Riskiness of Real Estate Development: A Perspective from Urban Economics and Option Value Theory

In this article, we define a new construct for urban economic and investment analysis, which revisits the conventional wisdom that investment in real estate development is riskier than investment in stabilized property assets. This new construct, referred as a “development asset value index” (DAVI), is a value index for newly developed properties (only) in a given geographical property market. It tracks longitudinal changes in the highest and best use (HBU) value of locations, and it reveals developer and landowner behavior taking advantage of the optionality inherent in land ownership. In particular, the DAVI reflects developers' use of flexibility in the exercise of the call option to (re)develop the property to any legal use and density. We empirically estimate a DAVI for commercial property (i.e., central locations) and compare it with a corresponding traditional transaction‐price‐based property asset price index (PAPI) corrected for depreciation. We believe that the difference primarily reflects the realized value of flexibility in land development. We find that the DAVIs display greater value growth and are smoother over time and less cyclical than their corresponding PAPIs for the same locations. This suggests that developers successfully use flexibility, and that development may be riskier than stabilized property investment due primarily only to leverage effects (construction costs). Practical implications are also discussed.     

Researches in Corporate Social Responsibility: A Review of Shifting Focus,Paradigms, and Methodologies

Owing to the growing academic and practitioner’s interest in the field of Corporate Social Responsibility, there is a need to do a comprehensive assessment and synthesis of research activities. This article addresses this need and examines the academic literature on Corporate Social Responsibility and Performance using a paradigmatic and methodological lens. The objective of this article is fourfold. First, it examines the status of CSR research from its beginning especially after 1970 to year 2008 in leading academic journals and reports to assess the focus areas of research on CSR so far. Second, it analyzes the research paradigms adopted in these research articles using the Operations Research Paradigm framework. Third, it compares and contrasts various kinds of research articles, methodologies, and research designs used in various researches in literature. Finally, it uncovers the implications of this study and directions for future research.     

Order Flows,Investor Sentiments and Feedback Trade in Index Futures Market

This paper examines the presence of feedback trading, and investor sentiment drove feedback trading by traders in the Nifty 50 index futures contract in India. The results of the study using high-frequency data sampled at 10 min interval using VAR and contemporaneous VAR model as applied to market microstructure settings reveals negative evidence of feedback trade and investor sentiment-driven feedback trade in Nifty 50 futures contract. Further, consistency with noise trading hypothesis, order flows in Nifty 50 futures contract is less informative when traders are overly optimistic.

     

Adaptive capacity to technological change: A microfoundational approach

Research summary> : W e take a microfoundational approach to understanding the origin of heterogeneity in firms' capacity to adapt to technological change. We develop a computational model of individual‐level learning in an organizational setting characterized by interdependence and ambiguity. The model leads to organizational outcomes with the canonical properties of routines: constancy, efficacy, and organizational memory. At the same time, the process generating these outcomes also produces heterogeneity in firms' adaptive capacity to different types of technological change. An implication is that exploration policy in the formative period of routine development can influence a firm's capacity to adapt to change in maturity. This points to a host of strategic trade‐offs, not only between performance and adaptive capacity, but also between adaptive capacities to different forms of change . Managerial summary : W hy are firms differentially effective at adapting to technological change? We argue that firms differ in the adaptive capacity of the routines that underlie their capabilities. These differences arise well before change occurs, and result because firms build routines that are differentially responsive to signals of performance decline associated with technological change. Thus, early managerial efforts to build superior productive efficiency must be complemented by efforts to build superior adaptive capacity. Our theory suggests that managers can prepare for technological change by implementing policies, in the formative period of organizational development, that promote individuals' exploration of novel actions. However, there are trade‐offs because preparation aimed at building adaptive capacity to one type of technological change may limit adaptive capacity to other types of change . Copyright © 2016 John Wiley & Sons, Ltd.     

Predicting Internet banking adoption in India: a perceived risk perspective

The emergence of Internet banking has transformed the banking systems across the globe. As a channel to market, Internet banking allows geographical constraints to be overcome by offering various products and services at lower customer costs. An understanding of the factors influencing customer adoption of Internet banking is both relevant and timely. This study integrates technology acceptance model and perceived risk theory in understanding Internet banking acceptance among Indian bank account holders. Specifically, this study categorizes perceived risk as external risk and internal risk, and examines its influence on customer beliefs and adoption of Internet banking. Using two-step predictive analytics of structural equation modeling and artificial neural network analysis, the 270 responses reveal that both external risk and internal risk inhibit customer acceptance of Internet banking. More importantly, neural network analysis reveals that perceived ease of use and external risk are two important factors determining how well Internet banking is accepted by customers. The implications of the study findings and future research directions are presented.     

