A New Paradigm of Financial Market Behaviour. The project contributes to the development of a newly emerging paradigm for describing financial market behaviour. It will model financial markets as adaptively evolving systems that are the outcome of the interaction of boundedly rational economic agents with heterogeneous beliefs. The new paradigm will seek to explain aspects of financial market behaviour not well explained by the standard finance paradigm. The project outcomes will be of benefit ....A New Paradigm of Financial Market Behaviour. The project contributes to the development of a newly emerging paradigm for describing financial market behaviour. It will model financial markets as adaptively evolving systems that are the outcome of the interaction of boundedly rational economic agents with heterogeneous beliefs. The new paradigm will seek to explain aspects of financial market behaviour not well explained by the standard finance paradigm. The project outcomes will be of benefit to financial market researchers and regulators by providing a better framework for understanding and managing financial market volatility.Read moreRead less
A Synthesis of Agency and Managerial Power Theories and Its Applications to Corporate Governance, Management Compensation, and Firm Performance. The existing models of corporate governance in economics and finance based on agency theory do not successfully portray all modern corporations. Thus the importance of a new and rigorous way to study corporate governance can be hardly exaggerated. This project will provide a synthesized theory of corporate governance and is expected to produce highest- ....A Synthesis of Agency and Managerial Power Theories and Its Applications to Corporate Governance, Management Compensation, and Firm Performance. The existing models of corporate governance in economics and finance based on agency theory do not successfully portray all modern corporations. Thus the importance of a new and rigorous way to study corporate governance can be hardly exaggerated. This project will provide a synthesized theory of corporate governance and is expected to produce highest-quality research publishable in top-tier journals. This will, among others, enhance Australia's standing as a knowledge nation. This project is also expected to contribute to the discussions on how to improve corporate governance and regulation of management compensation both in Australia and abroad. Read moreRead less
Chief executive officer pay, incentives, talent and risk-taking: Excessive pay, regulation and the global financial crisis. The Prime Minister has requested the regulators, APRA and Treasury, to come up with rules that would prevent a repeat of the trillion dollar bailouts and guarantees to the financial sector and banks at risk of failure. Excessive pay and risk-taking by bank executives shoulder made the blame for the global crisis that has already cost Australian investors and taxpayers a siz ....Chief executive officer pay, incentives, talent and risk-taking: Excessive pay, regulation and the global financial crisis. The Prime Minister has requested the regulators, APRA and Treasury, to come up with rules that would prevent a repeat of the trillion dollar bailouts and guarantees to the financial sector and banks at risk of failure. Excessive pay and risk-taking by bank executives shoulder made the blame for the global crisis that has already cost Australian investors and taxpayers a sizeable portion of the nation's wealth. The project will greatly assist the regulators in this task. It will also identify compensation practices that reward good long-term performance without excessive pay. This could dramatically raise the performance of Australian companies and ameliorate the problem of dissatisfied investors and taxpayers.Read moreRead less
The Role of Directors in CorporateTakeovers. This research deals with one of the causes and consequences of mergers and acquisitions (M&A) for boards of directors of companies involved in M&As. The Federal Government's Corporate Law and Economic Reform Program (CLERP), Paper No:3 states that corporate governance practices by Australian companies should be continuously monitored by the Australian Stock Exchange and relevant industries and professional bodies. Our research on the extent to which ....The Role of Directors in CorporateTakeovers. This research deals with one of the causes and consequences of mergers and acquisitions (M&A) for boards of directors of companies involved in M&As. The Federal Government's Corporate Law and Economic Reform Program (CLERP), Paper No:3 states that corporate governance practices by Australian companies should be continuously monitored by the Australian Stock Exchange and relevant industries and professional bodies. Our research on the extent to which directors get penalised and/or rewarded for acquisition decisions depending on the outcomes of the M&A, contribute towards this monitoring.Read moreRead less
Back door listings: from hot rocks to hot stocks. The purpose of this research is to explain the incidence, characteristics and performance of firms who engaged in back door listings in the late 1990s. A back door listings is a means whereby a private company becomes listed by a merger with a public corporation.
