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Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

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Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 1 April 2005

Roberto S. Vassolo, Filipe De Almeida Ravara and John M. Connor

This study analyzes the trade‐off between strategic flexibility and commitment for cases of simultaneous and related strategic investments under high levels of…

Abstract

This study analyzes the trade‐off between strategic flexibility and commitment for cases of simultaneous and related strategic investments under high levels of uncertainty. It develops a model that, using a Cournot game and real option theory, demonstrates that (1) a correlated strategic investment adds value to a portfolio of ongoing strategic investments in a decreasing marginal fashion, and (2) the new investment delays the development of the other investments. Managers who fail to recognize these properties may make strategic commitments that destroy value, even in the presence of options with individual positive values. An important feature of the model is that competitive advantages may flow from market power or from the capability of managing the portfolio.

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Management Research: Journal of the Iberoamerican Academy of Management, vol. 3 no. 1
Type: Research Article
ISSN: 1536-5433

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Article
Publication date: 1 August 2016

Pierluigi Morano and Francesco Tajani

This paper aims to deal with the sale of the bare ownership subject to the lifetime usufruct to the seller as an alternative channel for housing investments in Italian…

Abstract

Purpose

This paper aims to deal with the sale of the bare ownership subject to the lifetime usufruct to the seller as an alternative channel for housing investments in Italian cities. The first aim of the study is to understand in greater detail the bare ownership market while also stimulating the interest of researchers in this segment of the housing market that up until now has been marginally analyzed so far. The second aim is to make the estimation of the bare ownership easier and more reliable for market investors and institutions. The third aim is to quantify on the markets investigated in this paper, the “actual” appraisal coefficients for the usufructuary presence, as well as compare these coefficients with the ones set for tax purposes to highlight either the concordance or discordance.

Design/methodology/approach

A hedonic price model is developed, with which it is possible to evaluate the market price of the bare ownership as a function of the determinants of value in the market segments in question, in particular the life expectancy of the usufructuary.

Findings

Through the hedonic models defined in this work, it is possible to appraise the market value of the bare ownership of residential flats in a building located in the same districts overcoming the limitations of the procedures currently used. Comparing the appraisal coefficients for the usufructuary presence estimated through the hedonic models defined in this work, with the legally defined coefficients applied countrywide for tax purpose, it is possible to conclude that the latter markedly underestimate the market value of bare ownership, thereby leading to fiscal iniquities and substantial social costs.

Research limitations/implications

It has not been possible to know the gender of the usufructuary. Rather limited size of the apartment sales samples.

Practical implications

The bare ownership market is currently an important sector that deserves greater attention from the institutions, market investors and real estate research. The model developed allows to estimate the “actual” coefficients for the determination of the market value of the bare ownership of residential units.

Originality/value

There are currently no studies nor descriptive investigations relating to either the bare ownership market segments or recent cases of estimates. The present study is the first in current literature that both systematically deals with the quantification of the “actual” appraisal coefficients for the usufructuary presence, as well as compares these coefficients with the ones set for tax purposes.

Details

International Journal of Housing Markets and Analysis, vol. 9 no. 3
Type: Research Article
ISSN: 1753-8270

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Book part
Publication date: 13 August 2007

Timothy B. Folta and Jonathan P. O’Brien

We examine a central tenet of real option theory – whether real options influence managerial thresholds for investment. In contrast to prior studies that have focused on…

Abstract

We examine a central tenet of real option theory – whether real options influence managerial thresholds for investment. In contrast to prior studies that have focused on whether real options influence discrete investment decisions, our focus is on empirically isolating real options’ effects on thresholds. In particular, we examine the real options inherent in acquisition decisions. Our model posits that there are good reasons why we might expect there to be information asymmetry around the value of real options. Accordingly, if managers have unique information about growth options we might expect to observe them lowering their thresholds, perhaps to the point where they are willing to accept negative market returns. We further expect that the degree of information asymmetry for firm-specific growth options should be higher than for industry-specific growth options. Finally, we believe that managerial thresholds will be more prone to influence from growth options than deferment options. While thresholds are unobservable, we are able to isolate the effects of real options on acquisition thresholds by borrowing a method used originally in labor economics to isolate the determinants of reservation wages. Using a sample of over 28,000 acquisitions in the U.S., we find strong support for the model. These findings suggest that firms with low thresholds may choose to acquire despite comparatively low expected performance.

