Call for proposals 2021

Long-Term Finance

Call for preliminary proposals
Sponsor: Foundation for the Advancement of Finnish Securities Markets
Submission Deadline: 28/02/2021

Theory and empirical work suggest that long-term finance is important for households, firms, and government and for the overall development of the economy. In recent years, technological and regulatory changes and an era of low interest rates and inflation have shaped the demand and supply of long-term finance. To foster forward-looking and cross-disciplinary academic research in this area, the Foundation for the Advancement of Finnish Securities Markets is sponsoring a two-stage process calling for grant applications on long-term finance in 2021. The process is designed to encourage researchers to engage in ambitious and innovative research with specific focus on features with potential to benefit securities markets that are essential for Finnish firms that operate in or plan to enter the global economy. The foundation will award only one full grant. The foundation has at this stage budgeted 100 000 euros for the call.

Application process
In the first stage the applicant (the team) must submit a letter of intent which should be at most 5 pages long. In the second stage, some three applicants with the most promising letters of intent will be invited to submit full research proposals (at most 15 pages) that outline the research questions to be addressed, methodologies to be applied, the data to be gathered (in the case of empirical or experimental work), and modeling framework (in the case of theory work). As much detail as possible on the research design and planned analyses to interpret the results should be included at this stage. At both stages, applicants are encouraged to briefly describe how they could possibly extend their research plan in follow-up research. All applicants invited to submit a full proposal will receive a grant of 3000 euros regardless of whether they receive a full grant or not.

Eligible topics
The topic of the proposal must be related to long-term finance and to the purpose of the Foundation, which is to support wide-range savings and investments in securities, creation of risk capital and advancement of the Finnish securities markets. Below are examples of subject areas and topics that fit in the call. The list is not exhaustive, i.e. also other topics that fit in the spirit of the call will be considered. Multidisciplinary, properly integrated proposals combining disciplines such as finance, economics, law, and sustainability are welcome.

• Long-term drivers of asset prices, e.g., persistent and transitory components in asset prices, and long-run effects of financial market anomalies
• Sustainability, e.g., climate change risk management and green financial products
• Pension finance, e.g., pension liabilities and pension institutions’ expected returns on assets
• Financial intermediation, e.g. role of technological and regulatory changes in channelling long-term finance
• Asset management, e.g. long-term effects of active vs. passive asset management
• Ownership structure, e.g. planning horizons and holding periods of different owner groups
• “Classic” corporate finance, e.g. debt maturity and capital structure

Researchers are encouraged to analyze how long-term finance affects financial or product markets. Examples of such analyses include its implications on trading volume, availability and cost of funding, agency costs, information asymmetry, information production, risk sharing, allocation efficiency, competition, and growth. Projects that address issues that will be relevant in preventing marginalization of Finland in provision of future financial services will be given priority.

Submission instructions
Authors should submit their letters of intent via the Foundation’s online system at by 28/02/2021.

Evaluation of submissions
The evaluation will be made based on the significance, coherence, and scope of the proposal and the expected success of its execution. Preference is given to proposals that address an important, clearly defined research problem rather than an array of loosely related research problems. Preliminary results are not prerequisites for a successful proposal, but they are welcome and will be taken into account in the evaluation. The letters of intent will be evaluated by the foundation’s scientific committee. The second-round submissions will be ranked by the internationally renowned expert, Professor Stefano Giglio, Yale University School of Management.