Chandra Thapa is a reader (associate professor) in accounting and finance at Strathclyde Business School in Glasgow. He’s a visiting professor at EM Strasbourg this year. We asked him a couple of questions about his research field and his most recent achievements.
Could you tell us more about your professional background?
After completing the PhD program at Cranfield School of Management, I held a lectureship position at the University of Stirling for two years. I joined Strathclyde Business School as a lecturer in finance in 2012 and currently work as reader (associate arofessor) in finance. My research interests cover environmental, social, and governance corporate financial risks.
Before starting my academic career, I worked in the banking industry for over ten years. At the time I was already giving classes and writing articles for business newspapers, hence the natural shift to academic research.
What are your main research topics?
My main area of research is environmental, social, and governance (ESG) corporate financial risks. We aim to assess the risks arising from considerations. We look at how they can affect the financial strategies of corporations but also the capital market when these risks are brought to light. Therefore, uncovering the links between these risks is crucial.
So far, I have been focusing on the governance side, but recently I looked more into the social and environmental aspects particularly related to the risks that firms can face and how they are linked so that we can decide to either sever or strengthen those connections. For example, if a firm gets engaged in corporate social responsibility (CSR) activities, is it going to be rewarded by the capital market and what type of investment may result from it? This type of studies can help change corporate attitudes but also design policies and regulations needed to have a long-term positive impact in the social and environmental areas.
What is – according to you – your most significant contribution to research in terms of results?
I have many projects I am proud of, so it’s very difficult to single out one or two. But, I can give you a couple of examples.
A few years ago, one of my projects on governance was funded by the National Stock Exchange of India. It was taken on board for policy purposes and published in the form of a white paper. The focal point of this study was to observe the relationship between governance and risk-taking. Risk-taking implies increasing investment which can lead to higher capital growth and then a higher employment rate. We showed it can have a real impact on the quality of life index.
And more recently, I published with some colleagues a paper on climate finance where we looked at how investors would react (positively or negatively) when firms are exposed to extreme weather conditions like drought and flood. And especially if they are reacting negatively, we recommended that the government come up with regulations or policies to ensure that the impact on real growth and economic activities is mitigated.
In your opinion, what are the most promising fields of research in finance these days?
I think green finance is a very topical field of research at the moment. In brief, green finance is any structured financial activity that’s been created to ensure a more sustainable outcome. It encourages the development of green projects or minimizing the impact on the climate of more regular projects. For example, the vegan industry is growing increasingly and creating a real sense of enthusiasm among investors about it.
So, it is part of our job as social scientists to uncover the links between the financial risks that arise in these new projects and provide crucial information to investors and regulators about it. I really believe this is a very important area of research: it has the potential to have a tangible impact.
What advice would you give to PhD students or young professors?
I would advise them to spend their time in research fields that have a real impact on society. In my experience, focusing on social and environmental topics is more rewarding than thinking only about publications and career advancement. And since studies about these areas of research are increasingly in demand, your work will consequently get attention from international peer-reviewed journals.
I think they should also strive to develop their methodological skills by learning new innovative methods, especially quasi-natural experiment methods in finance. It can give them a competitive edge that will increase their chance of being published and accepted by really high- impact journals.
Thank you very much for taking the time to answer our questions!