How Does a Development Moratorium Affect Development Timing Choices and Land Values?

This paper investigates how a development moratorium affects choices of development timing and land values in a framework where both the value of developed property evolves stochastically and the development costs are fully irreversible. We assume that a regulator initially announces that land is not allowed to be developed during a finite period of time in the future. A developer, thus, must decide whether to develop land before the timing ordinance is imposed, or after it expires. The development moratorium reduces the developer’s option value from waiting and, thus, accelerates development. We also use simulation analysis to demonstrate how the other factors that relate to the demand and supply conditions of the real estate market affect this accelerating effect.     

Equities of scope as merger incentives under capital regulation: narrow versus synergy banking valuation

The call options theory of corporate security valuation is applied to narrow-banking contingent claims of one bank, while the cap options theory is applied to synergy-banking contingent claims of another bank. This article investigates efficiency gains specified as equities of scope associated with the likelihood of the two banks involved in merger under capital regulation. We find that merger incentives are encouraged when the narrowing banking is conducted by the consolidated bank, whereas discouraged when the synergy banking is conducted. Raising bank capital requirement leads to an increased interest margin of the consolidated bank with the narrow banking valuation; however, to a decreased margin of the consolidated bank with the synergy banking valuation. An increase in the capital regulation reduces the merger incentives in the narrow banking valuation whereas increases the merger disincentive in the synergy banking valuation. These findings are consistent with the organizational theory that predicts a comparative advantage of narrow banking proposals in bank mergers.     

Mutually exclusive investment with technical uncertainty

A firm, which faces technical uncertainty as in Pindyck (1993) can choose between two mutually exclusive investment projects, Projects 1 and 2. The added option to exercise Project 2 makes the firm less likely to exercise Project 1. An increase in the degree of technical uncertainty, the investment rate or the investment value upon completion for Project 2 encourages the firm to exercise Project 2 by increasing the trigger level of the expected cost of Project 2. This, however, ambiguously affects the firm's incentive to exercise Project 1, as the firm would rather implement Project 1 (2) in a region where the expected cost of Project 2 is relatively high (low).     

Using integrated quality assessment for hotel service quality

In the age of growing foreign tourism, providing excellent quality service at hotels is increasingly more important. Service quality and customer satisfaction have gradually been recognized as key factors used to gain competitive advantage and customer retention. Most companies conducted satisfaction surveys of their customers, with a view of using analysed results to identify attributes of potential improvement. However, this kind improvement decisions on the attributes with a lower satisfaction level needs not to be appropriated. Thus, to achieve higher levels of overall satisfaction with the hotel experience, this study combined four simple methods, including Kano’s model, refined Kano’s model, Importance-Satisfaction model, and the Improvement index, to evaluate two types of hotels. The integrated approach of service quality measurement is based on the importance and satisfaction survey of the quality attributes. The survey, with 24 attributes and service items, were administrated to a random sample of 400 customers at one business hotel and one resort hotel in Taiwan. The strategies of these two kinds of hotels were compared and discussed in this study. On the basis of the key quality attributes identified by employing the integrated approach, which are significantly different from those identified on the basis of a simple satisfaction survey, hotels can make appropriate decisions on specific areas for improvement to further enhance the hotel service quality in Taiwan.     

Corporate borrowing and growth option value: The limited liability effect

A firm issues bonds before undertaking a risky continuous investment project that is costly to later either expand or contract. The firm’s existing debt load causes it to install a smaller capacity because equity has limited liability. This lowers debt value, but such a cost should be borne by equityholders because debtholders will rationally anticipate equityholders’ future behavior. The firm’s choice of debt levels balances this agency cost against the tax shield benefit. As the firm incurs higher costs to later expand capacity, its growth option value becomes lower. The simulation results of this article are in line with Myers’ conjecture (1977), which states that a firm’s debt capacity is inversely related to its growth option value.     

Environment, irreversibility and optimal effluent standards

The present article investigates the use of performance standards to correct environmental externalities. Each firm in an industry emits waste in the production process, and, in turn, the average waste emissions of the industry adversely affect the firm's productivity. The firm, which incurs sunk costs when employing capital to abate waste emissions, is uncertain about the efficiency of capital. The firm will underestimate environmental externalities and will therefore pollute more than is socially efficient. To correct this tendency, the regulator can set a limit on either emissions or the emission-output ratio at the socially efficient level. The firm will invest more, produce more, and pollute less when the regulator implements the former than when the regulator implements the latter.     

