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An interdisciplinary research agenda in alternative finance

Our ambition at the Cambridge Centre for Alternative Finance is to establish a world-class interdisciplinary centre for alternative finance and promote cutting-edge research that extends the boundaries of knowledge and engages with the academic community, as well as policymakers, institutions, corporations and industry partners. The following emerging academic themes outline CCAF's collaborative research agenda:

Innovation and regional development

The provision of finance for start-ups and SMEs is a highly geographical phenomenon with a structural impact on regional innovation, growth and development. Will alternative finance intermediaries and instruments facilitate a more decentralised paradigm of funding and, in turn, change the distribution of invention, innovation, opportunities and wealth at various geographical scales? Or will alternative finance actually reinforce the existing models of centralised finance provision and clustered patterns of innovation, growth and regional development?

Social and cognitive behavioural finance

Through disintermediation and re-intermediation of financial processes and relationships, crowdfunding and peer-to-peer lending are providing more direct, transparent and social marketplaces for financing. With each completed fundraising round consisting of hundreds, if not thousands, of micro-transactions, alternative finance is a rich ground on which to study the effects of psychological, cognitive, emotional and social factors on the financing decisions of individuals and the economic consequences of prices, returns and resource allocation. For instance, how will new social and behavioural data gathered from alternative finance change how an asset is priced, a valuation is ascertained or a risk is modelled?

Reputation and trust

How will reputation and trust manifest themselves in alternative finance marketplaces and the provision of finance through non-banking financial instruments? Will an unprecedented level of social interactions during financial transactions on alternative finance platforms help utilise the 'wisdom of the crowd' to unleash the 'collective intelligence', or will the 'tranny of the majority' lead to 'collective failure'? How do data sharing, information hiding and knowledge asymmetry impact on reputation in the online marketplace? What is the role of trust in facilitating the provision of finance for established SMEs through alternative finance instruments such as mini-bonds offerings?

Asset pricing and corporate finance

In the context of a post-crisis economy, does alternative finance truly offer a diverse range of new asset classes? If so, how can insights from asset pricing (dynamic models, complex markets and risk premiums) and corporate finance (incentives, information and agency) help us understand pricings and mispricings in alternative finance markets?

Management and organisational behaviour

Thousands of innovative SMEs are being funded through alternative finance on a monthly basis worldwide. Many multi-national corporations are leveraging crowdfunding and crowdsourcing both externally and internally to foster creativity, improve productivity and engage with customers. Banks are looking into the peer-to-peer lending model to achieve better efficiency, reduce costs and increase margins. How will a more decentralised, collaborative and direct alternative financing model impact on innovation, management, organisational structure and behaviour at firm and institutional level?

Social movement and the financial system

To what extent is alternative finance a cultural-political creation as well as a socio-economic phenomenon? Will wider social participation and societal involvements through alternative finance lead to a more diverse, transparent, decentralised, robust and resilient financial system?