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1 – 10 of 292Peter Geiger, Marcelo Cajias and Sven Bienert
Given the growing market awareness concerning responsible investments in recent years, the purpose of this paper is to bridge the gap between real estate companies which…
Abstract
Purpose
Given the growing market awareness concerning responsible investments in recent years, the purpose of this paper is to bridge the gap between real estate companies which implemented a corporate social responsibility (CSR) agenda and the possible role within a multi‐asset portfolio optimisation framework. The behaviour of the asset class sustainable real estate (SRE) together with its diversification characteristics are the main focus.
Design/methodology/approach
The study is an explorative empirical analysis applying a portfolio optimisation algorithm. First, the authors developed a sustainable real estate index comprehending listed real estate companies from 2004 until 2010 acting in line with a CSR agenda. Second, the authors introduced SRE into the opportunity set of an UK investor and finally, generated the theoretical optimal asset allocation of SRE within different risk‐return portfolios.
Findings
The unique risk‐return pattern of SRE enables the asset class to be allocated across all portfolios ranging from low to high risk along the efficient frontier. In the low‐risk levels, SRE behaves as a diversifier whereas in the medium‐ to high‐risk portfolios SRE is represented as the main allocated asset. Sustainable real estate thus offers opportunities to numerous investors in view of their investment preferences and corporate strategies.
Practical implications
The results could encourage institutional investors to take investments in CSR‐driven listed real estate companies into account and to rethink their strategic asset allocation approach in view of the identified asset characteristics and the behaviour within a portfolio framework.
Originality/value
The paper provides a first insight in the field of portfolio management by introducing SRE into the opportunity set of a UK investor. The study raises SRE to an aggregated level and delivers theoretical as well as empirical evidence of the role sustainable real estate is playing within a multi‐asset portfolio.
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Marcelo Cajias, Peter Geiger and Sven Bienert
A green agenda has become a growing subject throughout an increasing number of European listed real estate companies over the last decade. The focus on sustainability is…
Abstract
Purpose
A green agenda has become a growing subject throughout an increasing number of European listed real estate companies over the last decade. The focus on sustainability is presumably not only goodwill or legislation driven but is rather a benefit driven action to achieve an economic surplus. The purpose of this paper is the development of an adequate sustainability definition, the investigation of the effect of a sustainability agenda on a company level, and the identification of possible financial benefits.
Design/methodology/approach
This is an explorative qualitative and quantitative study. First, the authors developed a four‐bottom‐line real estate sustainability agenda in accordance with the guidelines of the European Public Real Estate Association and the Global Reporting Initiative. Second, the study examines 80 European listed real estate companies from 2006 until 2009, and third, the study applies a panel analysis with conditional and unconditional regression techniques.
Findings
After classifying firms across different levels of sustainability intensity and quantifying the impact of an intensive green agenda the authors found a positive linkage between a green agenda and a green performance, especially in terms of an increased ability to generate revenues and a decreased level of idiosyncratic stock volatility. As a result, green commitments are not merely altruisms but are economically driven instead.
Originality/value
This paper gives, to the authors' knowledge, a first insight of how European real estate listed companies behave in terms of corporate social responsibility. The study contributes to the theoretical literature of corporate sustainable real estate companies by establishing an economic transmission mechanism as well as providing empirical evidence in favour of responsible activities.
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The purpose of this paper is to examine the costs to audit firms in terms of lost revenues of losing small clients due to auditor switching or client bankruptcy after issuing…
Abstract
Purpose
The purpose of this paper is to examine the costs to audit firms in terms of lost revenues of losing small clients due to auditor switching or client bankruptcy after issuing first-time going concern modified opinions.
Design/methodology/approach
A population of small Swedish companies receiving first-time going concern modified opinions in 2009 was examined to determine the effects two years later compared with a matched sample of financially stressed companies that had not received going concern modified opinions.
Findings
The results indicate that both auditor switching and client bankruptcy are positively related to receipt of going concern modified opinions. Furthermore, the authors find empirical evidence that auditors issuing first-time going concern modified opinions lose proportionately more fees through auditor switching and client bankruptcy than do auditors not issuing such opinions to financially stressed clients. Finally, the authors found that the going concern modified opinions issued by Big 4 firms are no more harmful to clients than are those issued by other audit firms.
Research limitations/implications
The authors recognize a limitation of this study regarding the choice of control companies. Although the authors attempted to find similarly sized and similarly financially stressed companies from the same industries as those companies in the test group, the authors may have missed other variables relevant to auditor switching or client bankruptcy.
Practical implications
A practical implication for the audit profession is the increased awareness of the fact that the financial dependence issues reported in this study extend to auditors with small client companies.
