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Article
Publication date: 14 May 2020

Muhammad Jufri Marzuki and Graeme Newell

Infrastructure investment is one of the few high-calibre real alternative assets with a strong prominence in the portfolios of institutional investors, especially those…

Abstract

Purpose

Infrastructure investment is one of the few high-calibre real alternative assets with a strong prominence in the portfolios of institutional investors, especially those with a liability-driven investment strategy. This has seen increased institutional investor interest in infrastructure for reasons such as diversification benefits and inflation hedging abilities, resulting in the substantial growth in non-listed and listed investment products offering access to the infrastructure asset class, and complementing the existing route via direct investment. This paper aims to assess the investment attributes of non-listed infrastructure over Q3:2008–Q2:2019, compared with other global listed assets of infrastructure, property, stocks and bonds.

Design/methodology/approach

Quarterly total returns were derived from the valuation-based MSCI global non-listed quarterly infrastructure asset index over Q2:2008–Q:2019, which were then filtered to decrease the valuation smoothing effects. A similar set of returns data was also collected for the other global asset classes. The average annual return, annual risk, risk-adjusted performance and portfolio diversification benefits for non-listed infrastructure and other asset investment classes were then computed and compared. Lastly, a constrained optimal asset allocation analysis was performed to validate the performance enhancement role of global non-listed infrastructure in a mixed-asset investment framework.

Findings

Global non-listed infrastructure delivered the strongest average annual total return performance, outperforming the other asset classes and provided investors with total returns that linked strongly with inflation. Global non-listed infrastructure also provided investors with one of the least volatile investment returns because of its ability to ensure predictable total returns delivery. This means that on the Sharpe ratio risk-adjusted return basis, non-listed infrastructure was also the strongest performing asset. This performance was also delivered with significant portfolio diversification benefits with all assets, resulting in non-listed infrastructure contributing to the mixed-asset portfolios across the entire portfolio risk spectrum.

Practical implications

Aside from better risk-return trade-offs, institutional investors are getting more secular with their portfolios for alternative assets that are able to provide other investment benefits such as predictable long-term performance and inflation-linked returns. A further improvement in performance and diversification benefits could be achieved by enriching existing investment portfolios with real alternative assets, one of which is the infrastructure asset class. For institutional investors, having exposure to and being part of the development, delivery and management of infrastructure assets are important, as they are one of the few real assets having considerable significance in the context of society, economy and investment needs.

Originality/value

This is the first research paper that empirically investigates the investment attributes of the non-listed infrastructure at a global level. This research enables empirically validated, more informed and practical decision-making by institutional investors in the infrastructure asset class, especially via the non-listed pathway. The ultimate aim of this paper is to empirically validate the strategic role of non-listed infrastructure as an important alternative asset in the institutional real asset investment space, as well as in the overall portfolio context.

Details

Journal of Property Investment & Finance, vol. 39 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 2 April 2020

Muhammad Jufri Marzuki and Graeme Newell

Communication infrastructure assets present a compelling investment opportunity for investors interested to tap into the technology-driven and innovation-led infrastructure

Abstract

Purpose

Communication infrastructure assets present a compelling investment opportunity for investors interested to tap into the technology-driven and innovation-led infrastructure segments, given the need for intensified capital deployment to prepare for the future substantial flow in volume and velocity of information. These communication infrastructure assets exist either in the segments of satellite or telecommunication infrastructure. This paper intends to empirically assess the performance attributes of listed satellite and telecommunication infrastructure over January 2000–June 2019. Sub-period performance dynamics of listed satellite and telecommunication infrastructure in the pre-GFC (January 2000–June 2007) and the post-GFC (July 2009–June 2019) investment horizons are provided.

Design/methodology/approach

Nineteen-year monthly total returns over 2000–2019 were used to analyse the risk-adjusted performance and portfolio diversification potential of both listed satellite and telecommunication infrastructure. The mean-variance portfolio optimisation framework using the full period and post-GFC ex-post returns, risk and correlation coefficient of listed satellite and telecommunication infrastructure and other financial assets was developed to determine the added-value benefits of listed satellite and telecommunication infrastructure in an optimised investment framework.