An intelligent and secure system for predicting and preventing Zika virus outbreak using Fog computing

Zika virus is a mosquito-borne disease that spreads very quickly in different parts of the world. In this article, we proposed a system to prevent and control the spread of Zika virus disease using integration of Fog computing, cloud computing, mobile phones and the Internet of things (IoT)-based sensor devices. Fog computing is used as an intermediary layer between the cloud and end users to reduce the latency time and extra communication cost that is usually found high in cloud-based systems. A fuzzy k-nearest neighbour is used to diagnose the possibly infected users, and Google map web service is used to provide the geographic positioning system (GPS)-based risk assessment to prevent the outbreak. It is used to represent each Zika virus (ZikaV)-infected user, mosquito-dense sites and breeding sites on the Google map that help the government healthcare authorities to control such risk-prone areas effectively and efficiently. The proposed system is deployed on Amazon EC2 cloud to evaluate its performance and accuracy using data set for 2 million users. Our system provides high accuracy of 94.5% for initial diagnosis of different users according to their symptoms and appropriate GPS-based risk assessment.     

Sustainability as corporate culture of a brand for superior performance

Sustainability research highlights new challenges and opportunities for businesses. This paper reviews the literature to understand the ability of sustainable green initiatives when practiced as a corporate culture to individually create new opportunities for operations, management and marketing. According to current research, business opportunities exclusively available to different functions of a firm can drive its performance. The role of marketing in the achievement of superior performance by virtue of sustainability practices is also explained by the existing literature. Branding literature, however, fails to explain the influence of a brand on sustainability-driven opportunities available to a firm for superior performance. The objective of this study is to explore if a brand can strengthen the ability of sustainability-based green initiatives of managers to drive opportunities available to a firm for superior performance. A conceptual framework grounded in the triple bottom line theory is presented based on the assumption that brand as a stimulating factor can accelerate the conversion of opportunities available to a business into superior performance. Academic and managerial perspectives have been used to draw upon the implications of the model. Both practitioners and academic researchers will benefit from future research on this topic.     

On the size distortion of tests after an overidentifying restrictions pretest

In the linear instrumental variables model, we provide theoretical and Monte Carlo evidence for the size distortion of a two‐stage hypothesis test that uses a test of overidentifying restrictions (OR) in the first stage. We derive a lower bound for the asymptotic size of the two‐stage test. The lower bound is given by the asymptotic size of a test that rejects the null hypothesis when two conditions are met: the test of OR used in the first stage does not reject and the test in the second stage rejects. This lower bound can be as large as 1 ? ε_P, where ε_P is the pretest nominal size, for a parameter space that allows for local non‐exogeneity of the instruments but rules out weak instruments. Copyright © 2011 John Wiley & Sons, Ltd.     

THE IMPACT OF LABOR MARKET REGULATION ON EMPLOYMENT IN LOW‐INCOME COUNTRIES: A META‐ANALYSIS

Controversy over labor market policy often centers on achieving a balance between preventing worker exploitation, and avoiding loss of productivity or employment through excessive regulation. Although the literature documenting the impact of labor market regulation on employment is extensive, there is a dearth of evidence on the impact of such policies in low‐income countries (LICs). Since it is easier for workers, especially women, to slip into the informal sector in LICs, regulations are likely to have stronger impacts on formal employment in these countries (but lower impacts on unemployment). We systematically reviewed available research from countries that are, or were until recently, LICs. Most studies document that more stringent labor regulations are associated with lower formal sector employment and higher informal sector employment. We also conducted a metaregression analysis of the impact of minimum wages on formal and informal employment. After controlling for publication bias, higher minimum wages are associated with lower formal employment and a higher share of informal workers.     

A note on a semiparametric approach to estimating financing constraints in firms

In this paper, we present a novel approach to modeling financing constraints of firms. Specifically, we adopt an approach in which firm-level investment is a nonparametric function of some relevant firm characteristics, cash flow in particular. This enables us to generate firm-year specific measures of cash flow sensitivity of investment. We are therefore able to draw conclusions about financing constraints of individual firms as well as cohorts of firms without having to split our sample on an ad hoc basis. This is a significant improvement over the stylized approach that is based on comparison of point estimates of cash flow sensitivity of investment of the average firm of ad hoc sub-samples of firms. We use firm-level data from India to highlight the advantages of our approach. Our results suggest that the estimates generated by this approach are meaningful from an economic point of view and are consistent with the literature.