The importance of transitioning to a sustainable economy - one which safeguards ecological life-support systems and provides equity within and between generations - has become increasingly urgent. A crucial ingredient of such a transition is sustainable innovation by new or existing enterprises, to develop business activities that realize both societal and financial value. However, obtaining finance for sustainable innovation is often a challenge due to both principal-agent and (double) externality problems. While society benefits from investments into sustainable innovation, the – financial and societal - return for individual financiers is highly insecure.
This dissertation explores how to enable finance for sustainable innovation, with a focus on banks and crowdfunding platforms. It makes use of two theoretical lenses. First, it studies how to overcome principal-agent problems through different lending technologies. Second, and more novel, it takes a collective action perspective to address the double externality problem embodied in sustainable innovation finance. This research fills a gap because there exist empirically well-defined mechanisms for solving collective action problems that have not yet been applied to the finance domain. Furthermore, the dynamics of collective action appear particularly relevant in the emergence of technologically driven, decentralized financial instruments like crowdfunding.
This dissertation draws conclusions regarding the role of relationships, cash flows and assets as enablers of sustainable innovation finance, as well as regarding motivations of crowdfunders to undertake such investments. It highlights the challenge of enabling sustainable innovation finance while guarding the quality of the investment decisions in line with the motivation of the financier.

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Keywords Sustainable innovation, crowdfunding, bank lending, collective action, innovation finance, double externality problem, sustainable entrepreneurship, financial literacy, user crowdfunding, externalities, institutional analysis and development framework, lending technologies, informational asymmetries, sustainability, entrepreneurial finance
Promotor H.R. Commandeur (Harry) , K.E.H. Maas (Karen)
Publisher Erasmus University Rotterdam
ISBN 978-90-5892-530-5
Persistent URL
Series ERIM Ph.D. Series Research in Management
Toxopeus, H.S. (2019, January 10). Financing sustainable innovation : From a principal-agent to a collective action perspective (No. EPS-2019-458-S&E). ERIM Ph.D. Series Research in Management. Erasmus University Rotterdam. Retrieved from