Finance Dissertation Topics

When it comes to choosing a finance dissertation topic, students have a wide range of options to choose from. Here are some finance dissertation topics that students can consider:

1. The role of financial markets in the economy

2. The impact of monetary policy on financial markets

3. The efficacy of different financial instruments in different market conditions

4. A comparative study of financial markets in developed and emerging economies

5. The role of central banks in financial stability

6. The determinants of corporate financial structure

7. The effect of tax policy on corporate financial decisions

8. An analysis of the relationship between stock market returns and economic growth

9. The role of venture capital in financing start-ups

10. A study of the relationship between credit default swaps and the probability of default

1. The role of financial markets in the economy

Financial markets play a vital role in the economy by allocating funds from savers to borrowers and facilitating trade and investment.

They provide a platform for businesses to raise capital by issuing securities, and for investors to buy and sell these securities. This process of matching borrowers and lenders helps to ensure that funds are channeled to where they are most needed in the economy.

Financial markets also help to ensure that prices reflect the underlying economic fundamentals. They do this by providing a mechanism for buyers and sellers to trade assets and by providing information that helps market participants to form expectations about the future.

The efficient functioning of financial markets is essential for a well-functioning economy. When markets are not working well, it can lead to a misallocation of resources and economic inefficiency. This can in turn lead to slower economic growth and higher levels of unemployment.

The role of financial markets in the economy has come under scrutiny in recent years in the wake of the global financial crisis. There is a debate about how well financial markets are functioning and whether they are serving the needs of the real economy.

There are a number of reforms that have been proposed to improve the functioning of financial markets. These include measures to improve transparency and reduce the risk of market manipulation, as well as proposals to make the banking system more resilient to shocks.

It is essential that financial markets continue to function well in order to support the economy and promote economic growth.

2. The impact of monetary policy on financial markets

The monetary policy pursued by a country’s central bank can have a profound impact on financial markets. When central banks change interest rates or take other steps to influence the money supply, it can cause ripples in markets for stocks, bonds, commodities, and currencies.

For example, when the U.S. Federal Reserve raises interest rates, it typically leads to a stronger U.S. dollar. That’s because higher rates make U.S. assets more attractive to foreign investors, who then buy more dollars to buy those assets. The increased demand for dollars pushes up the currency’s value.

A stronger dollar, in turn, can weigh on stocks of companies that do a lot of business overseas. That’s because a stronger dollar makes their products more expensive in foreign markets, which can hurt sales and profits.

Central banks can also affect markets by changing the size of their countries’ money supplies. When central banks “print” more money, it can lead to inflation, which can erode the value of stocks, bonds, and other assets.

Investors need to be aware of the potential impact of central bank policy on financial markets. By understanding how policy changes can affect asset prices, they can be better prepared to make investment decisions.

3. The efficacy of different financial instruments in different market conditions

When it comes to investing, there is no one-size-fits-all approach. Different financial instruments will perform differently in different market conditions.

For example, bonds tend to do well when interest rates are falling, but they lose value when rates rise. So, if you're investing in bonds, you'll want to keep an eye on interest rates.

Similarly, stocks tend to do well in a growing economy, but they can be volatile in a recession. So, if you're investing in stocks, you'll want to monitor the overall health of the economy.

Ultimately, the best way to find success in investing is to diversify your portfolio across a variety of different asset classes. This way, you'll be able to weather any market conditions.

4. A comparative study of financial markets in developed and emerging economies

When it comes to financial markets, there are a lot of differences between developed and emerging economies. For one, developed economies have much more stable and efficient financial markets. This is because they have better developed institutions, more effective regulation, and more sophisticated investors. Therefore, when comparing financial markets in developed and emerging economies, it's important to keep these factors in mind.

One key difference between financial markets in developed and emerging economies is the level of development of the institutions. In developed economies, there are well-established institutions, such as central banks, that help to ensure the stability of the financial system. In contrast, emerging economies often have weaker institutions, which can lead to more volatile financial markets.

