Search results

1 – 10 of over 69000
Article
Publication date: 10 June 2020

Nick French

An understanding of uncertainty has always been an integral part of property valuations. No valuation is certain, and the valuer needs to convey to the user of the…

1857

Abstract

Purpose

An understanding of uncertainty has always been an integral part of property valuations. No valuation is certain, and the valuer needs to convey to the user of the valuation in the degree of uncertainty pertaining to the market value.

Design/methodology/approach

This practice briefing is a short overview of the importance of understanding uncertainty in valuation in normal markets and the particular difficulties now with the material uncertainty created by the COVID-19 pandemic.

Findings

This paper discusses how important it is for the valuer and the client to communicate and understand the uncertainty in the market at any point of time. The COVID-19 has had a significant impact on property values and the importance of clarity within valuation reports.

Practical implications

This paper looks at the importance of placing capital and rental value changes due to material uncertainty in valuation reports.

Originality/value

This provides guidance on how professional bodies are advising their members, around the world, on how to report valuations and market value in the context of material uncertainty.

Details

Journal of Property Investment & Finance, vol. 38 no. 5
Type: Research Article
ISSN: 1463-578X

Keywords

Article
Publication date: 20 June 2022

Thomas C. Chiang

The purpose of this study is to present evidence as to whether the use of gold or silver can be justified as an asset to hedge against policy uncertainty and COVID-19 in…

Abstract

Purpose

The purpose of this study is to present evidence as to whether the use of gold or silver can be justified as an asset to hedge against policy uncertainty and COVID-19 in the Chinese market.

Design/methodology/approach

By using a GARCH model with a generalized error distribution (GED), this study specifies that the gold (or silver) return is a function of a set of economic and uncertainty variables, which include volatility from interest rate innovation, a change in economic policy uncertainty (EPU), a change in geopolitical risk (GPR) and volatility due to pandemic diseases, while controlling for stock market returns, inflation rates, economic growth and the Chinese currency value.

Findings

This study employs monthly data of gold and silver prices over the period from January 2002 to August 2021 to examine hedging behavior. Estimated results show that the gold return is positively correlated to the stock return and a rise in uncertainty from economic policy innovation, geopolitical risk, volatility due to US interest rate innovation as well as COVID-19 infection. This result suggests that gold cannot be used to hedge against a stock market decline, but can be used to hedge against uncertainty in general. However, the silver return only responds positively to a rise in uncertainty from the inflation rate and geopolitical risk. Evidence shows that silver returns are negatively correlated with stock returns, and display hedging characteristics. However, the evidence lacks statistically significance during the COVID-19 period, suggesting that the role of silver as a safe-haven asset against stock market turmoil is weak for this time period.

Research limitations/implications

More general nonlinear specifications can be developed. The tests may include different measures of uncertainty that interact with each other or with the lagged error terms. An implication of the model is that gold can be used to hedge against a broad range of uncertainties for economic policy change, political risk and/or a pandemic. However, the use of gold as an asset to hedge against a stock downturn in Chinese market should be done with caution.

Practical implications

This study has important policy implications as regards a choice in assets in formatting a portfolio to hedge against uncertainty. Specifically, this study presents empirical evidence on gold and silver return behavior and finds that gold returns respond positively to heightened uncertainty. Thus, gold is a good asset to hedge against uncertainty arising from policy innovations and infectious disease uncertainty.

Social implications

This paper provides insightful information on the choice of assets toward hedging against risk in the uncertainty market conditions. It provides information to investors and policy makers to use gold price movements as a signal for detecting the arrival of uncertainty. This study also provides information for demanding a risk premium for infectious disease.

Originality/value

This study empirically analyzes and verifies the role that gold serves as a safe haven asset to hedge against uncertainty in the Chinese market. This paper contributes to the literature by presenting evidence of risk/uncertainty premiums for holding gold against various sources of uncertainty such as economic policy uncertainty, geopolitical risk and equity market volatility due to US interest rate innovation and/or COVID-19. This study finds evidence that supports the use of a nonlinear specification, which demonstrates the interaction of uncertainty with the lagged change of infectious disease and helps to explain the gold/silver return behavior. Further, evidence shows that the gold return is positively correlated to the stock return. This finding contrasts with evidence in the US market. However, silver returns are negatively correlated with stock returns, but this correlation becomes insignificant during the period of COVID-19.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

Keywords

Book part
Publication date: 21 October 2019

Peter W. Liesch and Lawrence S. Welch

In this chapter we chart the evolution of the theory of the multinational enterprise (MNE) from Buckley and Casson’s original depiction to Buckley’s conceptualization of…

