To maximise its real-world impact, Deakin Business School (DBS) has focused its research into key areas. Here, we introduce one of our four themes – Capital Markets.
It’s easy to understand that for Australia to thrive in the 21st century, it needs to be underpinned by a healthy, sustainable, and resilient economy.
But what role does the finance sector play? As an area that’s often linked to perceptions of greed – or less-than-noble goals – can the interests of financial markets align with issues such as human wellbeing, social equity, and the environment?
The term “capital markets” generally describes markets that bring together buyers and sellers of stocks, bonds and currencies. However through the lens of DBS, it’s a theme that explores ways of harnessing financial markets to generate wealth and societal benefit.
This theme-aligned research and teaching focuses on the three areas: socially-responsible investing (how financial investments can be leveraged to achieve social change), financial innovation (how technology and policy changes affect market behaviour and social welfare), and holistic reporting (how companies can provide a more complete snapshot of their value and performance).
‘The vision is to use finance as an enabler of good instead of greed and it’s important that capital markets enable innovation and sustainability. For example, without financing we would not have had the rapid development of COVID-19 vaccines,’ says Theme Director Associate Professor Adrian Lee.
Deputy Director Dr Emma Li adds that more efficient capital markets also play a significant role in boosting innovation.
‘It helps people with ideas to become business entrepreneurs while also providing small businesses with the capacity to grow,’ she says.
Dr Li is one of several DBS researchers working on projects that align with the Capital Markets theme.
With a research background that explores “crowdfunding markets for social inclusion” and “peer-to-peer lending”, she says it’s research that can help redress a range of health, environment, and social problems.
‘For example, how can we improve funding into circular economy projects or affordable housing programs without government subsidies? How can we reduce wastage due to poor management of companies? What are the roles crowdfunding plays in the capital market? These are some of the questions are our researchers are working on.’
This includes work within DBS’s Impact Finance Hub (IFH) – a research cluster that contributes to understanding how capital markets are influenced by innovative technologies and global-sustainable growth by focusing on Sustainable Development Goals (SDGs) investment and financing, Fintech, and Islamic financing.
IFH member Professor Fabienne Michaux (Professor of Practice – Finance) is currently working with the United Nations Development Programme (UNDP) to build standards for socially-responsible investing. This involves working helping the UNDP develop Sustainable Development Goals (SDGs)-enabling practice standards for private equity funds and other asset classes.
In other areas, the Deakin Integrated Reporting Centre (DIRC) promotes reporting that not only reflects dollar profit and losses, but also environmental and social impacts, while in an industry and government partnership, Deakin has recently produced an important benchmarking report that highlights the growth and challenges within the impact investment industry.
Projects by individual DBS researchers are also contributing to the Capital Markets theme.
Research by Dr Robert Xiao (Senior Lecturer in DBS Department of Finance) focuses on the relationships between corporate social performance (CSP), financial market performance, mutual fund markets, and factors affecting stock market performance.
By developing frameworks and financial models to explain these links, it’s research that can provide direction and policy recommendations for global investors and regulators.
And in an industry-first, DBS socio-legal researcher Dr Nicole Johnston last year authored a comprehensive report highlighting the spiralling costs of strata insurance and the burden of government taxes, duties and levies – findings that have now been welcomed by high-profile members of the Australian government.
Leading the Capital Markets theme, Assoc. Prof. Lee and Dr Li say they’re looking forward to collaborating with colleagues, industry partners, and government organisations to explore the role that financial markets can play in generating social and environmental benefit.
‘These frontier research and industry connections can inform and improve our practice, providing leverage for DBS leverage to facilitate innovative and socially responsible education, as well as our broader community,’ says Dr Li.
Assoc. Prof. Lee describes it as research that shares knowledge about benefits for everyone.
‘With more efficient financing directed to the projects with environment and social impact, eventually each individual in the society will benefit through different ways. During this journey, our investigation and research outcomes can unveil the latest financial innovation and their social impact to the general public, while also assisting industry, practitioner, and government make more informed decisions.’