Findings

Listed satellite and telecommunication infrastructure delivered mixed investment performance. They were highly volatile and there was a significant discount in total return performance against the other asset classes in the full and pre-GFC periods. However, listed telecommunication infrastructure delivered stronger performance in the post-GFC period across all performance measures. Listed satellite and telecommunication infrastructure offered strong diversification benefits for investors across all investment horizons. Further, the inclusion of listed telecommunication infrastructure in both the full period and post-GFC mixed-asset investment framework was also empirically justified.

Practical implications

Communication infrastructure assets such as satellite and telecommunication infrastructure are the key infrastructure assets to ensure the seamless operation of and interaction with modern technology going forward. Whilst being a small proportion of the overall infrastructure asset class universe, the $2.1 trillion progressively expanding listed communication infrastructure sector is having an important role to stimulate investor capital deployments in high quality and future-proof communication infrastructure assets. Listed satellite and telecommunication infrastructure assets are an opportunistic investment given their future growth potential and are seen as a suitable fit for investors with a secular investment profile.

Originality/value

Despite the infrastructure asset class being the focus of growing attention and empirical analysis, no previous studies have empirically investigated the listed satellite and telecommunication infrastructure sectors. This is the first published empirical research analysis that aims at articulating the investment attributes of listed satellite and telecommunication infrastructure as a route for exposure in technology-related infrastructure assets. This research validates and informs practical property investment decision-making for investors seeking exposure in the increasingly important communication infrastructure assets sector.

Details

Journal of Property Investment & Finance, vol. 39 no. 3
Type: Research Article
ISSN: 1463-578X

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Abstract

Details

Journal of Property Investment & Finance, vol. 39 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 November 2003

Clare Chow‐Chua, Mark Goh and Tan Boon Wan

This paper examines the issue of ISO 9000 certification and its perceived benefits for Singapore based companies. Using an empirical approach, the paper seeks to ascertain…

Abstract

This paper examines the issue of ISO 9000 certification and its perceived benefits for Singapore based companies. Using an empirical approach, the paper seeks to ascertain if certification has indeed improved the performance for listed and non‐listed companies. The results from a survey of 146 firms suggest that while certification leads to better overall financial performance, non‐listed certified firms experience better documentation procedures, higher perceived quality of products or services, and more effective communication among employees than listed certified firms. Some problems encountered in certification include the failures to establish adequate monitoring programs, to follow set procedures and to carry out appropriate management reviews of the new system as well as unclear authorisation.

Details

International Journal of Quality & Reliability Management, vol. 20 no. 8
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 1 December 2020

Enrico Laghi, Michele Di Marcantonio, Valentina Cillo and Niccolo Paoloni

This study aims to validate a direct method to measure relational capital through the estimation of corporate brands. Considering the influence of relational capital…

Abstract

Purpose

This study aims to validate a direct method to measure relational capital through the estimation of corporate brands. Considering the influence of relational capital management in leading performance and brand development, we consider brand value as a proxy for relational capital. The main research goal is to extend the previous literature on intellectual capital, financial performance and brand management by elaborating and testing an original approach for valuating corporate brands using regression analysis on multiples based on firm-specific accounting data and market information.

Design/methodology/approach

The authors propose two econometric models, for both listed and non-listed companies, which consider brand valuations made by primary consulting entities (Interbrand, Brand Finance, BrandZ, European Brand Institute) and multiples derived from accounting and market data of firms. Models were tested on a sample of nonfinancial firms for the period from 2006 to 2019, distinguishing between IAS/IFRS-based and US GAAP-based reporting standards.

Findings

The empirical results show that the identified set of market and accounting multiples proved to be significant information for estimating the value of brands within the IAS/IFRS framework, while a lower explanatory power was assessed for US GAAP firms. Furthermore, the empirical evidence confirm that the direct, relative approach based on multiples is more accurate for valuating listed firms than non-listed firms. Robustness analysis demonstrates that findings do not change significantly when the reference datasets and the main assumptions of the models are altered.

