Department of Finance - ARC-funded Research Projects

Administering Institution: The University of Melbourne

Discovery Projects

Share Buybacks and Information Asymmetry: Winners and Losers

ARC Discovery Project DP0878537 (2007 for funding commencing in 2008)

This study is the first to examine the effectiveness of existing regulations governing share buybacks in Australia. The results will be important for understanding how domestic capital market regulation affects the international competitiveness of Australian companies through their relative cost of capital. It will also assist in ensuring that capital market integrity is increased through the optimal design of regulation and improved market transparency, and thereby encourage greater participation by investors. The results will assist regulatory agencies in designing market surveillance that identifies signs of insider trading or market manipulation associated with corporate capital management activities.

A/Prof CA Brown; A/Prof JC Handley; A/Prof AS Lamba
2008: $51,000
2009: $56,000
2010: $36,000
Primary RFCD Code: 3503 – Banking, Finance and Investment

Three Decades of Financial Distress and Corporate Restructuring in Australia

ARC Discovery Project DP0879459 (2007 for funding commencing in 2008)

Corporate financial distress is costly and disruptive to Australia's economy. While shareholders are the first to lose, the flow‑on effects include bankruptcies, unemployment, and a negative impact on economic growth. By analysing three decades of Australian experience we aim to gain a deeper understanding of the dynamics underlying financial distress and corporate restructuring. The potential benefits include improvements to corporate practice in responding to financial distress, improvements to ASX governance (regarding listing rules and transparency in particular for small‑capitalization firms), and ultimately to economic policy by elucidating the corporate sector's dynamic response across the business cycle.

Prof Dr P Kofman; Dr HW Chan; Prof BD Grundy
2008: $32,000
2009: $38,000
2010: $34,537
Primary RFCD Code: 3503 – Banking, Finance and Investment

Consumption, Financial Wealth and Housing Wealth over the Long Run

ARC Discovery Project DP0774407 (2006 for funding commencing in 2007)

Our research gives economic policymakers a better understanding of the linkage between housing and financial market fluctuations and economic stability in Australia. In this, it focuses on how long run social trends have helped or hindered macroeconomic stability. It promotes a deeper knowledge of consumption patterns across different age groups, with a focus on financial security of retirees. Finally, we make a basic contribution to basic research by developing new techniques for examining panel datasets.

A/Prof G Schwann; Prof GC Lim; Dr Q Zeng
2007: $73,000
2008: $59,983
2009: $61,028
Primary RFCD Code: 3503 – Banking, Finance and Investment

DISCOVERY ARC GRANTS AWARDED TO OTHER INSTITUTIONS WITH FACULTY CO-INVESTIGATORS


Storage and the Hotelling Valuation Principle: Understanding the Dynamics of the Oil Industry

ARC Discovery Project DP0770537 (2006 for funding commencing in 2007)

Understanding the economics of the oil market is important for understanding the shift toward smaller, more
fuel-efficient motor vehicles and less fuel-intensive farming techniques. A better understanding of fundamental oil price processes will lead to more accurate oil price forecasting and hence more accurate pricing of oil derivatives (options, futures and swaps) and improved risk management (e.g. airlines hedging the cost of their jet fuel needs).

Prof RA Heaney; Prof BD Grundy
2007: $100,000
2008: $115,000
2009: $130,000
Primary RFCD Code: 3402 – Applied Economics
Administering Organisation: RMIT University