Another important difference is the level of regulation. In developed economies, financial markets are heavily regulated to protect investors and prevent fraud. In contrast, emerging economies often have weaker regulation, which can allow for more risky and speculative behavior.

Finally, another key difference is the sophistication of investors. In developed economies, investors are typically more sophisticated and have access to better information. This allows them to make better-informed investment decisions. In contrast, investors in emerging economies often have less information and may be more likely to make speculative investments.

Overall, when comparing financial markets in developed and emerging economies, it's important to keep in mind the different levels of development, regulation, and investor sophistication. These factors can have a big impact on the stability and efficiency of the financial system.

5. The role of central banks in financial stability

It’s no secret that central banks play a vital role in financial stability. But what exactly do they do to promote stability and how do they go about it? In this blog post, we’ll take a look at the role of central banks in financial stability and how they help to keep the financial system in check.

The first thing to understand is that central banks are tasked with ensuring price stability. This is because prices are a key driver of economic activity and if they become too volatile, it can lead to economic instability. To achieve price stability, central banks use a variety of tools, including interest rates, asset purchases, and reserve requirements.

The second role of central banks is to promote financial stability. This means ensuring that the financial system is able to function properly and that it is resistant to shocks. To do this, central banks conduct stress tests, issue regulations, and act as a lender of last resort.

The third role of central banks is to promote economic growth. This is because a strong economy is necessary for financial stability. To promote economic growth, central banks use a variety of tools, including interest rates, asset purchases, and reserve requirements.

The fourth and final role of central banks is to promote financial inclusion. This means ensuring that everyone has access to financial services and that the financial system is accessible to all. To promote financial inclusion, central banks conduct research, issue regulations, and provide financial education.

So there you have it – the four key roles of central banks in financial stability. By working to promote price stability, financial stability, economic growth, and financial inclusion, central banks play a vital role in keeping the financial system in check and ensuring that it works for everyone.

6. The determinants of corporate financial structure

There are numerous factors that go into a company's financial structure. The following are some key determinants:

1. The company's business model - A company's business model will have a big impact on its financial structure. For example, a company that relies heavily on debt financing will have a different financial structure than a company that relies mostly on equity financing.

2. The company's size - A company's size will also affect its financial structure. Larger companies will generally have more complex financial structures than smaller companies.

3. The company's industry - The industry in which a company operates will also play a role in its financial structure. Some industries are capital-intensive, which means that they require a lot of money to finance their operations. This will often lead to a different financial structure than companies in less capital-intensive industries.

4. The company's stage of development - A company's financial structure will also change as it goes through different stages of development. For example, a startup company will often have a very different financial structure than a mature company.

5. The company's geographical location - A company's geographical location can also have an impact on its financial structure. Companies in different countries often have different financial structures due to different regulations and tax laws.

6. The company's competitive environment - The competitive environment in which a company operates can also influence its financial structure. For example, a company that is in a highly competitive industry may choose to finance its operations with more debt in order to get a lower cost of capital.

7. The company's management team - The management team of a company can also have an impact on its financial structure. A management team that is experienced in finance and knows how to optimize a company's capital structure can make a big difference.

8. The company's shareholders - The shareholders of a company can also influence its financial structure. For example, a company that is owned by a large number of shareholders may have a different financial structure than a company that is controlled by a small group of shareholders.

9. The company's financial history - A company's financial history can also play a role in its financial structure. Companies that have a history of financial problems may be less likely to get financing from traditional sources such as banks.

10. The company's financial goals - The financial goals of a company will also influence its financial structure. For example, a company that is trying to grow rapidly may choose to finance its growth with equity rather than debt.

These are just some of the many factors that can influence a company's financial structure. The key is to understand how each of these factors can impact a company's capital structure and to make sure that the financial structure is aligned with the company's business strategy.

7. The effect of tax policy on corporate financial decisions

The tax code is always changing, and corporate America must keep up or face the consequences. Recent changes to the tax code have had a profound effect on corporate financial decisions, and companies are still scrambling to adapt.

