology management, and entrepreneurship. Published by Elsevier, it serves as a premier platform for high-quality research that bridges the gap between technological advancements and their practical applications in business, policy, and society.
The journal covers a broad spectrum of topics, including digital transformation, R&D management, open innovation, sustainable technologies, startup ecosystems, and innovation policy. With a strong emphasis on both theoretical and empirical contributions, Technovation attracts cutting-edge research from scholars, industry experts, and policymakers.
28 Mar 2025