Category Archives: SFL

A diverse and resilient financial system for investments in the energy transition

Posted on February 2, 2017 | Comments Off on A diverse and resilient financial system for investments in the energy transition

Diversity makes the financial system more resilient. In addition, there is a diverse investment demand to make the transition to a more sustainable energy system. We need, among others, investment in energy transition, circular resource use, better water management and reducing air pollution. The two are linked. Making the financial system more diverse implies more equity, less debt, more non-bank intermediation and more specialized niche banks giving more relation based credit. This will arguably also increase the flow of funds and resources to innovative, small scale, experimental firms that will drive the sustainability transition. Higher diversity and resilience in financial markets is thus complementary and perhaps even instrumental to engineer the transition to clean energy in the real economy.

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The wisdom of the crowd in funding: information heterogeneity and social networks of crowdfunders

Posted on January 5, 2017 | Comments Off on The wisdom of the crowd in funding: information heterogeneity and social networks of crowdfunders

Putting the relationship back into investing:

Crowdfunding has enabled large crowds to fund innovative projects. This type of funding might tap into the wisdom of crowds who were previously disconnected from the funding process. We distinguish between in-crowd and out-crowd funders (with and without ties to project creators) in order to test for heterogeneity in their information use. Based on the analysis of a large-scale survey amongst project funders, this paper shows that in-crowd investors rely more on information about the project creator than out-crowd investors. Out-crowd investors do not seem to attach more importance to information about the project itself than in-crowd investors, except in the case of donation-based crowdfunding. For financial return crowdfunding, financial information becomes less important once a strong relationship with the project creator is established. Our study allows project creators to target information to specific audiences based on their relationship strength across different types of crowdfunding projects.

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