Rushing to Overpay: Modeling and Measuring the REIT Premium

We explore the questions of why Real Estate Investment Trusts (REITs) pay more for real estate than non-REIT buyers and by how much. First, we develop a search model where REITs optimally pay more for property because (1) they are willing, due to cost of capital advantages and, (2) they are occasionally rushed, due to external regulatory time constraints and internal incentives to deploy capital quickly. Second, using commercial real estate transactions, we find that the extant hedonic pricing models contain an unobserved explanatory variables bias leading to inflated estimates of the REIT premium. Third, using a repeat-sales methodology that controls for unobserved property characteristics, we derive more plausible estimates of the REIT premium. Consistent with our model, we also find the REIT-buyer premium depends on the size of the REIT advantage, the rush to deploy, and the relative presence of REITs in the market.     

Vested interests: how American and Chinese venture capitalists view essential management skills

This paper used semi-structured interviews with 11 highly successful venture capitalists from both the United States and China to examine perceptions of the essential nature of management skills for successful technology-based small-to-medium sized venture exits. Findings suggest American VCs appear to maintain a more global management perspective, whereas Chinese VCs appear to maintain a perspective that is more China-centric, or market specific, in nature. This divergence in perceptions of essential managerial skills offers an opportunity for the convergence of understanding of universal best practices. Implications for theory and research are discussed. Such an understanding may provide critical implications for successful exits from cross border ventures.     

A research agenda for improving national Ecological Footprint accounts

Nation-level Ecological Footprint accounts are currently produced for more than 150 nations, with multiple calculations available for some nations. The data sets that result from these national assessments typically serve as the basis for Footprint calculations at smaller scales, including those for regions, cities, businesses, and individuals. Global Footprint Network's National Footprint Accounts, supported and used by more than 70 major organizations worldwide, contain the most widely used national accounting methodology today. The National Footprint Accounts calculations are undergoing continuous improvement as better data becomes available and new methodologies are developed. In this paper, a community of active Ecological Footprint practitioners and users propose key research priorities for improving national Ecological Footprint accounting. For each of the proposed improvements, we briefly review relevant literature, summarize the current state of debate, and suggest approaches for further development. The research agenda will serve as a reference for a large scale, international research program devoted to furthering the development of national Ecological Footprint accounting methodology.     

Power, Self-regulation and the Moralization of Behavior

The perception of behavior as a moral or conventional concern can be influenced by contextual variables, including status and power differences. We propose that social processes and in particular social role enactment through the exercise of power will psychologically motivate moralization. Punishing or rewarding others creates a moral dilemma that can be resolved by externalizing causation to incontrovertible moral rules. Legitimate power related to structure and position can carry moral weight but may not influence the power holder’s perceptions of rules and general norms of behavior. Social identity theory suggests moralization could be promoted by a concern for shared, defining values. However, the tendency to moralize another’s behavior can be injurious to shared identity. We explored white-collar employees’ perceptions of several categories of noxious or deviant workplace behaviors and regressed these perceptions on the tendency to use legitimate, referent, or reward and punish power; social identity; and the interaction of social identity and power, in particular legitimate power. Only the tendency to influence others through punishment or reward predicted moralization. Alternative causal explanations for the findings were addressed through the absence of any relationships between punishment and reward power and perceptions of deviant behaviors as wrong, upsetting, or requiring punishment. We discuss these results in the context of self and social processes, the social construction of morals and power, and the impact of managers’ behavior on group or organizational ethics.     

Moderating Effects of Entrepreneurial Orientation on Market Orientation‐Performance Linkage: Evidence from Chinese Small Firms*

Literature revealed that an appropriate alignment between firm strategic orientation and market positioning is critical because of its impact on firm performance. The alignment is especially crucial for small businesses as a result of their limited resource base. However, studies have not adequately accounted for the joint effect of entrepreneurial orientation (EO) and market orientation (MO) on firm performance in different institutional environments, such as transitional economies. In this study, we examine the moderating effect of EO on the linkage between MO and firm performance among small enterprises in China. We have found that MO, alone and in conjunction with certain EO dimensions, is positively related to firm performance. More specifically, innovativeness and proactiveness have positively moderated the relationship between MO and performance. We discuss managerial implications and offer suggestions for future research.     

Raising the bar (7)

This editorial summarises the papers published in issue 13.1 so as to raise the bar in applied spatial economic research and highlight new trends. The first paper adopts a scale neutral approach to investigate the spatial mechanisms that cause regional innovation and growth. The second paper claims that population-weighting when calculating indices of regional inequality might lead to inconsistent outcomes. The third paper estimates the effect of distance between family residence and higher education institution on a student's academic performance, thereby accounting for endogenous regressors. The fourth paper shows an inverted U-shaped relationship between economic development at region of origin and the propensity to migrate using a multilevel approach. The fifth paper provides spatial econometric evidence of price competition between sellers of used books on Amazon.com. The last paper estimates a hedonic housing price equation and parameterizes the spatial weight matrix to determine how far back in time buyers, sellers and realtors are looking at the housing market.     

Impact of individual market orientation on selling and customer orientation

ABSTRACT

We analyze the direct effect of individual market orientation on selling orientation-customer orientation of corporate insurance agents licensed in an emerging market based on the data collected using a random survey of corporate insurance agents in the Life Insurance sector in India. The results indicated that individual market orientation had a significant relationship with selling orientation, but the intensity was weak. However, causal relationship between individual market orientation and customer orientation was moderate. Future research should focus on analyzing the influence of the dimensions of individual market orientation on employee commitment, loyalty and should analyze the moderating effects of various associated variables. The findings indicate that efforts should be made to generate market-oriented behavior among individuals to propel selling orientation and customer orientation.     

Raising the bar (11)

This editorial summarizes the papers published in issue 14(2) so as to raise the bar in applied spatial economic research and highlight new trends. The first paper deals with past and current challenges for regional science research. The second paper investigates whether people living in deprived neighbourhoods have less chance of succeeding in a job application. The third paper finds evidence that real estate firms can avoid price competition when market shares of their allies increase in the vicinity. The fourth paper is methodological: it considers a spatial autoregressive (SAR) model with heterogeneous coefficients and extensively analyzes the impact of this extension on the direct and indirect effects estimates. The fifth paper proposes an innovative method to estimate the elements of the spatial weight matrix in a spatial econometric model. The final paper is econometric–theoretical: it proposes a new generalized method of moments (GMM) estimator of the coefficients of a SAR model if the error terms are heteroskedastic of an unknown form.     

Economic policy uncertainty and firm tax avoidance

We find strong evidence that firms reduce cash effective tax rate when economic policy uncertainty heightens. Firms also engage in more aggressive forms of tax avoidance including long-term tax planning or shelters. Cash holdings attenuate the negative effect of policy uncertainty on cash effective tax rate, especially for financially constrained firms. The cash tax savings are retained for reinvestments rather than dividend payouts. Our findings suggest that policy uncertainty exacerbates external financing frictions, which in turn induces precautionary motives of tax avoidance.