Analysis of Credit Risks in Asset-Backed Securitization Transactions in Singapore

Asset-backed securitization (ABS) is a relatively new financial instrument in Singapore's capital market, which has been accepted by developers (originators) as an alternative source of financing. Credit assessment and rating requirements have not been imposed on the ABS bond issues. Default-risk evaluation has also been understated, if not omitted, in the process of structuring ABS deals. This is the first study that applies a theoretical default-risky swaps valuation model to evaluate credit risks in ABS bonds in Singapore. The Monte-Carlo simulation results, based on the Century Square shopping mall ABS case, show significant effects of the changes in rental volatility and default-free interest rate volatility on the default-risk premium of swap. More specifically, an increase in the rental volatility reduces the default-risky swap values significantly. However, an increase in the instantaneous default-free interest rate volatility increases the default-risk premium of swaps, and this effect is only observed in the high default-free interest rate volatility regime (above 20 percent). The results suggest that the rental dynamics of the securitized real estate are critical in determining the default risks of ABS deals. The fixed-rate (coupon yield) and floating-rate (rental cash flows) should therefore be adequately determined to reflect the default risks, which may be caused by the rental dynamics of the securitized real estate.     

Electronic and in-person service quality of hybrid services

The service industries have experienced dramatic changes in service delivery format because of fast-paced innovation in information technology. Hybrid services involve service deliveries through conventional and technology-enabled environments, each of which is complementary and non-interchangeable. However, limited research has examined consumer behavior in response to a series of relevant service episodes in different channels at different points in time. In other words, how customers perceive service quality at each service encounter and how the cumulative effect of these perceptions influences customers’ overall service value assessment and satisfaction remain unclear. This study addresses this research gap by investigating the sequential influence of e-service quality on in-person service quality in a hybrid service format in which interpersonal and computer-mediated services coexist but at different points in time. Empirical analysis shows that e-service quality directly and positively affects in-person service quality, which fully mediates the effects of e-service quality on perceived value and customer satisfaction. The sequence of service encounters matters because in-person service quality perception has a stronger effect than e-service quality on customer metrics. Cumulative quality perceptions significantly influence perceived value and overall customer satisfaction. Theoretical and managerial implications are presented in the discussion.     

Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms

This study aims to examine whether the compliance of environmental policies can sustain firm economic performance, and whether a timing issue is relevant to firm economic sustainability in pursuit of eco‐friendly efforts. Offering models predominantly based on the institutional theory, this study tests hypotheses using data from 284 companies in the electronics sector in Taiwan during the period from 1997 to 2010. The findings reveal that the execution of environment policies mostly improves firm economic sustainability and some joint green efforts can even strengthen such sustainability; however, firms aiming to sustain their economic performance should not hasten to undertake eco‐friendly efforts, implying that first movers may not be guaranteed firm economic performance. Thus, managers should carefully strategize their green efforts to comply with environmental policies, and execute them in due course to prevent disadvantages, such as market uncertainty and complexity of green practices, while conquering organizational inertia. Copyright © 2012 John Wiley & Sons, Ltd and ERP Environment     

Negative Externalities of Rail Noise and Housing Values: Evidence from the Cessation of Railway Operations in Singapore

The governments of Malaysia and Singapore reached a landmark agreement in May 2010 to end the operations of nearly 80‐year‐old railway lines and stations in Singapore. In our study, the cessation of the railway services operated by Keretapi Tanah Malaya (KTM), a firm owned by the Malaysian government, with effect from July 1, 2011 is used in a quasi‐experiment design to test the effects of the removal of train noise externalities on real estate values. Based on the nonlanded private housing transactions data from January 2005 to June 2013, we find that average prices for houses located within a 400‐m boundary from the railway lines increased by 3.5% relative to prices for houses located outside the 400‐m boundary after the cessation agreement has been announced. The removal of train noise externalities increases housing prices in the affected area by 13.7% on average in the postcessation period of the KTM railway services. Realized economic benefits associated with the railway services cessation were estimated at S$0.36 billion based on houses sold in the post cessation period of the KTM railway services.     