Abstract

In this chapter we chart the evolution of the theory of the multinational enterprise (MNE) from Buckley and Casson’s original depiction to Buckley’s conceptualization of the global factory. Within that context we consider the issues of risk and uncertainty which continue to challenge firms in the international context. Indeed, despite the explosion in access to greater wealth of digital sources of information and knowledge, risk, uncertainty, volatility, complexity, and ambiguity remain constraints on the ability of firms to function effectively in the international arena. Theoretical development around the nature of the MNE must deal with such enormities, but also other demands in the global context. The evolution of the global factory has been recognized as the disintegration of the MNE through the externalization of many of its previously core activities, including parts of production and marketing, but this form of the MNE will not be the end-game. Ultimately, it may be questioned whether the MNE is becoming, or has become, just a global super-manager of value activities orchestrating the internationalization of production.

Details

International Business in a VUCA World: The Changing Role of States and Firms
Type: Book
ISBN: 978-1-83867-256-0

Keywords

Book part
Publication date: 30 September 2016

Per L. Bylund and G. P. Manish

The goal of this paper is to analyze the views of Frank Knight and Ludwig von Mises on the topic of uncertainty and how it influences the theory of individual…

Abstract

The goal of this paper is to analyze the views of Frank Knight and Ludwig von Mises on the topic of uncertainty and how it influences the theory of individual decision-making and to trace out the implications of the same for the theories of entrepreneurship, equilibrium, and the firm. The paper adopts a historical approach in its analysis of the theory of uncertainty, with an extended discussion of the primary writings of Knight and Mises on this topic. It then uses the insights gleaned from this discussion in order to address issues and topics that have found a prominent place in the modern literature on entrepreneurship, equilibrium, and the firm that draws its inspiration from the Austrian School. The paper offers three main findings: in the realm of entrepreneurship it argues that there can be no theory of the entrepreneur without the concept of uncertainty provided by Knight and Mises, whereas with regard to the theory of equilibrium it focuses on highlighting the concept of an equilibrium with error prevalent in the Austrian tradition and on the implications that an explicit introduction of uncertainty has for the existence of a process of equilibration that pushes the economy toward a state of general equilibrium in real time. As regards the theory of the firm we find that a proper understanding of uncertainty ultimately reverses the direction of any causal explanation of economic organization, making the firm an outcome of dealing with uncertainty rather than a means to do so.

Details

Research in the History of Economic Thought and Methodology
Type: Book
ISBN: 978-1-78560-962-6

Keywords

Article
Publication date: 16 October 2020

JungYun Han and Ribuga Kang

While prior alliance literature has focused on how firms exploit alliance strategies to enhance performance and innovation, little is known about whether market uncertainty

Abstract

Purpose

While prior alliance literature has focused on how firms exploit alliance strategies to enhance performance and innovation, little is known about whether market uncertainty increases, decreases or has no effect on innovation outcomes of firms involved in alliances, and under what conditions these firms promote innovation in an uncertain market through alliances. Relatedly, innovation research has examined the impact of environmental uncertainty on innovation; however, this line of research does not answer the question in the alliance context.

Design/methodology/approach

Using data of firms engaged in alliances in the US pharmaceutical and biotechnical industries between 1990 and 2015, the authors examine firms' alliance partner characteristics and innovation outputs in terms of innovation quantity and exploratory innovation.

Findings

We find that market uncertainty hampers innovation quantity and exploratory innovation of firms involved in alliances, because in this environment, relational risks and coordination challenges outweigh the benefits of knowledge sharing from partners. However, the authors find that alliance partners' characteristics such as a different industry and different country origins mitigate the negative effect of market uncertainty on these firms' innovation by offering new business opportunities and enhancing their learning capability.

Originality/value

This study contributes to the alliance literature by addressing a significant question of whether and how market uncertainty matters in the innovation output of firms involved in alliances and how these firms address the environmental challenges and promote innovation. The study also contributes to innovation research by delineating the nature of market uncertainty and its impact on innovation in an alliance context.

Details

European Journal of Innovation Management, vol. 24 no. 5
Type: Research Article
ISSN: 1460-1060

Keywords

Article
Publication date: 21 September 2018

Nektarios Tzempelikos and Kaouther Kooli

This paper aims to examine the moderating effect of environmental uncertainty on the impact of the focal constructs of relationship quality and relationship value on…

Abstract

Purpose

This paper aims to examine the moderating effect of environmental uncertainty on the impact of the focal constructs of relationship quality and relationship value on behavioural intentions across the theoretical perspectives of commitment-trust and relationship value. The study examines to which extent the application of these two theoretical perspectives can absorb part of the environmental uncertainty in a buyer/seller relationship.

