TY  - JOUR
AB  - Purpose– The paper seeks to develop a research hypothesis: although individual companies deviate, in an average observation equity seems to reflect the value of land, and profits appear to reflect the land rent‐earning capacity of the company's assets.Design/methodology/approach– This hypothesis is based on a broad interpretation of the almost forgotten production factor – land, as an exclusive real option. The article substantiates the connection between equity and key assets preliminarily by considering samples of balance sheets of Germany and the UK.Findings– The land rent (in a wide sense) is hidden in many cases and diffusing on assets with similar features as land. Access to land (in a broad sense) and the foundation of the profits on rents appear to be an essential base for sustainable performance of companies.Originality/value– If the hypothesis holds true, equity is nothing other than indirect participation in land (in a broad sense), with impacts on many concepts. For instance, investment policy of pension funds had to be revised, since old‐age provision in stocks would be an indirect investment in land – but an economy as a whole cannot build its savings on land. A consequent taxation on land and other natural resources could replace business taxation. Only a sound endowment with equity opens the access to land and similar assets, which is a challenge for small and medium sized companies.
VL  - 8
IS  - 2
SN  - 1746-5680
DO  - 10.1108/SBR-01-2013-0004
UR  - https://doi.org/10.1108/SBR-01-2013-0004
AU  - Loehr Dirk
PY  - 2013
Y1  - 2013/01/01
TI  - Equity and the hidden factor land: a hypothesis
T2  - Society and Business Review
PB  - Emerald Group Publishing Limited
SP  - 107
EP  - 118
Y2  - 2024/04/23
ER  -