Details

Real Options Theory
Type: Book
ISBN: 978-0-7623-1427-0

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Article
Publication date: 7 April 2015

Denis Camilleri

The purpose of this paper is to establish whether a terminal value is a substantial amount of the final figure in a hotel’s valuation. Malta’s scenario has been delved…

Abstract

Purpose

The purpose of this paper is to establish whether a terminal value is a substantial amount of the final figure in a hotel’s valuation. Malta’s scenario has been delved into. This due to the fact that owing to Malta’s high population density and its restrictive land area, land values attract a high premium as compared with larger developed countries. Other matters such as earnings’ multipliers derived from a cap rate (initial yield), CAPEX has also been delved into.

Design/methodology/approach

The methodologies adopted in hotel valuation practice has been delved into. An extensive literature review is undertaken to analyse the earnings multiplier adopted by various authors over the past 30-year period. The hotel cap rate (initial yield) has been compared with similar yields adopted in the institutional and property markets and then compares to market-based data. A discussion is undertaken on the validity of adopting discounted cash flow, as against the short cut market appraisal approach. Capitalization rates, cap rates have also been referred to as obtained from the academic and practitioners field and compared. Depreciation and the anticipated annual accommodation charges have been analysed. A database of hotel rooms value over the past 20-year period has been referred.

Findings

A table outlines the earnings’ multipliers in perpetuity or for the limited expected design life for various cap rates. This data will act as a guide in guiding practitioners to establish an earnings’ multiplier to be applied in their valuation methodology. An example in the Appendix clarifies the manner in which this data table is to be utilized. The finding of this example notes that for this hotel in Malta, as constructed on private land, the terminal value for this development hovers around the 30 per cent of the market value.

Research limitations/implications

This analysis is based on five valuations as undertaken on five hotels in Malta with classification grades varying from III to V. This notes that the terminal value varies within a range of 9-45 per cent of the total value. This analysis has to be undertaken for other countries for a global range of land terminal values percentages to be established.

Practical implications

Establishing the terminal value of a hotel business, will offer greater security for secured lending facilities required. It will further act as an important tool to establish the feasibility of a hotel development.

Originality/value

Updated insight is given to existing hotel valuation methodologies by delving into the workings of the earnings’ multiplier and establishes that in today’s market the terminal value of the hotel basis has to be accounted for. The above findings are based on a link between theory and practice.

Details

Journal of Property Investment & Finance, vol. 33 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 April 2002

C. West and P. Surtees

This article comprises an attempt to find a practical method of applying the decision in the case of the Commissioner for the South African Revenue Service v Woulidge (63…

Abstract

This article comprises an attempt to find a practical method of applying the decision in the case of the Commissioner for the South African Revenue Service v Woulidge (63 SATC 483) (‘Woulidge’) to limit the application of section 7(3) of the Income Tax Act (‘the Act’). It is proposed in this article that Woulidge would also apply to the provisions of section 7(5) and paragraphs 69 and 70 of the Eighth Schedule to the Act. The approach proposed is illustrated by means of examples. The approach adopted by the Commissioner for the South African Revenue Service is also discussed. A conclusion is drawn regarding the practicality of applying Woulidge in the light of the examples.

Details

Meditari Accountancy Research, vol. 10 no. 1
Type: Research Article
ISSN: 1022-2529

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Article
Publication date: 20 April 2010

Carolyn Sissoko

The purpose of this paper is to analyze the consequences of the “safe harbor” provisions of the US Bankruptcy Code that were enacted from 1984 through 2005 and that…

Abstract

Purpose

The purpose of this paper is to analyze the consequences of the “safe harbor” provisions of the US Bankruptcy Code that were enacted from 1984 through 2005 and that protect certain financial contracts from standard bankruptcy procedures.

