Finance Research
We are home to academic experts in diverse areas of finance with a reputation for world-leading research, high-quality education and strong links to professional practice.
Research themes
Our research themes cover a wide range of finance topics. These range from from asset pricing to sustainable finance. We explore key financial challenges and address global issues like sustainability and innovation. Our work combines theory with practical insights. It improves understanding of markets, institutions, and decision-making.
Behavioural finance and experimental finance
We aim to provide a deeper understanding of why corporations and investors make the financial decisions they do. We examine topics such as:
- the disposition effect
- escalation
- house money effect
- investor emotions
- investor herding
- investor sentiment
- mental accounting
- reference points
(Y Ahmed, Duxbury, Gebka, Liu, Sewraj, Sollis, Xin)
Corporate governance and financial disclosure
We have expertise in:
- corporate governance
- ESG paradigms
- strategic earnings management
- corporate culture
- national culture
- leadership
- gender diversity/equality
- reputational risk
Our research delves into the measurement, determinants, and financial implications of disclosure practices. We investigate the factors influencing disclosure choices and their impact on corporate valuation and financial stability.
(Y Ahmed, Trinh, Xin)
Financial innovations and institutions
We have expertise in financial innovations and institutions, including in the context of:
- fintech and cryptocurrencies
- trust
- institutional environment
- risk management
- regulation and supervision
- market structure & competition
- efficiency and productivity analysis
- bank stability
- bank stress tests
- cybersecurity
Our research explores the transformative role of fintech. It has a focus on machine learning applications in finance, as well as crowdfunding and small business financing.
(Duxbury, Gebka, Papanikolaou, Sollis, Trinh, Xin)
Sustainable finance
Our expertise in sustainable finance includes:
- climate finance and risks
- nature finance
- responsible banking
- green bonds
- carbon market
- ethical investing
- greenwashing
- climate-related disclosures
- energy transition
- renewable energy investment
- just transition
- ESG
- green finance innovation
- disaster risk financing
- loss and damage
- inclusive green finance
- extreme weather risk and resilience
- Islamic social finance
- microfinance
- SDGs
(I Ahmed, Pathan, Trinh)
The Central Bank Digital Currency (CBDC) Academic Advisory Group (AAG)
Professor Darren Duxbury was invited to join the CBDC AAG. This was in recognition of his expertise in behavioural finance and in payment method behaviour.
The AAG is run jointly by HM Treasury and the Bank of England. Its aim is to provide expert advice during the design phase of the digital pound. The AAG will serve as a platform for knowledge exchange and research collaboration. The multidisciplinary group will provide a wide-ranging and nuanced view on key questions. The AAG will encourage diverse ideas, open debate and challenging perspectives.
Professor Duxbury was invited to present his research at the first formal meeting of the CBDC AAG in March 2024. His research focuses on ‘Behavioural Drivers of Intentions to Use Cash: UK Survey Evidence’.
Macroeconomic Implications of Transitions to Low-Carbon Energy in Vietnam
Dr Vu Trinh's project is funded by the Climate Compatible Growth (CCG) programme's Flexible Research Fund (FRF). It is scheduled to run from 2024 to 2025 and is in collobaration with researchers from France, the UK, the US, New Zealand, and Vietnam.
The project aims to provide evidence-based insights into the macroeconomic effects of the energy transition in Vietnam. It will hold a specific focus on the economic impacts of carbon pricing.
Domain-dependent diversification: the influence of gain–loss domain on correlation choice
Diversification is a fundamental risk-reducing strategy in many aspects of life. It is particularly important in the world of finance. Portfolio diversification can achieve superior risk-adjusted investment performance.
Professor Darren Duxbury worked with colleagues from Radboud University in the Netherlands. They conducted controlled experiments to select portfolios. The portfolios differed in asset correlation and, hence, diversification benefits in both the gain and the loss domain. They find evidence of domain-dependent diversification, both unconditional and conditional on benchmark portfolio preferences.
External engagement and collaboration
Our research addresses a wide range of current issues. As such, it lends itself to applications in the industry and policymaking. Our academic colleagues' maintain a rich network of connections to external stakeholders. Their expertise is highly valued. They provide academic insight and advise on many finance-related challenges.
International collaboration on sustainable finance
- Dr Periklis Boumparis, Newcastle University Business School
- Chris Florackis and Sushil Sainani, University of Liverpool
- Omrane Guedhami, University of South Carolina - Moore School of Business
A study on the effect of sovereign rating downgrades on firms' environmental, social, and governance (ESG) policies. Findings suggest that sovereign downgrades significantly impact corporate sustainability practices. This is more so the case:
- in countries with shareholder-centric orientation
- among firms with lower institutional ownership from countries with strong social norms
Estimating and forecasting skewness using affine stochastic volatility models
- Jiayu Jin, Newcastle University Business School
- Kevin Aretz, The University of Manchester - Alliance Manchester Business School
- Yifan Li, The University of Manchester - Alliance Manchester Business School; Lancaster University - Department of Accounting and Finance
This study derives an estimator of the skewness of an asset's discrete return over any time horizon. Simulations demonstrate the estimator is highly precise.
Based on options data, it best captures time-series variations in the risk-neutral conditional skewness of the S&P 500 index.
Earnings quality and counter-cyclical bank capital
- Dr Mamiza Haq, Newcastle University Business School
- Academics from Zurich and Dongbei
Counter-cyclical capital buffers are regulatory measures designed to ensure banks hold additional capital during periods of excessive credit expansion. This ongoing study examines whether differences in these buffers across countries explain variations in bank earnings quality. There are potential implications for:
- earnings persistence
- predictability of future cash flows
- future loan write-offs
- earnings management practices, such as benchmark-beating behaviour
- use of income-increasing abnormal loan loss provisions (LLPs)
IPBES Nexus Assessment
Dr Iftekhar Ahmed is a lead author for the Nexus Assessment with the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services.
IPBES is an independent intergovernmental body. It aims to strengthen the science-policy interface for biodiversity and ecosystem services. This contributes to the conservation and sustainable use of biodiversity, long-term human wellbeing and sustainable development.
Dr Iftekhar Ahmed
Dr Iftekhar Ahmed is an international expert in sustainable finance. He has extensive research and training in climate and inclusive finance for global development. Currently, he is a Lecturer in Sustainable Finance and the module leader for a module in “Green Finance and Sustainability”. His research has been published in leading international journals.
He's also contributed to a policy-relevant book chapter on "ASEAN energy policy", published by the Asian Development Bank Institute (ADBI). Additionally, he has been serving as a regular referee for several peer-reviewed journals.
Dr Mamiza Haq
Dr Mamiza Haq's research interest centres on:
- bank equity
- credit risks
- bank regulation
- capital adequacy requirement and market discipline
- bank competition and efficiency
- financial crises
- non-conventional banking (microfinance and Islamic finance)
Her research publications have appeared in international and Australian peer-reviewed journals. Dr Haq has received several competitive research grants. She is the Deputy Editor for Accounting and Finance and serves in the Editorial Board for Spanish Journal of Finance and Accounting.
Professor Darren Duxbury
Professor Duxbury is a global expert in experimental and behavioural finance. He publishes in world-leading, internationally excellent, academic journals. His interdisciplinary work is published in international journals across various disciplines.
Duxbury is the author of two invited review papers in the Review of Behavioural Finance. The publication is a research monograph on repeated financial decision making. It is presented regularly at international conferences.
