Risk,commitment, and project abandonment

This article deals briefly with the most loathsome of business topics — the admission of failure. Rather than actively encouraging project Anti-champions, many organizations experiencing financial duress inadverdently stifle opposing opinion. In some cases recognition is delayed until it is too late. This is unfortunate since failure can be managed like any other business situation. Companies with CEOs that foster open communications between finance and operations are more likely to avoid escalating commitment to failed projects.Prudence is a rich, ugly old maid courted by incapacity. William Blake Mike Devaney is Associate Professor of Finance at South-East Missouri State University. His primary research interest is real estate finance. He has published in the Journal of the American Real Estate and Urban Economics Association, Journal of Real Estate Research, and The Appraisal Journal to name a few. He also enjoys writing on popular business myth and has published on this subject in Business and Society Review as well as others.     

Bank Efficiency, Risk-Based Capital, and Real Estate Exposure: The Credit Crunch Revisited

The turbulent real estate market during the early 1990s coincided with the implementation of risk-based capital standards for commercial banks. In this study we use non-parametric linear programming techniques to identify the lost real estate lending due to bank inefficiency. Inefficiency may arise from one of three sources: risk-based capital standards which constrain bank real estate lending, inefficiency stemming from managerial oversight of real estate lending, and scale inefficiency which arises from banks not operating at constant returns to scale. The results indicate that the lost real estate lending associated with risk-based capital standards averaged 2.7% of total bank assets. However, banks could compensate by exercising better managerial oversight of real estate lending and by operating at constant returns to scale.     

Cointegration and causal relations in mortgage and capital markets

In years past, credit rationing resulted in the primary mortgage market being segmented from national capital markets. Some research suggests that the deregulation of depository institutions in the early 1980s along with the exponential growth in the secondary mortgage market, has resulted in a primary mortgage market more fully integrated with national capital markets. This study employs Granger Causality to test primary and secondary mortgage market segmentation. Our findings support the conclusion that causality is unidirectional from the treasury market to the primary and secondary mortgage market. The results also indicate that mortgage market speed of adjustment increased significantly by the end of the decade.     

Are mortgage lenders guilty of the housing bubble? A UK perspective

Existing theoretical models of house prices and credit rely on continuous rationality of consumers, an assumption that has been frequently questioned in recent years. Meanwhile, empirical investigations of the relationship between prices and credit are often based on national-level data, which is then tested for structural breaks and asymmetric responses, usually with subsamples. Earlier author argues that local markets are structurally different from one another and so the coefficients of any estimated housing market model should vary from region to region. We investigate differences in the price–credit relationship for 12 regions of the UK. Markov-switching is introduced to capture asymmetric market behaviours and turning points. Results show that credit abundance had a large impact on house prices in Greater London and nearby regions alongside a strong positive feedback effect from past house price movements. This impact is even larger in Greater London and the South East of England when house prices are falling, which are the only instances where the credit effect is more prominent than the positive feedback effect. A strong positive feedback effect from past lending activity is also present in the loan dynamics. Furthermore, bubble probabilities extracted using a discrete Kalman filter neatly capture market turning points.     

Time series models of mortgage choice: Evidence of lender influence

Unit root, co-integration, and Granger Causality are used to test specification of a generalized time series model of mortgage choice. Unit root tests determine that both the fixed-adjustable spread (FAsp) and the proportion of ARM originations (AP) are first difference stationary. The cointegrating vector between FAsp and AP was found to be weak, raising questions regarding their long-term relationship. Causality tests determined that ARM originations Granger causes the fixed-adjustable mortgage spread (APFAsp) rather than FAspAP. This result suggests that mortgage originators adjust the current FAsp spread based on last periods allocation. The coefficient vector for this specification was unstable and became increasingly negative during the 1980s.     

Small-Business Lending and Profit Efficiency in Commercial Banking

We use nonparametric linear programming methods to calculate the directional distance function and the profit function for a random sample of banks from 1994 to 1999. The estimates imply that the gain in small-business lending from reducing technical inefficiency is minor compared to the gain possible from eliminating allocative inefficiency. Actual small-business lending early in the sample period is less than optimal, but the misallocation is confined to small banks. As a percentage of assets, small-business lending is larger for the most efficient banks.     

The art of wasting time: sociability,friendship, community and holidays

Slow tourism is motivated by the desire for personal and communal well-being. It emerged as an antidote to the fast-paced imperatives of global capitalism that urge the entrepreneurial self to speed up and work harder to achieve and demonstrate desired social status. The entrepreneurial self can be understood in the contexts of neoliberalism and the class- and gender-based histories of time-thrift and rational recreation; the entrepreneurial self uses leisure time purposively in the pursuit of status, avoids idle pursuits and has restricted capacity to experience leisurely social relationships. In this article, it is argued that leisurely social relations can be reclaimed by letting go, even temporarily, of time-thrift and the compulsion to use leisure time purposively. Data drawn from in-depth interviews with repeat visitors at two Australian caravan parks revealed that for the period of their holiday the tourists relax, refuse to be driven by schedules, socialise with other tourists and feel no compulsion to use time purposively. The key reasons the tourists return to the parks each year were for the friendships and the sense of community they experience as part of the holiday. Slow tourism by its very nature rejects time-thrift, however, as the movement is harnessed by global capitalism, slow tourism risks becoming a source of conspicuous consumption. The findings of this study suggest that friendship and community thrive more readily in conditions where the need to achieve and demonstrate social status is discarded along with time-thrift.     

Supporting the global e‐teacher

This paper describes the scope of the challenge needed to support university teaching staff to become effective global e‐teachers. This challenge involves teachers in broadening their understanding of cultural diversity, as well as acquiring new skills in educational design and online teaching and learning. Three ways of supporting teachers are described: growth of individual teachers’ skills and confidence, a focus on curriculum and educational design, and development of appropriate university policy. In reality, support is needed in all three areas. Finally, some general principles for staff development of the global e‐teacher are suggested.