Design/methodology/approach

The study used empirical data from UK manufacturers from different sectors to test the hypotheses developed. The sample ranged from small enterprises to multi-billion companies. A structured questionnaire was used as a research instrument.

Findings

The effects of relationship quality and relationship value on behavioural intentions are not found, to a large extent, to be moderated by environmental uncertainty. The findings support that the commitment-trust and relationship value perspectives can absorb part of the uncertainty firms face in business markets.

Research limitations/implications

The current study investigates the customer perspective only. Future dyadic research will be able to offer a more holistic view of the focal constructs and their performance outcomes.

Practical implications

The findings indicate that firms may find it productive to invest in more relationship marketing efforts in markets with higher levels of uncertainty to improve performance.

Originality/value

Although the role of environmental uncertainty as a key exogenous factor in relationship effectiveness should not be overlooked, the theoretical perspectives of commitment-trust and relationship value suggest that relevant approaches in explaining how favourable behavioural intentions can be generated succeed in absorbing part of the uncertainty that organizations can face in business relationships.

Details

Journal of Business & Industrial Marketing, vol. 33 no. 7
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 22 November 2018

Jie Liang and Nan Mei

The purpose of this paper is to examine the following research question in partner selection decisions in business-to-business strategic partnerships/collaborations…

Abstract

Purpose

The purpose of this paper is to examine the following research question in partner selection decisions in business-to-business strategic partnerships/collaborations literature: How do inertia and uncertainty affect partner selection? Explicitly, the paper analyzes how inertia of previous alliance selection routines and uncertainty of entire market movement shape firms’ preferences regarding exploratory partner selection (i.e. selecting new partners who never collaborate with the focal firm).

Design/methodology/approach

Grounded on inter-firm partnerships, partner selection and network theory literature, the study empirically tests a fine-grained sample of 511 open-end funds initiated by 61 fund management firms in China. To do so, it runs Tobit regression for main analysis and applies a variety of sensitivity analyses to check the robustness.

Findings

Results show that inertia in previous partner selection has a negative effect on exploration. Importantly, these inertial forces impact domestic firms but not international firms. Market uncertainty also affects exploratory partner selection: short-term market uncertainty encourages exploration, whereas long-term uncertainty inhibits it. These effects also depend on firms’ type: long-term market uncertainty has a negative effect on exploration for international firms but not for domestic firms. Both types of firms exhibit a stronger tendency toward exploration when they encounter short-term uncertainty. However, this inclination is stronger in international firms.

Originality/value

Earlier research has examined how inertia affects exploitation but largely overlooked its effect on exploration. A critical examination of firm and environment level factors provides a deeper understanding of why and when firms have inconsistent preferences for specific partner selection strategies. Thus, this study offers a unique perspective for understanding firms’ exploratory partner selection by focusing on two important characteristics of focal firms: one internal (inertia) and one external (market uncertainty) in nature.

Details

Journal of Business & Industrial Marketing, vol. 34 no. 6
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 1 July 2018

Marek Marciniak and Deborah Drummond Smith

The purpose of this study is to investigate the value investors place on S&P index additions relative to uncertainty surrounding the firm and the market. Investors look…

Abstract

Purpose

The purpose of this study is to investigate the value investors place on S&P index additions relative to uncertainty surrounding the firm and the market. Investors look for reassuring signals or tell-tale signs around uncertainty.

Design/methodology/approach

Variation in the market response to announcements of S&P additions to the 400, 500 and 600 indices is examined against measures of risk factors. Internal risk factors include firm size relative to the index, total firm risk and liquidity, and whether the firm is a brand new index entrant. External risk factors related to market uncertainty are measured by the Chicago Board of Exchange volatility index.

Findings

Firms with lower market capitalization relative to the index, higher total risk, lower trading volume and first-time entrants to any S&P index elicit a positive market reaction compared to firms with less pricing uncertainty. In times of increased market uncertainty, investors tend to place more value on signals from respected institutions such as S&P, and riskier firms benefit more from inclusion in the S&P index. Overall, this study finds that the market overreaction is explained by the degree of uncertainty surrounding the added firms, as well as by the degree of market uncertainty at the time of the announcement.

Originality/value

The findings of this study suggest that investors interpret the prospect of S&P index addition as an opportunity for firms to reduce uncertainty surrounding them, and thus partially hedge their exposure to market uncertainty by joining an index tracked by dozens of index funds. The value of such a hedging strategy rises for riskier firms during market turbulence.