The most obvious change is the corporate tax rate, which was slashed from 35% to 21% in the Tax Cuts and Jobs Act of 2017. This was a huge windfall for companies, and many have used the extra cash to buy back stock, pay down debt, and increase dividends.

But the tax code is more than just the corporate tax rate. There are a myriad of deductions and credits that companies can take advantage of, and the rules are always changing. For example, the new tax code eliminated the deduction for interest on corporate debt, which will have a big impact on companies that have a lot of debt.

All of these changes have made it more difficult for companies to make financial decisions. They must constantly monitor the tax code to make sure they are taking advantage of all the deductions and credits they are entitled to.

The tax code is always changing, and companies must adapt or face the consequences. The recent changes to the tax code have had a profound effect on corporate financial decisions, and companies are still scrambling to adjust.

8. An analysis of the relationship between stock market returns and economic growth

There has been a lot of debate in recent years about the relationship between stock market returns and economic growth. Some people argue that the two are closely linked, while others contend that they are not.

So, what is the truth? Are stock market returns really affected by economic growth?

The answer, it turns out, is not so simple. There is evidence to suggest that there is a relationship between the two, but it is not a perfect one.

For example, some research has found that when economic growth is strong, stock market returns tend to be higher. This makes sense, as businesses tend to do better when the economy is doing well.

However, there is also evidence to suggest that stock market returns can be higher when economic growth is weak. This may be because investors are betting that the economy will eventually rebound, driving up stock prices.

So, while there may be some relationship between stock market returns and economic growth, it is not a perfect one. No one factor is guaranteed to affect stock prices in a predictable way.

9. The role of venture capital in financing start-ups

Venture capital is a type of private equity financing that is provided by investors to small businesses and start-ups that are deemed to have high growth potential. Venture capitalists are typically looking for companies that have the potential to generate high returns through capital appreciation, rather than through dividends or interest payments.

Venture capital is often seen as a risky investment, as many start-ups fail within the first few years of operation. However, venture capitalists are typically experienced investors who have a good understanding of the risks involved. They will also typically provide additional support to the companies they invest in, such as advice and mentorship.

The amount of venture capital that is available to start-ups has increased significantly in recent years, as the industry has become more popular. This has made it easier for many high-growth companies to get the financing they need to get off the ground.

Venture capital is an important source of financing for start-ups, and can be a key factor in their success. However, it is important to remember that it is a risky investment, and not all start-ups will be successful.

10. A study of the relationship between credit default swaps and the probability of default

It has long been understood that there is a relationship between credit default swaps (CDS) and the probability of default (PD). This relationship is commonly referred to as the "CDS basis." In simple terms, the CDS basis is the difference between the CDS spread and the PD.

A number of studies have been conducted on this topic, and the general consensus is that the CDS basis is a good predictor of future defaults. In other words, if the CDS basis is high, the probability of default is also high.

There are a number of reasons why the CDS basis is a good predictor of future defaults. First, the CDS market is a leading indicator of credit risk. CDS spreads typically increase before a company's credit quality deteriorates. This is because CDS traders are constantly monitoring the creditworthiness of companies and are quick to react to any changes.

Second, the CDS market is much larger and more liquid than the bond market. This means that CDS traders have access to more information and are better able to price risk.

Third, CDS contracts are standardized, which makes them easier to trade and compare. This makes it easier for traders to find mispriced contracts and arbitrage them.

Fourth, the CDS market is less subject to manipulation than the bond market. This is because CDS contracts are typically traded OTC, away from the scrutiny of regulators.

Finally, the CDS basis is a good predictor of future defaults because it is based on market prices. CDS spreads are determined by the market, not by rating agencies or other third parties. This makes the CDS basis a more accurate representation of true credit risk.

The bottom line is that the CDS basis is a good predictor of future defaults. This is because the CDS market is a leading indicator of credit risk, is more liquid and transparent than the bond market, and is less subject to manipulation.