The Value of Research in Corporate Finance

Finance is a vast field with many subjects. The scope of research is immense and there is no limit to what can be done by students of this vast discipline. One of the subjects that carry immense scope for research is corporate finance. This is an aspect of finance that is under constant pressure from the various economic, regulatory, and political forces in this world. Therefore, there in an ongoing need for research in this field so that the policymakers can better shape their decision making and run successful enterprises.

One of the topics that researchers can consider is with regard to the availability of lines of credit in today’s economic and banking environment. Students can work on research that evaluates the decision making factors that lead companies to either use cash or lines of credit acquired from banks for financing their operations.

Corporate liquidity management is a very important topic. The very survival of companies depends on the easy ability of firms to turn their fixed assets to hard cash at any point in time. Regulators have placed strict restrictions on how companies and banks manage their finances. That is why companies need to invest in a variety of substitutes that can give them access to high cash flows at any given point in time.

Banks are far more stringent now with regard to lines of credit than they were a decade ago. The financial crisis and the rising tide of non-performing assets that banks are forced to deal with has meant that no longer to loan managers blindly sign on the dotted line. Stringent background checks are done and a company’s balance sheet is scrutinised from top to bottom before lines of credit are issued. Researchers can investigate what impact this has on the economy on the whole with regards to current day market situations. They can publish their work in an online journal.