We are focussing on a research topic that has not been examined at all in academic research. This is despite the significance of the going public process and mergers. We will provide e ....Back door listings: from hot rocks to hot stocks. The purpose of this research is to explain the incidence, characteristics and performance of firms who engaged in back door listings in the late 1990s. A back door listings is a means whereby a private company becomes listed by a merger with a public corporation.
We are focussing on a research topic that has not been examined at all in academic research. This is despite the significance of the going public process and mergers. We will provide evidence on the performance of back door listings, and our results will be the basis of suggestions to market regulators and future researchers.Read moreRead less
Risk management policies and practices of major Australian firms. High profile corporate failures attributable to incorrect hedging strategies have recently drawn attention to corporate financial risk management, although its important role in financial management is far more ubiquitous and pervasive. The project will shed light on the internal processes of corporate risk management which previous studies have not addressed. It will produce a 'stock-take' of current practices enabling assessment ....Risk management policies and practices of major Australian firms. High profile corporate failures attributable to incorrect hedging strategies have recently drawn attention to corporate financial risk management, although its important role in financial management is far more ubiquitous and pervasive. The project will shed light on the internal processes of corporate risk management which previous studies have not addressed. It will produce a 'stock-take' of current practices enabling assessment against theoretical models and identification of current 'best practice'. Against this backdrop, Australian firms will be able to assess the merits of their current policies and practices, and assist corporate outsiders (regulators, analysts, researchers) in better understanding corporate risk management. Read moreRead less
Asset pricing with social interactions, adaptive learning, and differences in opinion. This project seeks to understand how social interactions and adaptive learning of investors affect asset prices in highly competitive and adaptive financial markets. It will develop an evolutionary asset pricing theory, novel empirical hypotheses and tests of financial market characteristics and provide implications for policy and market regulation.
Double auction markets with heterogeneous boundedly rational traders. The project will study limit order markets for the formation of security prices in modern exchanges, allowing heterogeneity and bounded rationality of the economic agents who will engage in various trading strategies. The model developed will be of interest to market participants seeking to design more efficient and transparent markets.
Risk Measurement for Large Portfolios under the Benchmark Approach. The measurement of risk for large portfolios, consisting of basic assets and derivatives, will play a key role in future risk management systems. Based on a new characterization of asymptotic portfolios this project proposes the development, implementation and testing of highly efficient new risk measurement methodologies suitable for portfolios with hundreds or thousands of instruments. Comparisons with standard and new simulat ....Risk Measurement for Large Portfolios under the Benchmark Approach. The measurement of risk for large portfolios, consisting of basic assets and derivatives, will play a key role in future risk management systems. Based on a new characterization of asymptotic portfolios this project proposes the development, implementation and testing of highly efficient new risk measurement methodologies suitable for portfolios with hundreds or thousands of instruments. Comparisons with standard and new simulation methods will demonstrate their superiority. The outcomes of this project will give the Australian industry and the industry partner a competitive advantage in the measurement and management of risk for large portfolios as superannuation funds or portfolios of banks.Read moreRead less
Large-Scale Simulation Methods for Measuring Financial Performance under the Benchmark Approach. All working Australians are now required to belong to superannuation schemes. Hence, the measurement of financial performance safely, efficiently, and over long time horizons is of particular importance to Australia. One outcome alone of this research will be the provision of a technology to optimize the long term performance of superannuation funds. More generally, the results will allow better dec ....Large-Scale Simulation Methods for Measuring Financial Performance under the Benchmark Approach. All working Australians are now required to belong to superannuation schemes. Hence, the measurement of financial performance safely, efficiently, and over long time horizons is of particular importance to Australia. One outcome alone of this research will be the provision of a technology to optimize the long term performance of superannuation funds. More generally, the results will allow better decision-making and integrated, strategic planning for financial institutions and insurance companies. An additional outcome will be global growth for the sectors of Australia's IT industry developing innovative simulation based hardware and software, since the new simulation methods have wide applicability.Read moreRead less