Legislative protection from discrimination in access to employer‐provided training

This article provides an analysis of laws across all 193 United Nations countries that protect workers from discrimination in access to employer‐provided training. We assessed the overall level of protection and the characteristics most commonly protected, as well as the extent of variation across geographic regions and country income. Overall, 60% of countries were found to offer specific protections from discrimination in access to training for at least one of the seven protected characteristics, which was significantly less than the percentage of countries offering protections from discriminatory hiring or terminations. Gender was the most commonly protected characteristic, whereas sexual orientation was least commonly protected. These findings suggest that employer‐provided training is less well‐protected from discrimination when compared with other aspects of employment and that there is variation in protection across socio‐demographic characteristics and geographic regions. Additional legislation may be needed to ensure equitable access to training for all workers.     

R&D investment decision and optimal subsidy

This article assumes that a firm facing technological uncertainty must decide whether to purchase R&D capital at each instant. R&D capital exhibits both irreversibility and externality through the learning‐by‐doing effect. The combination of irreversibility and uncertainty drives agents to be more prudent; the maxim 'better safe than sorry' applies. This maxim is more important if uncertainty is greater, technology progresses at a lower pace, the externality is stronger, or a catastrophic event is less likely to occur. A firm ignoring the externality will both invest later and disinvest earlier than a social planner who internalizes the externality. An equal rate of investment tax credits should be given to both costlessly reversible investments and irreversible ones, and the same rate of taxation should be imposed on disinvestment.     

Managing the Exploitation/Exploration Paradox: The Role of a Learning Capability and Innovation Ambidexterity

Some researchers have proposed that practices facilitating learning and knowledge transfer are particularly important to innovation. Some of the practices that researchers have studied include how organizations collaborate with other organizations, how organizations promote learning, and how an organization's culture facilitates knowledge transfer and learning. And while some have proposed the importance of combining practices, there has been a distinct lack of empirical studies that have explored how these practices work together to facilitate learning and knowledge transfer that leads to the simultaneous achievement of incremental and radical innovation, what we refer to as innovation ambidexterity (IA). Yet, a firm's ability to combine these practices into a learning capability is an important means of enabling them to foster innovation ambidexterity. In this study, learning capability is defined as the combination of practices that promote intraorganizational learning among employees, partnerships with other organizations that enable the spread of learning, and an open culture within the organization that promotes and maintains sharing of knowledge. This paper examines the impact of this learning capability on innovation ambidexterity and innovation ambidexterity's effect on business performance. The resource‐based view (RBV) of the firm is used to develop a conceptual foundation for combining these practices. This study empirically examines whether these practices constitute a learning capability by analyzing primary data gathered from 214 Taiwanese owned strategic business unit (SBUs) drawn from several industries where innovation is important. The results of this study make four important contributions. First, they demonstrate that the combination of these practices has a greater impact on innovation ambidexterity than any one practice individually or when only two practices are combined. Second, the results demonstrate a relationship between innovation ambidexterity and business performance in the form of revenues, profits, and productivity growth relative to competitors. Third, the results suggest that innovation ambidexterity plays a mediating role between learning capability and business performance. That is, learning capability has an indirect impact on business performance by facilitating innovation ambidexterity that in turn fosters business performance. This study also contributes to our understanding of ambidexterity literature in a non‐Western context, i.e., Taiwan.     

Efficient growth boundaries in the presence of population externalities and stochastic rents

This paper investigates how the uncertain demand for urban land affects the design of efficient growth boundaries. Landowners decide both the timing of conversion and the capital intensity when facing a population externality that decreases urban rents. While growth controls induce landowners to convert their land earlier than planned, these controls do not affect their intensity choices. Growth controls also raise the prices of both urban and undeveloped land. To accommodate the uncertain demand for urban land, the regulator should slacken the growth boundary control once urban rents pass historically high levels. In general, the regulator should also tighten the control when urban rents become volatile.