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The Finance PhD pathway

Introduction to Finance

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.

Watch Professor Raghavendra Rau talk 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.

Essential reading

The Finance PhD pathway

Download detailed information about the nine-month + four-year programme structure & content.

To start on the Finance pathway you must take one of the following nine-month masters programmes:

Research areas

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. On the one hand, we aim for methodological rigour through applying econometric methods and theoretical tools from contract theory and financial economics that enable us to infer causal statements about the way the world works. On the other hand, all our efforts are directed at shedding light on questions that we, and businesses in the real world, deem to be interesting and important at this time. 

These questions can move above and beyond our everyday understanding of finance. For instance, economists have acknowledged the important role of financial intermediation for growth and welfare. One important component of this research agenda is analysing the ‘black box’ that is financial institutions. Several faculty members at the School work on topics and publish papers related to the study of commercial banks, investment banks, universal banks, mutual funds, hedge funds and other providers of financial services. 

However, our research is not confined to this area. Market failures and inefficiencies don’t just occur between financial institutions and those seeking their services (most notably corporations) – they can also be the result of what is happening inside firms. Another set of research topics analyses how firms actually work – how are compensation contracts written, and why do companies pay bribes to politicians? A third set of research questions analyses investors that invest in firms through a set of financial intermediaries. How do these investors understand risk? Can managers and intermediaries consistently fool them into paying too much for securities or assets? We pay close attention to human decision-making and behavioural anomalies, both of which also apply to the broader context of capital markets and financial accounting. 

Our faculty and PhD students attempt to contribute to this exciting debate by conducting cutting-edge research on the multi-faceted linkages between investors, intermediaries and corporations. While our questions are academic in nature, we strive for solutions that can inform the practice of finance, and we incorporate this spirit into our teaching and other classroom interactions.

What you can expect from the PhD pathway in Finance

When you join the programme, you will be treated as a junior colleague rather than a student. The Finance Group will work with you and train you to become an independent researcher with a research programme and portfolio of academic papers that will help guide your success in the academic job market for faculty positions at the best business schools around the world. You will work with the faculty on joint research projects for potential publication in leading academic journals. In addition to a series of courses focused on research methodology and the foundations of the discipline, you will be exposed to research seminars given by top researchers in the field. We enable close interactions not just through participation and supervision in the Finance Group but also with other researchers through seminars, meetings with speakers and the organisation of research visits at some of the finest finance departments outside of Cambridge. All students are fully funded during their years on the programme.

What are the advantages of our Finance PhD over other programmes elsewhere?

There are numerous PhD programmes on offer around the world, so why should you opt for the programme at Cambridge Judge? You’ll find that we have several major advantages. Our programme is closely integrated with the rest of the University of Cambridge, meaning that you have easy access to researchers studying a huge variety of topics at a world-class level. The Finance Group has also established a number of specialised interdisciplinary centres, which offer access to unique data that is found nowhere else in the world. Two examples of these are the Cambridge Centre for Alternative Finance (CCAF) and the Centre for Endowment Asset Management (CEAM). CCAF is directed by leaders from the Finance subject group and the departments of Geography and Sociology and is currently in the process of populating the largest database in the world of transactions that take place outside the formal financial market. So far, it contains individual loan-level data for over a million peer-to-peer transaction in the UK alone. This unique dataset is currently hosted at the School, and access to it is restricted to students at the University. CEAM is also home to exclusive data on the holdings of extreme long-horizon investors, such as college funds and sovereign wealth funds. Each centre hosts a number of postdoctoral students and has an active research programme.

What we expect from our PhD students

We welcome applicants from highly regarded universities that have earned an undergraduate and possibly a first graduate degree in financial, mathematical or business economics and performed within the top five per cent in their class; please see the MPhil in Finance academic requirements or Master of Research (MRes) academic requirements for more detail. We expect our students to demonstrate a high level of commitment to an academic career in a business school – your academic preparation is key. 

Finance research is quantitative in nature. As such, we look for applicants whose backgrounds reflect quantitative and methodological rigour.

You will be allocated a principal supervisor within your pathway. A senior academic, often a Professor or Associate Professor, they will guide you through the programme, help you to succeed in the job market and assist you in gaining a faculty position at a leading business school. Your principal supervisor will take an active role in your research programme. During the PhD, they will assemble a group of faculty (your advisory committee), and members of this team will co-author papers with you.

For this pathway, view the research interests of these faculty that may serve as principal supervisor:

David Chambers.

Professor David Chambers

David Chambers researches investment management; financial history; endowment asset management; IPOs; law and finance.

Elroy Dimson.

Professor Elroy Dimson

Elroy Dimson researches investment management; financial market history; endowment asset management; sustainable and responsible investing.

Oğuzhan Karakaş.

Dr Oğuzhan Karakaş

Not available to take incoming PhD students in October 2023.

Oguzhan Karakas researches corporate governance; ownership and control; corporate social responsibility; private equity; dynamic investment strategies.

Andrei Kirilenko.

Professor Andrei Kirilenko

Andrei Kirilenko researches the intersection of finance, technology and regulation; fintech; asset pricing, data, and digital technologies; the design of automated financial markets and instruments.

Bart Lambrecht.

Professor Bart Lambrecht

Bart Lambrecht researches various aspects of corporate finance such as real options and investment under uncertainty; mergers and acquisitions; payout policy; managerial agency and the role of asymmetric information; bankruptcy; and the financing of firms; housing and household finance; bank lending and bank capital structure.

Bang Dang Nguyen.

Dr Bang Dang Nguyen

Bang Dang Nguyen researches corporate finance; empirical finance; corporate governance.

Raghavendra Rau.

Professor Raghavendra Rau

Raghu Rau researches empirical corporate finance; empirical behavioural finance. (Visit Raghu’s personal website for more details)

Pedro Saffi.

Professor Pedro Saffi

Pedro Saffi researches security lending markets; short selling; liquidity risk; and how differences of beliefs affect trading volume.

Lucio Sarno.

Professor Lucio Sarno

Lucio Sarno researches empirical asset pricing; international finance, and especially foreign exchange markets; macro-finance; microstructure of financial markets.

Learn more about the faculty that teach on this pathway