The Finance group at Cambridge Judge Business School covers a broad spectrum of issues in finance. We define finance as more than a set of financial transactions – it is the glue that holds together corporations, capital markets and the real economy.
We pursue research on empirical and theoretical corporate finance, asset pricing, and financial accounting as well as the intersections of finance and economics. In doing so, we treat finance as both an art and a science.
Professor Raghavendra Rau talks about the Finance pathway.
Hello. My name is Raghu Rau, and I’m the Head of the Finance and Accounting group here at Cambridge Judge Business School. Finance is actually an area which deals with four different groups of people.
We are looking at investors. Investors are people who give money to corporations and to reinvest in investment project and so on. We’re looking at corporations who take money from individuals and use that to invest in different types of projects. We have financial intermediaries, who sit between the corporations and individuals trying to make sure they have the best match between projects which the companies are offering and the individuals who want to invest in these projects. And finally, you have government and regulators who make sure the whole process is fair.
Here at Cambridge Judge Business School, we focus mostly on corporate finance. So in particular, we look at empirical corporate finance. What that means is most of our research uses actual data from companies. We look at why companies use particular types of financial policy.
We look at why individuals make certain types of decisions, whether they do this rationally, whether they’re driven by behavioural biases, and so on. We look at what conflicts of interest might make financial intermediaries advocate one type of action rather than another, for example, why they might ask firms to issue equity in place of debt and other factors like that. Overall, our focus is on trying to get actual data, hard data, which tells us exactly– allows us to get at the truth, allows us to figure out what it is that individuals, managers, and financial intermediaries are really thinking when they make financial decisions.
A lot of the data we use comes from deep engagement with companies. So in fact, here at Cambridge Judge Business School, we engage a lot with individuals who are at high level positions at firms. And because we are the University of Cambridge, we have been able to get access to a lot of unique data sets, which are not available typically at most universities across the world. And we use these to answer these types of questions.
What type of student are we looking for? Basically, someone who is interested in finding out the truth. The problem with industry is that you cannot really spend much time digging into to issues and figure out what is really going on.
We don’t just have the time. You need to talk to your clients. You need to talk to your company. These are short-frame, short-term projects, which typically last more than less than about three to six months.
Three to six months is a very, very short time for an academic. If you’re interested in truly figuring out how things work, you really have to go in-depth into these matters. And that might take a year, maybe two years. At the end of the day, we’re looking for someone who is at heart interested in the truth, someone who is, well, for better words, an academic.