Research interests

One of the main research interests of the research group is in the field of Financial Technology (FinTech). Thereby, besides the dissemination of FinTech companies, their business models and possible market risks are investigated. The focus is on crowd-based financial services, electronic payment methods, robo-advice and block-chain, especially crypto currencies and initial coin offerings. In addition, the interaction between FinTechs and classic market participants of the financial industry such as Amazon, Apple, Google, Facebook and Co. is examined. In 2016, Professor Hornuf acquired and managed two research projects on this subject at the Federal Ministry of Finance. Several books and essays, for example in Small Business Economics, have resulted from this research focus.

Crowdfunding is the Internet-based collection of contributions from several investors to finance projects (classical crowdfunding), start-up companies (crowd investing) or loan applications (crowdlending). Crowdfunding closes a global gap in the corporate finance market. The individuals or companies financed through crowdfunding are often too risky for banks, too small for institutional venture capitalists and have a too big financing need for friends and family members. Without crowdfunding, these individuals or companies would be dependent on state funding or would not receive any funding. Crowdfunding therefore has enormous potential for financing innovative business ideas and economic growth. The aim of the planned research projects is to answer the question of whether and how crowdfunding should be regulated in Germany or at EU level. To do this, the scope and structure of the crowdfunding markets in Germany, England and the USA will be examined and the existing state and private regulations in these three countries will be recorded. In a second step, the consequences of crowdfunding for all participants will be analysed. To be more precise, it will be investigated whether crowdfunding enables an efficient capital allocation between investors and start-up companies and thus represents an eligible financing alternative. This raises the question of whether crowdfunding suffers from a certain form of market failure that requires concrete legislative intervention. Finally, it is examined whether competition among crowdfunding platforms prevails or can prevail and whether it leads to good or bad standards, i.e. a race to the top or a race to the bottom. The research questions will be answered using empirical capital market research methods and examined on the basis of theoretical models. Between 2014 and 2017, Professor Hornuf acquired and led a research project on this subject at the Deutsche Forschungsgemeinschaft ( DFG - German Research Foundation). This project has led to publications in the Journal of Corporate Finance, the California Management Review and Small Business Economics.

In the area of law and finance, there are on the one hand overlaps concerning crowdfunding. The question that arises is whether and how this new form of financing should be regulated. On the other hand, the research projects will investigate classical subjects of law and finance research. One focus is on financing through bonds and how these are legally structured. In particular, the economic effects of certain contract rights are analysed. Another research focus is the economic analysis of the European Company (Societas Europaea - SE). Empirical analyses will be used to determine the extent to which the European Company increases or decreases the enterprise value of a public limited company and whether the legal structure (co-determination, structure of the management body, taxation, etc.) of the European Company plays a decisive role. This project has led to publications in the Journal of Common Market Studies and the International Review of Law and Economics.

Despite numerous regulatory measures, fraud cases in companies are an everyday occurrence worldwide. Not only manipulations in the financial sector, but also everyday fraud (e.g. the theft of office supplies or the use of working hours for private purposes) cost companies and thus consumers and shareholders billions. In contrast to the standard economic model of fraud behaviour and punishment, which describes fraud behaviour as a simple cost-benefit analysis, behavioural economic research takes up the theory of self-concept maintenance as a theoretical basis. According to this theory, a person's decision to behave fraudulently is guided primarily by the fact that he or she can credibly communicate to others that he or she is an honest and upright person. The research focus provides added value by combining economic, legal and psychological theories and research methods, which have led to publications in the Journal of Cross-Cultural Psychology and Frontiers in Psychology. Between 2014 and 2016, Professor Hornuf also acquired and led a research project at the Fritz Thyssen Foundation on "How does authentic leadership affect the fraudulent behavior of employees?

Crowdsourcing is the term used to describe the outsourcing of activities that have traditionally been carried out by specially employed actors, usually internal employees of a company, to an indefinite and usually large group of people via an open call. A distinction is made between "Microwork" and "Online Freelancing". In case of Microwork, projects are broken down into very small tasks that can be completed in seconds or minutes. Online Freelancing is the outsourcing of professional services to crowdworkers, who usually have to possess relevant technical or professional qualifications. Crowdsourcing thus holds enormous potential for companies that want to have their tasks handled by crowdworkers at short notice and want to benefit from the creativity of a group of actors. For the crowdworkers, the new form of work also brings advantages, namely that they can make their daily work more flexible in terms of time and space. Due to the particularisation of their activities, crowdworkers may be structurally inferior to clients and platform operators when it comes to concluding contracts, even more so than conventional employees. The aim of the research project is to answer the question of whether the legal system in Germany and at European Union level provides suitable instruments and regulations for crowdsourcing as a new form of work in order to ensure an appropriate balance of interests, and to what extent legislative action is necessary. It is examined whether the contractual employee protection law applies or should apply to crowdworkers and which possibilities of collective representation of interests are or should be available to crowdworkers. The study is based on comparative findings with the legal situation in the USA, where the most comprehensive experience with the phenomenon of crowdsourcing exists and where the consequences of this form of activity for employees have become particularly visible. From an economic perspective, the study analyses the extent to which crowdworkers pursue an activity in order to secure their livelihood and which alternative objective functions they still pursue. In addition, we investigate how potential welfare gains are distributed among crowdworkers, platforms and crowdsourcers and whether crowdworkers take action against unfair treatment by the other two parties. The research questions will be answered using empirical and experimental economic research methods and comparative law will be applied. If the legislator enacts a German crowdsourcing law or a European crowdsourcing directive in the coming years, a comprehensive evaluation of the new rules will be carried out with the existing data. In 2017, Professor Hornuf acquired a three-year research project on this topic from the German Research Foundation (DFG) and is heading it.