Research limitations/implications

The statistical significance of the analysis is limited by the non-objective nature of brand value estimates. The use of additional sources for brand valuations might allow for the further assessment of the robustness of the relationships identified.

Practical implications

Due to their efficacy and ease of use, the proposed models represent valid practical tools for managers, investors, analysts and professional evaluators.

Originality/value

This work contributes to the existing literature through the identification of significant, stable relationships between brand values and the main economic, financial and asset characteristics of firms; the identification of those relationships would allow for the extension of the multiples approach also to the evaluation of brands.

Details

Journal of Intellectual Capital, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 23 June 2020

Graeme Newell

The Asian real estate markets have grown considerably in recent years and have taken on increased investment importance, particularly with significant developments in the…

Abstract

Purpose

The Asian real estate markets have grown considerably in recent years and have taken on increased investment importance, particularly with significant developments in the emerging markets in Asia. This paper assesses the opportunities for more research on the Asian real estate markets, by highlighting the significance of Asia real estate, the drivers behind this growth and the unique opportunities this presents for high-quality real estate research, by both local researchers and their international colleagues. Strategies for delivering this research agenda are also identified.

Design/methodology/approach

This research is based on a thorough understanding of the Asian real estate markets, based on my own research agenda, personal interactions, insights and extensive discussions with real estate leaders in the Asian markets. This is supported by a clear understanding of the real estate research opportunities in the Asian markets and the strategies needed to deliver this research agenda in an effective manner.

Findings

A range of real estate research areas are identified to increase the level of Asian real estate research. This sees research opportunities around key areas such as market dynamics, real estate investment vehicles, alternate real estate sectors, infrastructure and sustainability. Strategies for expanding this level of research for both local and international real estate researchers are also identified.

Practical implications

With the Asian real estate markets taking on more importance with many international real estate investors, it is important to see more high-quality research into these dynamic real estate markets. This research will see a fuller understanding of these Asian real estate markets to enable more informed real estate investment decision-making.

Originality/value

The need for more high-quality research into the Asian real estate markets is clearly presented, with enabling strategies to achieve this agenda identified. This will see expanded research opportunities to critically research these unique real estate markets and produce high-quality research publications.

Details

Journal of Property Investment & Finance, vol. 39 no. 1
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 20 January 2020

Mariluz Maté-Sánchez-Val and Paolo Occhino

The purpose of this paper is to provide evidence about the role of the geography on agri-food firms’ valuations. The goal is to test clusters and agglomeration effects on…

Abstract

Purpose

The purpose of this paper is to provide evidence about the role of the geography on agri-food firms’ valuations. The goal is to test clusters and agglomeration effects on the SMEs valuations.

Design/methodology/approach

The authors propose an empirical test applying a spatial regression analysis on a sample constitute by 306 agri-food SMEs located in two municipalities with different economic characteristics: Murcia and Madrid. In addition, the authors applied the discounted cash flow model in order to estimate the SMEs’ economic value.

Findings

The findings show the importance of the geography variables on the SMEs’ performances highlights interesting differences between territories. In particular, the results confirm that the geographical proximity between agri-food firms and between them and external agents is significant on firms’ valuations. The agglomeration effects are verified in both municipality but the density variable present a negative non-linear effect confirming previous studies which indicates that the existence of a large number of firms 05 rise competition, decreasing the economic opportunities of these companies.

Originality/value

This study gives interesting insights to policymakers, researchers and practitioners concerning the importance of the relationships among agents, also favoured by a developed infrastructures system in a fully connected environment.

Details

Agricultural Finance Review, vol. 80 no. 3
Type: Research Article
ISSN: 0002-1466

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Article
Publication date: 17 July 2020

Ashish Gupta, Graeme Newell, Deepak Bajaj and Satya Mandal

Real estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of…

Abstract

Purpose

Real estate forms an important part of any economy and the investment in real estate, in turn, is impacted by the macroeconomic environment of that country. The purpose of the present research is to examine macroeconomic determinants of foreign and domestic non-listed real estate fund (NREF) flows and to examine whether they are similar or different for an emerging economy like India.

