Department of Banking & Finance

Do financial theories work before they are “discovered”? If theories are applicable in all eras, there is less chance that a given theory is the result of data mining. New research by Prof. Lyndon Moore from Monash Banking and Finance, along with Prof. Fabio Braggion and Prof. Joost Driessen from Tilburg University, examines six important investment strategies in the early 20th century. The authors find strong evidence of momentum in nine major markets. They also find evidence of the size effect, betting-against-beta, and the outperformance of low-volatility stocks. However, they find no evidence of long-term or short-term return reversals. This research has been published in the Review of Asset Pricing Studies https://lnkd.in/gNk9Ynyi

How do COVID-19 lockdowns shape behavioral traits essential for socioeconomic progress? A recent study by Dr. Leo Bao from Monash University's Department of Banking & Finance sheds light on how pandemic lockdowns influenced psychological and behavioral dynamics. The research uncovers that individuals who experienced lockdowns demonstrated: ✔️ enhanced interpersonal trust and honesty, but ❌ lower creativity The decline in creativity appears closely tied to reduced social interactions, particularly fewer communications with friends during isolation. This research highlights the profound psychological impact of prolonged social restrictions and emphasizes the vital role of social connections in fostering cognitive flexibility. Dr. Bao’s study calls for stronger support networks and innovative communication strategies to sustain well-being and creativity during extended periods of social distancing. This research, coauthored with Jingcun Cao, Lata Gangadharan, Difang Huang, and Chen Lin, has been published in the PNAS. Journal link: https://lnkd.in/gVBwStbE

Can AI advance gender equality in education? Gender discrimination in education hinders women's representation across various professional fields. However, new research suggests that artificial intelligence (AI) could be a powerful tool for creating more equitable learning environments. A recent study by Dr. Leo Bao from Monash Department of Banking & Finance demonstrates that AI-powered educational tools can help reduce the gender gap in learning outcomes. The research reveals that AI improves teaching outcomes for boys and girls and reduces the preexisting gender gap. This improvement stems from AI's information advantages, user-friendly design, interactive features, and the non-discriminatory nature of its instructions. This study, co-authored with Dr. Difang H. and Prof. @Chen Lin, is now published in Management Science. Journal link: https://lnkd.in/gUeQMHmd #AI #EducationEquality #GenderEquity #EdTech HKU Business School

Do sell-side analysts say “buy” while whispering “sell”? Research by Dr. Yushui Shi from Monash Banking & Finance reveals that analysts engage in "say-buy/whisper-sell" behavior, providing fund managers with private, more accurate insights than those shared with the general public in their official recommendations. Analysts have incentives to limit the informativeness of their public recommendations, even under government regulatory pressure. Moreover, because public recommendations do not fully reflect analysts' true beliefs about stocks, their performance serves as an imperfect measure of analysts' abilities and career prospects. This research, coauthored with David Hirshleifer and Weili Wu, has been published in the Review of Finance. Journal link: https://lnkd.in/eDKJhNzC Free access is available on SSRN: https://lnkd.in/eh4Jw4JX

We are hiring! Join the Department of Banking and Finance at Monash Business School and apply by 22 September 2024. Silvio Contessi Yulia Merkoulova https://lnkd.in/gR-YJy3V