Value versus Growth International Real Estate Investment

We use office and retail properties return data for the United States and some Asia Pacific cities to ascertain the relative performance of value and growth investment strategies. The results reveal that value portfolios outperform growth portfolios. Furthermore, while the results show that risk varies over time, time‐varying risk analyses generally do not support the risk‐based explanation for the value premium. Similarly, conditional market regressions do not explain the value premium anomaly as all the alphas are positive and significant. Moreover, the results imply that naïve extrapolation of past performance could be a credible explanation for the value premium.     

Industrial Real Estate Investment: Does the Contrarian Strategy Work?

The superiority of the contrarian investment strategy, though well attested to in the finance literature, has received scant attention, if any, in the real estate literature. This study uses empirical industrial real estate investment return data from 1985Q1 to 2005Q3 for the US, and some Asia Pacific cities in order to ascertain the relative superiority of “value” and “growth” industrial real estate investments. The results show that “value” industrial property investment outperformed “growth” industrial property investment in all the holding periods under consideration. Furthermore the industrial property investments exhibit return reversal. This implies that the superiority of the contrarian strategy is sustainable. The results of stochastic dominance tests validate the relative superiority of “value” over “growth” industrial property investment. This implies that fund managers who traditionally have been favoring prime (i.e. growth) industrial property investment may have to reconsider their investment strategy if they want to maximize their return.     

Semi-nonparametric estimation of the call-option price surface under strike and time-to-expiry no-arbitrage constraints

We suggest a semi-nonparametric estimator for the call-option price surface. The estimator is a bivariate tensor-product B-spline. To enforce no-arbitrage constraints across strikes and expiry dates, we establish sufficient no-arbitrage conditions on the control net of the B-spline surface. The conditions are linear and therefore allow for an implementation of the estimator by means of standard quadratic programming techniques. The consistency of the estimator is proved. By means of simulations, we explore the statistical efficiency benefits that are associated with estimating option price surfaces and state-price densities under the full set of no-arbitrage constraints. We estimate a call-option price surface, families of first-order strike derivatives, and state-price densities for S&P 500 option data.     

Privatization of the Urban Land Market in Shanghai

After the initiation of the privatization program of land use rights in China, land markets began to rapidly develop. This is undoubtedly due to a market mechanism finally being established to allocate land according to economic principles. However, the socialist practice of planned allocation for land leaves behind a land use pattern that affects the privatization of land market to a certain degree. In this study, a major land market in Asia—Shanghai, China—is examined in order to ascertain how the merging of the old land use pattern and the new market system for land use rights produces both opportunities and constraints in the process of privatization.     

The impact of technological learning on NPD outcomes: The moderating effect of project complexity

The innovative status of an emerging market is largely attributed to the technological learning maturity of its finest multinational companies (MNCs). This study uses the information processing perspective to investigate the impact of inter-/intra-functional technological learning (knowledge acquisition, information distribution, information interpretation and organizational memory) of 105 project teams on new product development (NPD) outcomes (project success, development speed and product entry timeliness) across nine MNCs. Of the four technological learning dimensions, only organizational memory did not possess a direct relationship with any NPD outcome dimensions. This study further contrasts the above impact across varying levels of project complexity. Information interpretation and organizational memory contribute to project success for low complexity projects. Conversely, for high complexity projects, development speed is contingent on organizational memory.     

Correlation and Volatility Dynamics in International Real Estate Securities Markets

We study international correlation and volatility dynamics of publicly traded real estate securities using monthly returns from 1984 and 2006. We also examine, for comparison, the correlations among the corresponding stock markets. A multivariate dynamic conditional correlation model captures the time-varying correlation within the full period. We confirm lower correlations between all real estate securities market returns than those between the stock market returns themselves. Some significant variations and structural changes in the correlation structure happened within the sample period. We detect a strong and positive connection between real estate securities market correlations and their conditional volatilities. We also find the international correlation structure of real estate securities and the broader stock market are linked to each other. Our results have economic motivations regarding the potential integration of international real estate securities markets and the possibility of including information on changing correlations and volatilities to design more optimal portfolios for international real estate securities.

Impacts of Land Use Rights Reform on Urban Development in China

The opening of China's urban land market has seen a growing interest internally and internationally in land and real estate development. Due to the monopolized ownership of land, this interest brings in substantial income for the government. Because of this new source of income, governments at various levels are able to finance urban development to different extents. This paper examines the outcomes of the reform that created a market mechanism for urban land and real estate, and the correlation of urban developments with the land and real estate market.     

Bringing Employees Closer: The Effect of Proximity on Communication When Teams Function under Time Pressure

Some studies have assumed close proximity to improve team communication on the premise that reduced physical distance increases the chance of contact and information exchange. However, research showed that the relationship between team proximity and team communication is not always straightforward and may depend on some contextual conditions. Hence, this study was designed with the purpose of examining how a contextual condition like time pressure may influence the relationship between team proximity and team communication. In this study, time pressure was conceptualized as a two‐dimensional construct: challenge time pressure and hindrance time pressure, such that each has different moderating effects on the proximity–communication relationship. The research was conducted with 81 new product development (NPD) teams (437 respondents) in Western Europe (Belgium, England, France, Germany, and the Netherlands). These teams functioned in short‐cycled industries and developed innovative products for the consumer, electronic, semiconductor, and medical sectors. The unit of analysis was a team, which could be from a single‐team or a multiteam project. Results showed that challenge time pressure moderates the relationship between team proximity and team communication such that this relationship improves for teams that experience high rather than low challenge time pressure. Hindrance time pressure moderates the relationship between team proximity and team communication such that this relationship improves for teams that experience low rather than high hindrance time pressure. Our findings contribute to theory in two ways. First, this study showed that challenge and hindrance time pressure differently influences the benefits of team proximity toward team communication in a particular work context. We found that teams under high hindrance time pressure do not benefit from close proximity, given the natural tendency for premature cognitive closure and the use of avoidance coping tactics when problems surface. Thus, simply reducing physical distances is unlikely to promote communication if motivational or human factors are neglected. Second, this study demonstrates the strength of the challenge–hindrance stressor framework in advancing theory and explaining inconsistencies. Past studies determined time pressure by considering only its levels without distinguishing the type of time pressure. We suggest that this study might not have been able to uncover the moderating effects of time pressure if we had conceptualized time pressure in the conventional way.