Financial Innovation: An Expanding Research Field
Journal of Financial Innovation, Vol. 1, No. 1, pp. 1-3, 2015. DOI: 10.15194/jofi_2015.v1.i1.14
3 Pages Posted: 9 Nov 2014
Date Written: November 6, 2014
Abstract
Financial innovation has received significant attention since the recent international economic crisis (Shiller, 2013), despite not necessarily being a new concept in the finance literature (Bennett, 1963; Tucker, 1976). As a result of the crisis, financial innovation has become a focus in a time of re-evaluation (Engelen, Erturk, Froud, Leaver & Williams, 2010). For example, Allen (2012 explores the benefits resulting from financial innovations and discusses what might be called the ‘dark side’ of financial innovations (Henderson and Pearson, 2011; Diaz-Rainey and Ibikunle, 2012). Allen (2012) finds empirical evidence suggesting that financial innovation often increases the complexity of transactions, resulting in opportunities to explore questions of interest to the consumers of financial services. Thus, in the long term, financial liberalization likely has negative effects and does not result in an innovative process. However, there are also many financial innovations that have already produced significantly positive effects, such as opportunities for venture capital and other developing financial innovations that are still in the early stages of development (such as equity crowdfunding).
Keywords: Financial Innovation
JEL Classification: O1, O3, P3, G3, L1, Q1
Suggested Citation: Suggested Citation