Business Finance Research Group

Research

The Business Finance interdisciplinary research group activities are focused around the following three main areas.

Business Finance in Post-crisis Europe

The issues of debt and equity gaps, and, in particular, the current unwillingness of banks to lend to both smaller private enterprises (SMEs) and larger public firms on a long-term basis are very much at the forefront of EU governments concerns. The reluctance to lend is a manifestation of the phenomena of ‘de-leveraging’ and changes to bank regulations in the post-crisis period. At the same time, the economies of European Union countries are exhibiting declining productivity and competitiveness. The efficient reallocation of resources to higher-productivity firms thus remains one of the key challenges for European corporate sector. 

Private companies

Several members of the group are looking at SME finance in the post-crisis period. One study has found that the increased perception of risk in lending together with an overwhelming dependency by SMEs on banks for external financing has highlighted the importance of venture capital investments and crowd-funding as alternative sources of funding. Another study is examining how the terms and conditions of funding relate to changing macro-economic conditions and to changes in the nature of the relationship between banks and the SMEs. Other projects are investigating various aspects of transition from private to public companies and the changing nature of corporate governance of SMEs.

Public companies

The tighter regulation of European banks, together with historically low level of interest rates, have provided further impetus for the development of corporate bonds as an important source of funding for public firms in the EU. This resulted in the corporate bond market amounting to more than 55% of the total EU GDP in early 2010, compared to only 6% in 1999. In spite of the phenomenal growth and importance of this asset class, there is still a paucity of research on European corporate bonds. Utilising extensive data on EU corporate bonds, one study by members of the group examines the importance of various liquidity and credit risk measures. There is also on-going research on bond issuance and differences between callable and non-callable bonds and the implications of financial austerity on accounting and business valuation.

Doctoral research students

Doctoral research students are an important part of our group. Find out more about our postgraduate research degrees and current doctoral students.