Design/methodology/approach

The long and short-run cointegration between the time-series variables is estimated using the autoregressive distributed lag (ARDL) bounds test and error correction model (ECM) using quarterly data across the 2005–2017 period. ARDL is a suitable method for short time-series data.

Findings

The empirical results indicate that domestic NREF flows are positively and significantly impacted by real GDP and performance of listed real estate stocks (i.e. BSE realty index). Whereas, foreign NREF flows are positively and significantly impacted by the exchange rate, performance of listed real estate stocks and domestic NREF flows.

Practical implications

The empirical results have significant implications for academicians, policy makers and real estate market practitioners. In the context of these results, some interesting insights are gained that would help in the implementation of the policies aimed toward increasing the fund flows in the real estate sector, which in turn would have a significant trickle-down effect on the Indian economy.

Originality/value

The existing literature looks at macroeconomic and other drivers of foreign investment in international real estate investments. However, there are very few studies on the determinants of domestic real estate investment flows and on determinants of NREFs' investment flows; particularly in emerging markets. The present study, in contrast, evaluates simultaneously the macroeconomic determinants of the domestic and foreign NREFs' investment flows in India. The ARDL and ECM method used has been applied for the first time to the study of NREFs.

Details

Journal of Property Investment & Finance, vol. 38 no. 6
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 20 May 2020

King Carl Tornam Duho

This paper investigates the impact of intellectual capital and its components on slack-based technical efficiency (SBM-TE) of banks.

Abstract

Purpose

This paper investigates the impact of intellectual capital and its components on slack-based technical efficiency (SBM-TE) of banks.

Design/methodology/approach

Data envelopment analysis is used to compute SBM-TE scores and the Value-Added Intellectual Coefficient (VAIC™) model is used to measure intellectual capital. An unbalanced panel of 32 banks that operated from 2000 to 2017 has been used.

Findings

Overall, the efficiency scores are averaged at 79%, suggesting that an inefficient bank needs to enhance technical efficiency by 21% to be at par with the best performing banks. Beta-convergence and sigma-convergence exist among banks with faster speed evident among listed and local banks. Intellectual capital has a positive impact on SBM-TE and human capital is the main driver of technical efficiency among banks. This result is specifically evident among non-listed banks and foreign banks. Economies of scale property are also evident among the banks. Competition and asset tangibility inhibit technical efficiency among banks.

Practical implications

Banks are advised to invest in value-adding emerging technologies and their employees so as to enhance their efficiency. The study offers insights for policymakers, practitioners and researchers in emerging markets.

Originality/value

The study is premier in employing the SBM-TE to explain the intellectual capital and efficiency nexus, as well as, testing for both beta-convergence and sigma-convergence.

Details

Journal of Economic Studies, vol. 47 no. 7
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 1 September 2009

Dezie L. Warganegara and Intan Indriastari

This study attempts to provide evidence on earnings management of Indonesian firms one year prior to going public. The focus of this study is abnormal portion of accruals…

Abstract

This study attempts to provide evidence on earnings management of Indonesian firms one year prior to going public. The focus of this study is abnormal portion of accruals. These accruals are estimated using methodologies proposed by Dechow et al. (1995), and Kothari et al. (2005). This study finds no evidence that, on average, Indonesian firms manipulate their reported earnings to obtain higher proceeds from their IPOs. The findings stand even after size and leverage levels are considered in evaluating the incidences of earnings managements prior to IPOs. These findings support the arguments of Watts (2003) that empirical evidences show that public firms utilize conservative accounting and the practice becomes more conservative lately. It is also in line with Ball and Shivakumar’s argument (2005 and 2006) that the demand, for higher quality financial reports from public investors, forces IPO firms to improve their reporting quality prior to IPO and that regulation of publicly‐listed companies imposes greater requirements than non‐listed companies.

Details

Journal of Financial Reporting and Accounting, vol. 7 no. 2
Type: Research Article
ISSN: 1985-2517

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