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30-11-11
28th conference of the AFFI: Research is a collective effort
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The AFFI aims to promote academic research in finance in France and abroad. "The AFFI seeks to promote research in finance vis-à-vis the outside world and other universities," said Patrick Sentis, AFFI president and professor of finance at the University of Montpellier 1. According to Sheridan Titman, professor of finance at the University of Texas (Austin), one of the keynote speakers of the conference, "It is a widely recognized international conference."
Working Together
The first day of the conference was devoted to the papers of Ph.D. students. One or two senior faculty members were assigned to each group of three students. "It's an important time for them, and for us it's an opportunity to help them move forward," said Denis Gromb, professor of finance at the business school INSEAD, also a keynote speaker at the conference. "They learn to present their work in English and to receive feedback. Presentation of papers is critical – crucial. You never do research alone," he added.
International conferences allow finance researchers to meet, exchange ideas, enhance their respective research and introduce their work to the public. There are two main steps in conducting financial research: the first is confronting a problem facing a company or country, which may be difficult for the general public to understand; the second is communicating the results of research on the problem to the general public in order to explain the implications. "Research takes time. It's not unusual to take several years to unravel the root causes of an event, for example," Sentis said.
THE FINANCIAL CRISIS
Like the volcanologist who never learns so much as during a volcanic eruption, Prof. Gromb, a "financial crisis specialist," assembled a lot of material during the most recent financial crisis, which is still affecting many countries.
Prof. Gromb presented a paper on financial institutions' central role in how financial markets function. "I found Denis Gromb's presentation very interesting," said his fellow keynote speaker Sheridan Titman.
Prof. Gromb's major focus is on the central role of financial institutions in the functioning of financial markets (their ability to raise funds to run them) and their implications for how markets function (in terms of growth and contagion, for example). "This topic is not sufficiently studied," Prof. Gromb commented. "The implications affect even people who do not participate in financial markets, in terms of growth and employment. Look at how Greece has been severely affected by the subprime crisis."
In general, the standard model of financial markets does not take financial institutions and their consequences into account. Market imperfections, whose consequences can be seen in normal times, can become extreme in times of crisis, "in the case of contagion, for example," Prof. Gromb said. He is trying to understand the mechanisms by which these implications affect the people's well being, whether they are involved in the markets or not. "The ultimate goal is to understand what kind of economic policy can help avoid or reduce risk," he said.
Attending the Conference: Daniel A. Rettl - Vienna Graduate School of Finance
"I'm a doctoral student. I applied to present a paper at the 28th Conference of the AFFI. The program is very good. I presented 'Testing Dynamic Tradeoff Theory: Evidence From Rebalancing Points' for 20 minutes, and then I received responses and questions from the audience. The exchange that followed the presentation was very rewarding. It was a great opportunity for me to improve and clarify my research. It was also a good opportunity to expand my network of professional contacts."
To read the papers presented: http://affi2011.etud.univ-montp1.fr/international-meeting/complete-program/