Details

The Journal of Risk Finance, vol. 19 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

Open Access
Article
Publication date: 5 December 2016

Yongbum Kim and Jayoung Choi

This paper aims to examine the role of a large competitor’s entry and level of innovativeness in consumer adoption of new products.

2934

Abstract

Purpose

This paper aims to examine the role of a large competitor’s entry and level of innovativeness in consumer adoption of new products.

Design/methodology/approach

This paper is based on a comparison between market uncertainty and technological uncertainty. This paper henceforth defines and analyzes the following key factors affecting the purchase intention of small- and medium-sized enterprise (SME) new products: type of new products and entry of large competitors. The study further verifies mediator variables that exert impacts: uncertainties regarding both technology and market.

Findings

The findings are as follows: purchase intention of SME new products does vary according primarily to the product types and entry of large competitors. More specifically, the entry of large competitors reduces uncertainties about really new products, thereby positively affecting SME new products.

Originality/value

There was no causal relationship found, however, on incrementally new products. Further findings clarify that the mediator variables affecting reciprocal interactions between purchase intention of SME new products and the entry of large competitors hold valid only for market uncertainties and not for technological uncertainties.

Details

Asia Pacific Journal of Innovation and Entrepreneurship, vol. 10 no. 1
Type: Research Article
ISSN: 2071-1395

Keywords

Article
Publication date: 20 November 2017

Brian Healy, Michele O’Dwyer and Ann Ledwith

Product advantage is consistently identified as the most important product characteristic in explaining the adoption and success of a new product. In small- and…

Abstract

Purpose

Product advantage is consistently identified as the most important product characteristic in explaining the adoption and success of a new product. In small- and medium-size enterprises (SMEs), in particular, improving new product performance is critical in supporting SME survival and growth. Given that SMEs are a vital component of most economies improving their ability to effectively launch new products is an essential activity for sustainability. However, although literature illustrates that developing products with high levels of product advantage and new product development is advantageous, few studies have explored product advantage activities in SMEs and consequently research on product advantage is over-reliant on large firm studies. Given the specific resource constraints which challenge SME new product development (i.e. financial, expertise, access to networks etc.) context-specific research is critical. The purpose of this paper is to address these gaps in literature by exploring the product advantage activities in four manufacturing SMEs actively engaged in product development.

Design/methodology/approach

The research question centres on exploring the antecedents of product advantage in SMEs (market uncertainties, competitive intensity, resource uncertainties and technological uncertainties) in the context of multi-dimensional perspective of product advantage (consisting of product innovativeness, product superiority and product meaningfulness). A qualitative interpretivist approach was used to explore the research question exploring the antecedents to, and nature of, product advantage in SMEs. Case studies were used to inductively and holistically view SMEs in their entirety, this approach facilitated in-depth understanding of the reality of the SME and allowed for the interpretation of the SMEs owner/managers perspectives on product advantage.

Findings

The empirical findings suggest that the most significant antecedent of product advantage in the case SMEs was competitive intensity followed by technology uncertainty and resource uncertainty and then market uncertainty. Product advantage was found to be strongly based on product meaningfulness with elements of product innovativeness and product superiority also defining their perspective of product advantage.

Research limitations/implications

There are several implications for SME owner/managers arising from this study. In the context of these findings, SMEs need to carefully consider three issues in supporting their new product development: first, their dependence on letting existing customers drives their new product development; second, owner/manager perceptions of product advantage are focused on delivering guaranteed sales, this focus nurtures incremental continuous product development rather than radical discontinuous innovation. While this strategy is low risk and supports SME sustainability, it could lead to less ambitious innovation strategies and slower growth for SMEs; third, antecedents of product advantage such as competitive intensity, technology uncertainty and resource uncertainty and market uncertainty need to carefully managed.

Originality/value

This study illustrates the complex nature of the antecedents and nature of product advantage in SMEs. The study provides insight into the product advantage characteristics that SMEs consider important in the development of new products. Different elements of each of the three product advantage constructs (product meaningfulness, product superiority and customer meaningfulness) are considered important under different conditions. Throughout this analysis, market needs and wants, technology, competitors and resources emerged as the defining conditions upon which product advantage decisions are based. More specifically knowledge regarding the market, technology, competition and the availability of resources dictated the type and levels of advantages that were presented in new products.

Details

Journal of Small Business and Enterprise Development, vol. 25 no. 1
Type: Research Article
ISSN: 1462-6004

Keywords

1 – 10 of over 69000