Ideas for a Master thesis
Ideas for research
Coming up with an interesting area of research can be difficult if you have little experience. However, as soon as you become involved you see more and more areas where you might find something new. For a thesis, it is not a bad idea to take an article in an A-journal and think about replicating it with a different dataset. Generally these articles will use US-data. Try and find similar data and redo the analysis. You will invariably find that in this process you will make –different– choices leading to a different and thus original paper.
For inspiration you can browse the mailinglist at NEP. The mails are categorised by subject and going through the most recent ones will give you a good feel of what is hot and what’s not.
If, having given it sufficient thought, you think that you still do not have a proper idea for a thesis, I list a number of subjects below. As my own research is primarily empirical it will come as no surprise that the suggestions I list are empirical as well.
Financial firm focus
There is a substantial literature on the focus of firms and the resulting firm value. Earlier articles by Berger and Ofek (1995), Lang and Stulz (1994) and Servaes (1996) find that firms that are less focussed, have lower firm values. Later authors argue that this is primarily driven selection bias: firms that are likely to merge will have a lower value before the conglomerate is formed. A preliminary version of a mindmap about this literature can be found in Diversification MM. Most of the references in this Mindmap is given in the post Diversification references.
An interesting area would to examine whether European financial firms, who have traditionally been allowed greater leeway in entering different business lines compared to the US, show the same effects of focus on their value. An alternative would be to see if corporate governance arrangements affect the valuation: ie do newly appointed CEOs change focus (and thus valuation)?
Bank strategy
The financial services sector is becoming more and more international. Consolidation has so far been confined to country boundaries but lately the process seems to be speeding up as witnessed by the recent take over of the Italian bank Antonveneta by ABN Amro. In this light it seems timely to reexamine the literature about the motivation banks have to leave their home market. Traditionally, banks follow their clients but other business models have been used as well.
Networks and FDI
Network theory is coming of age and has been applied to for instance power grids and payment systems (see for instance Soramäki et al). These methods allow for a parsimonious description of complex systems. Data on the bilateral exposure of countries (broken down in various sub-categories) is available through the BIS or Worldbank and given this data the new network models could be estimated.
Other ideas
In addition to these relatively detailed suggestions, I would think that the following areas of research could be interesting, primarily because I am doing related research.
- Inflation expectations using survey data
- Internal capital markets
- Stress testing for credit risks
- Economic capital models for financial firms
If you have other ideas, do not hesitate to post a reply below.
