Our research

This research area covers most topical issues in corporate finance and corporate governance, focusing on international and emerging markets.

Our research academics have published co-authored papers in many top-tier academic journals, in partnership with colleagues locally and internationally on various research projects.

Our current research work covers subjects that are diverse, topical – and sometimes controversial. They include investigations into:

• the effects of political connection and promotion
• government intervention
• regulatory decisions
• politician's  hometown favouritism
• anti-corruption campaigning
• CEO's personal experience
• corporate innovations
• CEO compensation and turnover
• bank lending and access to trade credit
• cash holding and investment efficiency
• initial public offerings (IPOs)
• ownership structure and family control
• board independence
• deleveraging and funding market liquidity

Mining and the export of natural resources are vital contributors to the Australian economy, and are highly dependent on economic growth expectations and climate change adaptation policies. This research network focuses on econometric models and their application to commodity, energy, weather derivative and carbon emission markets.

This research area aims to describe the complex behaviour and structure of these markets and to quantify financial and economic risks. Our research also measures the risks of climate-impacted hazards on the Australian economy and evaluates strategies for mitigation and adaptation to climatic change. Finally, it aims to relate the impact of renewable energy policies on Australian commodity and financial markets.

Research in this area is cross-disciplinary, drawing on finance, accounting, economics, management, ethics, psychology, financial literacy and linguistics to develop a greater understanding of human behaviour in financial contexts.

Using broad frameworks outside the traditional scope of economics and finance, we examine how humans behave within financial institutions and how individuals make decisions and interpret financial information.

Our  often groundbreaking findings are used to:

• inform regulation
• increase the resilience of financial institutions through improved governance and culture
• guide the design of more consumer-centric reports, products and services.

This research area provides insights into the performance, governance and strategic interactions of financial institutions, and the costs and benefits of regulating their activities. The Australian banking sector has experienced unprecedented growth and significant changes in the past 20 years, culminating in the 2018 royal commission into market behaviour and compliance, the implications of which are still being played out.

Current research projects investigate Australian bank capital and international bank regulation and governance, focusing on issues such as:

• bank capital and provisioning buffers
• implicit subsidies evident in bond spreads
• the impact of capital requirements on bank funding costs
• determinants and outcomes of bank risk governance in the post-crisis period
• the effects of diversification in banking organisations.

Professor Tom Smith and Professor Martina Linnenluecke, the Centre for Corporate Sustainability and Environmental Finance Director, are undertaking research to analyse and benchmark Australia’s climate change strategy and positioning in terms of its readiness to take advantage of a clean technology revolution, and to analyse what the revolution might look like and how it will evolve.

Scientific evidence points to the increasingly urgent need for action on climate change and investment in cleaner technologies on a large scale. This need for action coincides with emerging policy and technological developments that are already taking place.

The project aims to provide new decision-making frameworks for the timing and extent of investments in new technologies. Analysing Australia’s positioning and the coming clean technology revolution would benefit policy-makers, corporations and investors.

The study has shown that wealth creation from a transition to a clean tech economy will exceed $20 trillion.

Professor Tom Smith and Professor Martina Linnenluecke were successful in obtaining funding for the ARC Discovery Grant DP200102332 ‘The Effects of International Climate Policy on Financial Markets’. This project aims to develop and test a new methodology to determine the potential consequences of effective action on climate change for the asset values of fossil fuel firms. The project commenced in 2020 and will run for three years.

Our China Research Area is a world leader in applied business research with a focus on Chinese capital markets. It acts as a platform for collaboration by both local and international experts across academia, industry and government. Its goal is to foster innovative research and educational activities within the Department of Applied Finance’s perspective of business for the benefit of society.