Responsible Finance Research Group

The research group has five main objectives :

• To propose academic and professional studies which can improve our understanding of the problems of our time, putting the accent on :

1. the aspects associated with the regulation of financial markets and institutions;
2. mechanisms for evaluating and recording financial assets for accounting purposes.

• To study the economic policies in emerging markets and their impacts on the various financial markets around the world made possible by the different transmission mechanisms
• To reflect on the tools to set in place in order to integrate the principles of social responsibility and ethics in the teaching of social sciences.
• To understand the principles of corporate social responsibility, the motivation behind socially responsible investments and the links between social responsibility and the financial and operational performance of companies.
• To encourage RBS students to take part in the group’s research.

Resarch group members

Why should Rouen Business School have a Socially Responsible Finance research hub ?

‘Explore new worlds, go forward as responsible leaders’ is the vision of RBS. The Socially Responsible Finance research hub embodies this vision by integrating the principles of social responsibility and ethics in its various research projects, as well as in the teaching given to students. This vision is also embodied in a meticulous risk assessment necessary for the formulation of our expectations concerning economic and social life and managerial decisions.

Over the last three decades, in the popular imagination, the world of finance has become associated with the words ‘scandal’, ‘speculation’, ‘bonus’, ‘aggressive management’ and, above all, ‘crisis’, both economic and social. Many observers agree that the negative impact that bad practice in the finance sector has had on the economy is not to be doubted, and this has become incontestable following the latest crisis.

Several examples of bad practice in the finance sector have been singled out for blame : financial institutions’ obsession with short-term profit, the excessive remuneration of directors – especially of banks, and of other players in financial markets, the disconnection between finance and the real economy, the opaqueness and complexity of financial markets, which put a brake on real investments.

The natural purpose of the hub’s studies is to mitigate this bad practice by improving our understanding of the world of business and the links which tie together investment, financing and social responsibility. They respond to questions which concern both fundamental and operational issues and they are therefore a tool for RBS, enabling it to contribute in a significant and responsible way to the debates its position obliges it to deal with. The hub is, then, an anchor for the school’s vision, raising its visibility, in its region and also at the national and international level.

The hub’s activities

In order to achieve its objectives, the hub’s activities comprise :

• Organising internal seminars (Brown Bag seminars) for members of the hub so as to share their contributions and encourage the creation of new projects ;
• Organising talks on the themes covered by the hub ;
• Organising, in the short term, a series of academic and/or professional seminars so as to raise the visibility of the hub’s research work ;
• Promoting collaboration between the members of the hub and other researchers in partner institutions ;
• Promoting the research work of the hub’s members by providing assistance, when needed, for participation in national and international conferences, or in collaborative projects in line with the hub’s objectives ;
• Promoting the participation of students in research projects : the ‘Research and data collection’ course ; research contracts could also perhaps be offered to students.

The hub’s research axes

The hub’s research work is grouped around four axes. These axes are constituted according to the methodologies used and/or the associated research themes. Collaboration within and between axes will be developed. The four axes are as follows :

1. Portfolio Management, Derivatives and Risk Management : Using the tools of financial mathematics, simulation and econometrics of finance, this axis groups together research projects on such varied themes as analysis of the performance of portfolio managers, studies of methods of fund management, evaluation of sophisticated financial products and credit derivatives (CDO and CDS), and the comparison of portfolio management methods (dynamic allocation or management by derivatives). Special markets such as interest rate derivatives and commodities are also among the interests of this research axis. The hub’s researchers enhance their expertise on the theme of risk management as much for portfolio managers (using derivatives) as for the banking sector (Basel agreements II and III)
   
   
   
    
2. Corporate Finance, Financial Accounting and CSR (Corporate Social Responsibility) : This axis groups together researchers with different social science profiles who use similar tools to study questions related to companies’ financial and non-financial decisions, to corporate governance mechanisms and the mechanisms for publication of companies’ results. More precisely, the important research questions for this axis are : What are the performances of the current system of corporate governance and how can the quality of governance be improved by proposing supplementary tools ? What is the impact of the IFRS accounting standardisation on companies ? How can sophisticated financial operations and products best be accounted ? The study of companies’ non-financial performance, in particular the corporate social responsibility aspect, is another research theme in this axis. The research interests for this theme are criteria for assessing CSR, measurement of the performance of socially responsible investments, the performance of socially responsible funds and the impact of CSR rating agencies on socially responsible investments.
   
   
   
    
3. Financial Intermediation : strategic behaviours and regulation : This axis groups together researchers working in the banking sector and/or in the microstructure of financial markets. Using such diverse methodologies as banking microeconomics, game theory and industrial organisation, this theme covers research focussing on questions concerning the very nature of intermediation activities, the regulation of banks, its role in the 2008 crisis and the resurgence of liquidity as a key factor in banking stability. The questions of the integration of information, the cost of derivatives transactions and the choice of optimal price setting mechanisms are important axes for this theme. Our expertise extends to questions of interaction between financial intermediaries and behaviour analysis, using empirical data obtained from market simulation games. The aim of this work is to improve the informative quality of prices, and thereby the transparency of financial markets.
   
   
   
    
4. Money Economy and Financial Economy : Research work concerns the financial and monetary problems specific to emerging markets. This covers : exchange crises, monetary reform, capital flows and global imbalance, demand for international exchange reserves, effects of imperfections and interconnections between financial markets, balance sheet effects, real equilibrium exchange rates. The methodology used is time series econometrics and panel series, developing non-linear econometric models.