Antecedents of emotional attachment of social media users

Emotional attachment has been documented to be an effective basis for consumer loyalty behaviors in many contexts; however, not much has been offered for new service formats enabled by information technology. This study explores the emotional attachment of social media users in terms of personality traits of users and websites. Drawing on literature on brand personality and brand–self congruence, this research proposes that a match between user’s individual personality and the personality traits of the digital artifacts promotes affective connection to social media websites. The social media, to which the user becomes emotionally attached, therefore becomes part of one’s self-definition and representation in the digital world. Self-expressiveness is also investigated as a motivational driver that helps users form such an emotional bond. Individuals with higher motivation to express themselves are more likely to develop an emotional attachment to social networking sites, exhibit loyal behavior, and experience a stronger effect than self-website congruence on emotional attachment. Results of this research provide support to the proposed relationships. Theoretical and managerial implications are elaborated in the discussion.     

Activists’ Strategic Communication in an Authoritarian Setting: Integrating Social Movement Framing into Issues Management

Triangulating 18 in-depth interviews with activists and campaign participants, news coverage, and social media content related to the campaign “6,700 people for 6,700 trees,” this study integrates social movement framing theory and issues management framework to examine activists’ strategic communications in an authoritarian setting. Results indicate activists’ sophisticated use of framing strategies following different stages of the issue life cycle to legitimately form an issue and successfully manage the issue in order to achieve their goals. This study offers meaningful theoretical implications for examining strategic communication in social movement campaigns. It also discusses practical lessons for applying these strategies to foster social change in similar contexts.     

Gender,Sibling Order,and Differences in the Quantity and Quality of Education: Evidence from Japanese Twins*

Using information on 1045 pairs of Japanese monozygotic twins, we examined differences in education by considering both the years of schooling (quantity) and the reputation of the last attended school (quality). We found that a difference in learning performance at 15 years of age is one of the key factors determining the differences. We also found that a female eldest child in the family from the 1950s and 1960s birth cohorts averaged 0.54 years less schooling than did her ‘younger’ twin. However, for the same birth cohorts, a male eldest child in the family generally had access to higher‐quality education than his ‘younger’ twin. Nonetheless, as the Japanese economy matured in the 1970s and thereafter, educational differences between twins disappeared, regardless of gender and sibling order.     

Optimal Timing of Real Estate Investment under an Asymmetric Duopoly

This paper examines the sub-game equilibrium strategies for a duopoly real option model consisting of two firms with asymmetric demand functions. The relative strength of the firms is found to have significant impact on the firms’ equilibrium strategies. Preemptive strategies are critical if difference in strength between the two competing firms is relatively small. Short bursts and recession induced overbuilding are two outcomes in the asymmetric duopoly model. The model, however, predicts that the two phenomena occur in earlier phases of market cycles, rather than in the state of depression. In a depressed market with high volatility, the leader and the follower will both choose the waiting strategies. Construction cascade is, therefore, not an expected phenomenon in a depressed market in the asymmetric duopoly framework. Please forward your comments to the second author at rststf@nus.edu.sg. Your comments are appreciated. The authors wish to thank Stephen Cauley, Walter Torous, an anonymous referee, and participants in the Singapore–Hong Kong Real Estate Research Symposium on 14–15 July 2005 for their constructive comments and suggestions.     

Risk Attitude and Housing Wealth Effect

This paper examines whether the housing wealth effect—the consumption change induced by house price appreciation is dependent upon households’ attitudes toward risk. A simple theoretical model is introduced to highlight a negative relationship between the wealth effect and risk aversion. The paper empirically tests for this negative relationship, using data from the U.S. Consumer Expenditure Survey. The investigation involves two steps. In the first step, we make use of households’ demographics and their risky and liquid asset holdings to estimate risk aversion. The Heckman correction model is applied to address the issue of limited stock market participation. For the second step, we construct pseudo panel data through grouping households by their birth years and their predicted values of risk aversion, and then, we estimate the responses of households’ consumption changes to house price fluctuations by risk-attitude group. Consistent with the prediction of the theoretical model, the estimation results suggest a significant negative relationship between the housing wealth effect and households’ risk attitudes. Households, who are less risk averse, experience greater consumption changes in response to house price appreciation.