Sample Selection Approaches to Estimating House Price Cash Differentials

We extend the literature on house price cash differentials in important ways. First, our paper is the first to employ methods to correct for sample selection bias, using both switching regression and propensity score matching of cash vs. non-cash transactions. We use selection models to produce price counterfactuals for cash and noncash buyers. We also include both average treatment effect and a propensity score weighted selection models. From the selection models, we find that previous studies likely overstate the cash discount. Results from counterfactual tests examining cash discounts suggest amplified cash discounts in areas with close proximity to an environmental hazard; and also a pricing differential based on CBG level income, with purchasers in high income areas more likely to pay a cash premium compared to market participants in areas with comparably lower income, where a cash discount is detected. These results provide useful insights for market participants including real estate appraisers, brokers, and buyers and sellers of real estate.     

The Limits to Artist‐Led Regeneration: Creative Brownfields in the Cities of High Culture

Despite the burgeoning literature on creative cities, seldom explored is the context of cities rich in cultural capital but more orthodox in their approach to preserving the autonomy of culture. This article discusses the status of artistic spaces occupying abandoned industrial premises (‘creative brownfields') in historic cities that traditionally shape their policies around prestigious cultural institutions (‘cities of high culture'). Based on comparative insights from St Petersburg and Lausanne, the article explores the relations and tensions between mainstream cultural governance and creative brownfields. While there is no lack of creative brownfields in these cities, their wider urban impact is found to be marginal; moreover, these sites represent dispersed instances of temporary occupations rather than situated clusters of creative actors. More than coincidental, this (lack of) spatialization is argued to result from a particular governmentality—that of high culture—which disregards, rather than promotes, spaces of alternative cultural governance. The article conceptualizes creative brownfields in cities of high culture as the ‘soft infrastructure' of cultural production, in contrast with those in ‘creative cities' as the ‘hard infrastructure' of urban production. The article also calls for a recognition of the local context of regulation and accumulation in understanding the cultural/urban interplay.     

Firms' Stakeholders and the Costs of Transparency

We develop a model of a firm whose production process requires it to initiate and nurture a relationship with its stakeholders. Because there are spillover benefits of being associated with a "winner," the perceptions of stakeholders and potential stakeholders can affect firm value. Our analysis indicates that while transparency (i.e., generating information about a firm's quality) may improve the allocation of resources, a firm may have a higher ex ante value if information about its quality is not prematurely generated. Transparency costs arise because of asymmetric information regarding the extent to which stakeholders benefit from having a relationship with a high-quality firm. These costs are higher when firms can undertake noncontractible innovative investments that enhance the value of their stakeholder relationships. Stakeholder effects of transparency are especially important for younger firms with less established track records.     

“Why did I do this?”: Understanding leadership behavior through a dynamic five‐factor model of leadership

Leadership theories referring to complex adaptive system theory (CAS) describe leadership as a dynamic process of interdependent, cooperating agents. However, research on leadership behavior focuses mainly on the leader as an influencing, active agent. This article offers a different perspective by focusing on factors that influence leadership behavior. A dynamic five‐factor model of leadership is introduced, which identifies (1) the leader's individual competence, (2) the group, (3) the organization, (4) the context, and (5) the immediate situation as all influencing factors on leadership behavior. To address the problem of the procedural nature of leadership behavior, the dynamic five‐factor model is combined with a scenario‐based approach. The scenario approach focuses on situational developments in a given context, whereby a previous situation influences a leader's behavior in the subsequent situation. By integrating the dynamic five‐factor model into a scenario approach, one can understand a leader's behavior in its procedural nature. The practical usability of the dynamic five‐factor model and the scenario approach was assessed in a leadership development program with 81 military officers. Structured feedback from participants indicated that the model and the approach were perceived as helpful and relevant for understanding leadership behavior.     

Board Determinants in Banking Industry. An International Perspective

This paper explores the factors influencing the board composition of an international sample of commercial banks over the period 1996–2006. After considering the dual role of the board as monitor and advisor, our analysis shows that no one board composition is optimal for the banking industry and that any such recommendation could harm bank governance. Our results suggest that more complex banks that have a low ownership concentration and are headquartered in a civil law country should have larger and more independent boards. Copyright © 2012 John Wiley & Sons, Ltd.     

Setting a fox to keep the geese — Does the comply-or-explain principle work?

The German Corporate Governance Code works according to the comply-or-explain principle. One of its recommendations was to publish the remuneration of the members of the executive board on an individual basis. We examine the characteristics of the firms that complied with the code requirement. Our results indicate that firms that paid higher average remunerations to their management board members were less likely to comply, whereas firms with higher Tobin's Q were more likely to comply. We also document a non-monotonic relation between ownership concentration and the probability of compliance that is consistent with standard corporate governance arguments.Due to the fact that the number of firms complying with the disclosure requirement was low, a new law was passed that mandates disclosure unless the shareholders' meeting (with a 75% majority) decides otherwise. We find that this “loophole” in the new legislation is exploited by smaller firms, firms with comparatively high levels of executive remuneration, and firms with concentrated ownership. We discuss the implications of our results for the effectiveness of the comply-or-explain regulation.     

The US financial crisis,market volatility,credit risk and stock returns in the Americas

We employ the multivariate DCC-GARCH model to identify contagion from the USA to the largest developed and emerging markets in the Americas during the US financial crisis. We analyze the dynamic conditional correlations between stock market returns, changes in the general economy’s credit risk represented by the TED spread, and changes in the US market volatility represented by the CBOE Volatility Index^® (VIX). Our sample includes daily closing prices from January 1, 2002 to December 31, 2015, for the USA and stock markets in Argentina, Brazil, Canada, Chile, Colombia, Mexico, and Peru. We first identify that increases in VIX have a negative intertemporal and contemporaneous relationship with most of the stock returns, and these relationships increase significantly during the US financial crisis. We then find evidence of significant increases in contemporaneous conditional correlations between changes in the TED spread and stock returns. Increases in conditional correlations during the financial crisis are associated with financial contagion from the USA to the Americas. Our findings have policy implications and are of interest to practitioners since they illustrate that during periods of financial distress, US stock volatility and weakening credit market conditions could promote financial contagion to the Americas.