The Role of Correlated Trading in Setting REIT Prices

This study investigates the role of correlated trading by individuals in setting equity real estate investment trust (REIT) prices. Consistent with existing literature, this study finds that there is a common element in correlated trades that drives both traditional closed-end fund prices and REIT prices. Perhaps more important, we find evidence suggesting that (1) the effects of correlated trading on REIT prices are stronger for those REITs that are hypothesized to be preferred by individual investors, and (2) this linkage is stronger when the REIT market is hot and exuberant; i.e., when the average share turnover in the REIT market is high.     

Short‐selling pressure and last‐resort debt finance: evidence from 144A high‐yield risk‐adjusted debt

This study examines why non‐financial publicly traded firms knowingly issue wealth destroying Rule 144A debt, which is associated with a negative announcement return and a higher yield. We provide a plausible ‘demand‐side’ explanation (i.e. last‐resort debt financing) for the motivation for issuing such debt. We also provide evidence as to what drives this negative reaction. Our findings suggest that the negative market impact is mainly driven by short‐selling pressure from convertible bond arbitrageurs.     

Japanese joint ventures with western multinationals: Synthesising the economic and cultural explanations of failure

Many research studies have been done to explain the reasons for the tensions and failures observed in joint ventures between Japanese and Western multinational enterprises. These studies have identified, with various degrees of sophistication, the existence of cultural differences as a primary determinant of failure. Alternative explanations focus upon a transaction cost approach, emphasising opportunism and the danger of cheating in such strategic alliances. This paper synthesises the literature through the development of a new conceptual framework. This framework, which distinguishes between economic and cultural reasons for failure, provides a new lens to view the literature. It is demonstrated that the simple view of cultural incompatibility needs to be replaced by an awareness of the combined impact of cultural and economic forces on the viability of joint ventures between Japanese and Western firms.Lee T. Brown is a doctoral candidate in the Faculty of Management at the University of Toronto. Alan M. Rugman is Royal Bank Visiting Professor at the University of Alberta and Professor of International Business at the University of Toronto. Alain Verbeke is Assistant Professor of International Business at the University of Toronto. Helpful comments have been received from Nancy Adler, Mark Casson, Martin Evans, Tom Roehl, Mark Warner and Ken Watson.     

Planning for dominance: a strategic perspective on the emergence of a dominant design

Researchers in technology and innovation, organization research, and product standardization in economics have noted that innovations may become the dominant designs in their product classes for reasons that may have little to do with design. The emergence process for dominant designs has typically been viewed as a black box process involving a sophisticated interaction of technological and non-technological factors. This paper shifts the discussion to a strategic perspective. It argues that firms can frame the emergence process and can systematically manage elements of it in the pursuit of competitive advantage from innovation. An analytical framework is developed and discussed, with particular emphasis on the roles of certain external conditions, non-technological forces, and complementary assets, as well as the implications for R&D strategists and for future research. Four distinctive examples illustrate different aspects of the framework's utility.     

Who is governing whom? Executives,governance, and the structure of generosity in large U.S. firms

We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is a strategic activity commonly managed through a specific, differentiated organizational structure—the corporate foundation—that formalizes and constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune 500 firms from 1996 to 2006 shows that characteristics of senior management and directors affect corporate philanthropic contributions. We also find that organizational structure constrains the philanthropic influence of board members, but not of senior managers, a result contrary to what existing theory would predict. We discuss how these findings advance understanding of how organizational structure and corporate leadership interact and how organizations can more effectively realize the strategic value of corporate social responsibility activities.