Originality/value
This is the first study to examine fees lost due to auditor switching and client bankruptcy caused by going concern modified opinions in a population of small companies. It contributes to the mixed evidence presented in previous research as to the extent to which going concern modified audit opinions are self-fulfilling prophecies.
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Jens Hirsch, Thomas Braun and Sven Bienert
The purpose of this paper is to investigate the functionality and main results of the ImmoRisk tool. The aim of the project of the Federal Ministry for Transport, Building and…
Abstract
Purpose
The purpose of this paper is to investigate the functionality and main results of the ImmoRisk tool. The aim of the project of the Federal Ministry for Transport, Building and Urban Development (BMVBS), in corporation with the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), was to develop a user-friendly tool that provides a sound basis with respect to the risk situation caused by extreme weather events.
Design/methodology/approach
The tool calculates the annual expected losses (AEL) for different types of extreme weather hazard and the damage rate as the proportion of AEL on building value, based on a trinomial approach: natural hazard, vulnerability and the value of the property.
Findings
The paper provides property-specific risk profiles of both the present and future risk situation caused by various extreme weather events.
Research limitations/implications
The approach described in the paper can serve as a model for the realization of subsequent tools in further countries bound with other climatic risks.
Practical implications
The real estate industry is affected by a significant rise in monetary damages caused by extreme weather events. Accordingly, the approach is suitable for implementation in the companies’ real estate risk management systems.
Social implications
The tool offers homeowners a profound basis for investment decisions with regard to adaptation measures.
Originality/value
The approach pioneers fourfold: first, by meeting the needs of the housing and real estate industry based on a trinomial approach; second, by using a property-specific bottom-up approach; third, by offering both a comprehensive risk assessment of the hazards storms, flood and hailstorm and finally, by providing results with respect to the future climatic risk situation.
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Torbjörn Tagesson and Peter Öhman
This paper aims to chart Swedish auditors’ likelihood of issuing going concern warnings (GCWs), and to investigate the relationship between formal auditor competence, audit fees…
Abstract
Purpose
This paper aims to chart Swedish auditors’ likelihood of issuing going concern warnings (GCWs), and to investigate the relationship between formal auditor competence, audit fees and audit firm, respectively, and the likelihood of issuing GCWs.
Design/methodology/approach
The empirical data are based on annual reports and audit reports for 2,547 limited companies that went bankrupt in 2010 in the wake of the financial crisis and had filed a financial statement in the year before the bankruptcy.
Findings
The findings indicate that Swedish auditors seldom issue GCWs. Moreover, there is a positive relationship between audit fee level and the likelihood of issuing GCWs, and Big 4 auditors being more likely to issue such warnings than other auditors. However, the analyses identify differences between audit firms (within the group of Big 4 firms and within the group of other audit firms) in terms of their predictions of client bankruptcies. This suggests a need for further investigation of firm-specific differences. Contrary to what was predicted, authorized auditors are not more likely to issue GCWs than approved auditors.
Research limitations/implications
This paper did not investigate the impact of audit experience and tenure or the possibility that auditors may signal survival problems by resigning.
Practical implications
Levying appropriate audit fees creates opportunities for thorough audits, but auditors’ formal competence based on training and qualification is not a factor that enforces audit quality. Based on the findings, the authors also suggest some clarifications of existing standards to reduce ambiguity regarding the reporting of survival problems.
Originality/value
The Swedish setting is a context in which most companies are small, creditor interest in accounting and auditing is strong and auditors must issue a modified audit opinion if half of the shareholders’ equity is spent. This setting offers a unique research opportunity because the formal competence differs between Sweden’s two categories of certified auditors, and it allows exploration beyond the dichotomy of Big 4 versus other audit firms.
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Patrick Richard, Kristina D. West, Peter Shin, Mustafa Z. Younis and Sara Rosenbaum
In 2010 the Patient Protection and Affordable Care Act boosted the expansion of community health centers (CHCs) with $11 billion in mandatory funding from 2011 to 2015. This study…
Abstract
In 2010 the Patient Protection and Affordable Care Act boosted the expansion of community health centers (CHCs) with $11 billion in mandatory funding from 2011 to 2015. This study used data from the Medical Expenditure Panel Survey (MEPS) and the North Carolina Behavioral Risk Factor Surveillance System (BRFSS) to assess the cost savings associated with the use of community health centers compared to other primary care providers. After controlling for various demographic, socioeconomic characteristics and health conditions, we found savings at an average of $3,437 in total expenditures and $1,211 in ambulatory care expenditures. These results suggest that continuing investment in health centers are important during times of budget cuts in order to improve access to care and to generate cost savings to the healthcare system.