The Finance section conducts research into asset pricing, household finance, corporate finance, quantitative finance and financial institutions.

Asset pricing is a branch of finance that explores the pricing of financial and real assets such as stocks, bonds, currencies, and real estate. It studies investor behaviour and identifies and examines asset characteristics and factors that affect risk, returns, and the relationship between them across assets as well as time. Additionally, asset pricing encompasses the study of macro-finance, market frictions, and international finance, offering a comprehensive view of the interplay between financial markets and the broader economy.

Main topics: Cross-sectional asset pricing, time-varying expected returns, macro-finance, international finance, bubbles, behavioural finance, machine learning in asset pricing

Household finance investigates the financial decision-making of private investors and households. It includes studying households’ saving, consumption, borrowing, and investment decisions in all asset classes. Research questions focus on how investors act and how they are affected by corporate decision-making, regulation, financial intermediaries, digitalisation, and/or fintech. It also factors in or directly addresses the role of behavioural and environmental factors in households’ decision-making. These decisions are analysed from a theoretical (normative) perspective asking the question of what households should do, and from an empirical (positive) perspective showing how households act in reality.

Main topics: Portfolio choice, investment behaviour, mortgage choice, financial literacy, behavioural finance, old-age provision, insurance, stock market participation

Financial institutions and intermediaries are central to the health of the financial system and work to ensure optimal capital allocation from lenders to borrowers. Research in this area studies the efficiency and effectiveness of the financial system and the role of important institutions such as banks, mutual funds, insurance companies, pension funds, and brokerage firms in allocating capital and facilitating risk sharing. This includes among other things regulatory aspects of the financial sector and the increased focus on implementing sustainable investment practices into (long-term) capital management. We also study fintech and its contribution to financial innovations in areas such as advice and screening. In addition, the research focuses on market microstructure issues such as price discovery, liquidity, and other issues related to trades and quotes data from public exchanges.

Main topics: Asset management, regulation, risk management, credit ratings, insurance, longevity risk, market microstructure, banking, fintech, mutual fund performance, financial advice

Corporate finance is a diverse and dynamic field of finance that explores the financial decisions businesses make and their impact on overall performance. From investment and financing to payout decisions, every move a company makes has financial implications, and any decision that affects the finances of a firm is a corporate finance decision. Research in corporate finance involves both theoretical and empirical work studying the interplay between these decisions and their outcomes. In addition, agents and institutions that influence these decisions or are affected by them – such as shareholders, employees, banks, regulatory bodies etc. – are also an integral part of the field and an active area of research.

Main topics: Bankruptcy and financial distress, behavioural corporate finance, capital structure, competition and antitrust, corporate governance, corporate investment, corporate valuation, dividend and payout policy, information economics, institutional investors, mergers and acquisitions, real estate, real options, risk management, strategic interaction, shareholder activism, structural estimation

Quantitative finance is a field within finance that uses mathematical and statistical methods to analyse financial markets. Applications to real market data is emphasised on a solid theoretical foundation. Typical research areas are within the modelling of derivatives securities, portfolio risk management, and fixed income analysis.

Main topics: Derivatives pricing and hedging, risk management, fixed income analysis, continuous-time finance, multivariate modelling, asset allocation, volatility, machine learning