Tony Naughton

Naughton was an expert on trading strategies. In 2008 he published a paper in which he investigated the profitability of momentum investment strategies for the equities listed on the Shanghai Stock Exchange. He also investigated the role of trading volume to find out if it was related to stock returns. He detected substantial momentum profits during the period 1995 to 2005 and revealed that momentum was a pervasive feature of stock returns. This finding stood as a direct challenge to the validity of the efficient-market hypothesis, which has been discredited by the advent of the global financial crisis. In another study of trading strategies he examined the profitability of momentum and contrarian strategies for the equities listed on the Australian Stock Exchange by taking into consideration short-selling restrictions. He revealed significant contrarian profits and showed that it was a persistent feature of the underlying strategies.

Another area of Naughton's interest, to which he made a contribution, was corporate governance. In one study he focused on the emerging corporate governance reform in China to investigate the relationship between a range of board characteristics and IPO initial returns and long-term performance. He found evidence indicating that board size is positively related to short-term returns, while a positive long-run relationship existed between performance and the voluntary post-listing separation of the roles of CEO and chair of the board. His results suggested that at least some Chinese listed firms were actively and voluntarily moving towards better governance structures. In another study of corporate governance in China he examined the 2005 policy decision to change the status of non-tradable state and non-state shares into tradable A shares. He envisaged that over time all of these shares would be tradable and potentially transferred to foreign and domestic private sector investors and that those changes had the potential to alter the monitoring and control of the majority of listed firms that until then had been controlled by tightly held blockholders of non-tradable shares. He also studied how parties' formal contracts were underpinned by their ongoing relationship and how welfare changes as the legal system improved.

His work in international finance was no less impressive. In an award-winning paper he attempted to verify the exchange rate regime that China had been following since 21 July 2005 when a policy shift was implemented, presumably taking China from a dollar peg to a basket peg. He demonstrated that while a regime of simple and strict dollar peg had been abandoned, China was on a peg, as it was claimed officially. He suggested that China had shifted to some sort of a discretionary crawling peg against the U.S. dollar. This paper made a significant contribution to the literature on de facto and de jure exchange rate regimes and the problem of exchange rate regime verification.

Naughton held a number of adjunct/visiting positions. He was an adjunct professor at Universitas 21, Singapore, from 2004 until his death in 2013. He was also a visiting professor at the China Europe International Business School (CEIBS), Shanghai, a visiting professor at the Centre for Corporate Governance Research, University of Birmingham, an adjunct professor at the Centre for International Business Research, University of Wollongong, an adjunct senior lecturer at the Graduate School of Business, University of Sydney, a visiting fellow at the School of Banking and Finance, University of New South Wales, a visiting research fellow at Universitas Islam, Indonesia, and a visiting senior research fellow at the Department of Accounting and Finance, University of Birmingham.

Prior to taking his last position as the head of the School of Economics, Finance and Marketing at RMIT, he held several academic positions in a number of institutions. From 1997 to 2003 he was a professor of international finance and the head of the School of Accounting and Finance, Griffith University. He was a senior lecturer and the head of the School of Banking and Finance, University of New South Wales, from January 1995 to January 1997. During the period July 1987 to December 1994, he was a senior lecturer in finance at the Department of Management, University of Wollongong. He also held the positions of a lecturer in development finance at the University of Birmingham, a lecturer at the School of Social and Economic Development at the University of the South Pacific (Fiji) and a senior lecturer at the School of Accounting and Applied Economics, Leeds Polytechnic.

One area of corporate finance to which he made a contribution was initial public offerings (IPOs). In a study of IPOs in Australia he provided insights into the short and long-term performance of the IPOs for new economy companies in the period 1995 to 2000. He found that new economy IPOs provided high average initial returns to subscribing investors although there was evidence for severe overpricing. Another area of corporate finance to which he contributed was capital structure. In a study of the determinants of the capital structure of Chinese companies he demonstrated, by using the techniques of extreme bounds analysis (EBA), that some of the firm-specific determinants reported as important in previous studies might be fragile, in the sense that the sign and/or significance of the coefficients on these variables changed, depending on model specification (the variables included in or excluded from the model). For example, he found that although conventional cross-sectional analysis would lend support to the importance of tangibility and stock price performance, these two variables turned out to be fragile.

Naughton was a self-made person. Although he left home with nothing and dropped out of school at 16, he paid for his education by working multiple jobs and managed to become a certified accountant. Following his work as an accountant, he did an MBA at Bradford University and went on to become a lecturer at Leeds Polytechnic. At the age of 30, Naughton went to work at the University of South Pacific in Fiji, where he met his wife, Shahnaz. Soon afterwards came the proposal and they got married in 1986. They went back to Birmingham together before moving to Wollongong, Australia. It was in Wollongong where the couple had their two daughters, Sophie and Jennifer.

Naughton's professional experience was exclusively in accounting. During the period 1976-1982 he had his own auditing and accounting practice, Naughton & Co. Prior to that he had obtained auditing and accounting experience with Touche Ross and Morley & Scott Chartered accountants in Birmingham and London, specializing in the audit of banks and financial institutions.

Naughton started his academic and professional life as an accountant. In 1975 he obtained membership of the Association of Chartered Certified Accountants and he was elected as a fellow in 1980. Subsequently, he earned a Master of Business Administration (with a major in Financial Management) from the Management Centre, University of Bradford in 1980. At the PhD level he concentrated on banking and finance as he obtained his doctorate from the Department of Accounting and Finance, University of Birmingham, in 1995.

Tony Naughton (16 February 1952 – 16 July 2013) was a British/Australian financial economist who was the head of the School of Economics, Finance and Marketing at the Royal Melbourne Institute of Technology (RMIT) for over ten years immediately prior to his untimely death in July 2013. He was known for his research into finance and corporate governance and for his contribution to raising the research profile of the School of Economics, Finance and Marketing at RMIT. He was also known for the successful mentoring of a large number of students and colleagues who, as a result, climbed to the top of the academic ladder.

Naughton was born in Birmingham (England) on 16 February 1952, then he moved to Ireland at the age of five. He sought independence by leaving home at the age of 16 to undertake a number of jobs, working as a kitchen assistant, a chef, a DJ and a bar tender. He then went through a bit of a hippy phase, rocking the long hair, full beard, leather jacket and flared pants. Before his death he expressed his wish to go to the Glastonbury festival in England at some point in his life. He said that seeing Jimi Hendrix's final show was one of his most treasured memories. Naughton always had good taste in music.