Design/methodology/approach

Qualitative methods are used to evaluate whether these provisions of the Bankruptcy Code were successful in their stated goal of reducing systemic risk in the financial system. A model of systemic risk is presented verbally in order to frame the discussion.

Findings

Recent evidence indicates that the “safe harbor” provisions, in fact, destabilized the financial system by encouraging collateralized interbank lending, discouraging careful analysis of the credit risk of counterparties and increasing the risk that creditors will run on a financial firm.

Practical implications

This paper indicates that the rewriting of the Bankruptcy Code to favor financial firms has had a profoundly destabilizing effect on the financial system. To put the financial system on more secure foundations, the author proposes that large complex financial institutions be prohibited from posting collateral on over the counter derivative transactions and that the repo‐related bankruptcy amendments passed in 2005 be repealed.

Originality/value

This paper proposes an original framework for understanding systemic risk which drives the results in the paper.

Details

Journal of Financial Economic Policy, vol. 2 no. 1
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 1 June 2001

Neil J.K. Turner and Matthias Thomas

This paper – the second half of a two‐part paper – constructs a notional property index for the German office market. The returns from this index are subject to numerous…

Abstract

This paper – the second half of a two‐part paper – constructs a notional property index for the German office market. The returns from this index are subject to numerous adjustments in order to produce a cash flow which reflects annual indexation changes in rent and possible reviews to open market levels at appropriate intervals, depending on the terms of the lease contracts and the rise and fall of office rents over time. The lease contracts modulate the relationship between changes in market rents and yields in the German office market (as recorded by the relevant published notional index) leading to capital value movements of the hypothetical portfolio. Attempts have also been made to take account of the effects of non‐recoverable operating costs, although depreciation and letting voids were not accounted for.

Details

Journal of Property Investment & Finance, vol. 19 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 February 2002

Jeremy Galbreath

Today, we are at one of those rare inflection points along the path of human economic development. As the Industrial Age gave way to the Information Age, so now the…

Abstract

Today, we are at one of those rare inflection points along the path of human economic development. As the Industrial Age gave way to the Information Age, so now the Information Age has given way to the Relationship Age. Relationship Age economies, rather than based on raw materials or information, are based on the “hidden” assets of the firm, otherwise known as intangible assets. Intangible assets comprise the majority of a firm’s market value and the majority of intangible assets constitute the value contained within relationships: relationships with customers, employees, partners and suppliers. To find success in the Relationship Age and to drive sustainable market value, firms will need to develop a balanced approach in goal setting, quality programs and management techniques to grow and maximize their most important capital store, relationship assets.

Details

The TQM Magazine, vol. 14 no. 1
Type: Research Article
ISSN: 0954-478X

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Article
Publication date: 2 May 2017

Md. Mahmudul Alam, Chowdhury Shahed Akbar, Shawon Muhammad Shahriar and Mohammad Monzur Elahi

Because of chronic financial crises experienced during past several decades repeatedly and a failure to protect investors’ rights as a result, the world is looking for an…

Abstract

Purpose

Because of chronic financial crises experienced during past several decades repeatedly and a failure to protect investors’ rights as a result, the world is looking for an alternative form of stock market for quite some time so that interests of all relevant stakeholders can be safeguarded. At the same time, from the perspectives of devout Muslims, the current form of stock market restricts a Muslim to make investments in the market because of several unsatisfying provisions from the viewpoint of the Islamic law known as Shariah. This study aims to provide the criteria under which conditions of the Islamic Shariah permit making investments in the stock market. Hand in hand with that primary discussion, it has been eluded briefly why the Islamic Shariah principles offer a better alternative against conventional practices of the stock market.

Design/methodology/approach

This is a descriptive study based on the literature review.

Findings

This study explores the basic Islamic principles of investment in the stock market by revisiting the norms laid down by Shariah and current global practices of Islamic stock market and indexes.

Originality/value

This study will work as a guideline for investors and market authorities to understand the original Shariah rulings and the benchmark rulings for investment or establishing full-fledged Islamic stock markets, indexes and mutual funds.

Details

Qualitative Research in Financial Markets, vol. 9 no. 2
Type: Research Article
ISSN: 1755-4179

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