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1 – 10 of 28This paper aims to examine the dynamics of house prices in metropolitan cities in an emerging economy. The purpose of this study is to characterise the house price dynamics and…
Abstract
Purpose
This paper aims to examine the dynamics of house prices in metropolitan cities in an emerging economy. The purpose of this study is to characterise the house price dynamics and the spatial heterogeneity in the dynamics.
Design/methodology/approach
The author explores spatial heterogeneity in house price dynamics, using data for 35 Indian cities with a million-plus population. The research methodology uses panel econometrics allowing for spatial heterogeneity, cross-sectional dependence and non-stationary data. The author tests for spatial differences and analyses the income elasticity of prices, the role of construction costs and lending to the real estate industry by commercial banks.
Findings
Long-term fundamentals drive the Indian housing markets, where wealth parameters are stronger than supply-side parameters such as construction costs or availability of financing for housing projects. The long-term elasticity of house prices to aggregate household deposits (wealth proxy) varies considerably across cities. However, the elasticity estimated at 0.39 is low. The highest coefficient is for Ludhiana (1.14), followed by Bhubaneswar (0.78). The short-term dynamics are robust and show spatial heterogeneity. Short-term momentum (lagged housing price changes) has a parameter value of 0.307. The momentum factor is the crucial dynamic in the short term. The second driver, the reversion rate to long-term equilibrium (estimated at −0.18), is higher than rates reported from developed markets.
Research limitations/implications
This research applies to markets that require some home equity contributions from buyers of housing services.
Practical implications
Stakeholders can characterise stable housing markets based on long-term fundamental value and short-run house price dynamics. Because stable housing markets benefit all stakeholders, weak or non-existent mean reversion dynamics may prompt the intervention of policymakers. The role of urban planners, and local and regional governance, is essential to remove the bottlenecks from the demand side or supply side factors that can lead to runaway prices.
Originality/value
Existing literature is concerned about the risk of a housing bubble due to relaxed credit norms. To prevent housing market bubbles, some regulators require higher contributions from home buyers in the form of equity. The dynamics of house prices in markets with higher owner equity requirements vary from high-leverage markets. The influence of wealth effects is examined using novel data sets. This research, documents in an emerging market context, the observations cited in low-leverage developed markets such as Germany and Japan.
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Yaxin Ma, Fauziah Md Taib and Nusirat Ojuolape Gold
This study aims to merge the world’s proven ways of housing finance, including musharakah mutanaqisah, housing cooperatives and real estate crowdfunding, to present an alternative…
Abstract
Purpose
This study aims to merge the world’s proven ways of housing finance, including musharakah mutanaqisah, housing cooperatives and real estate crowdfunding, to present an alternative housing unaffordability solution based on the Islamic finance principle. It is intended to reduce the burden of funding for both sides (consumers and developers) and create win–win chances for all stakeholders, including intermediaries. By moving away from debt financing and merging the features of crowdfunding and cooperative, it is hopeful that the burden of home ownership will no longer be the case.
Design/methodology/approach
This paper presents the opinions of potential Chinese homebuyers (minority Muslims and most non-Muslims) and a few industry experts toward the proposed model via a mixed research method.
Findings
According to the findings, the majority of respondents agreed with the proposed paradigm. Just concerned that China’s lack of community culture and trust could pose a major threat to implementation. However, this paper argues that Chinese local governments may perform pilot testing in places where Islamic culture is prevalent. Their unique community culture and fundamental understanding of Shariah law may affect the viability of the proposed model.
Originality/value
The proposed model would increase the applicability of Islamic finance as a way of protecting the social order of communities in the spirit of upholding justice and fairness. A new type of housing loan based on musharakah mutanaqisah may squeeze out the real estate bubble and provide stakeholders with a multidimensional investment channel. In particular, the study identifies the impact of Chinese Islamic financing on government and cultural needs. It presents possible challenges for implementing the proposed model in reality and helps bridge the gap between theory and practice.
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Siti Hafsah Zulkarnain and Abdol Samad Nawi
The purpose of this study is to analyse numerous aspects affecting residential property price in Malaysia against macroeconomics issues such as gross domestic product (GDP)…
Abstract
Purpose
The purpose of this study is to analyse numerous aspects affecting residential property price in Malaysia against macroeconomics issues such as gross domestic product (GDP), exchange rate, unemployment and wage.
Design/methodology/approach
The hedonic pricing model has been adopted as econometric model for this research to investigate the relationship between residential property price against macroeconomics indicator. The data for residential property price and macroeconomic variables were collected from 1991 to 2019. Multiple linear regression had been adopted to find the relationship between the dependent and independent variables.
Findings
The result shows that the GDP has a significant positive impact on residential property price, while exchange rate has no significant impact although it was positive. In addition, the unemployment rate has a significant impact on the residential property price and has a negative relationship. Similar to the wage that shows the negative relationship with residential property prices. Moreover, during the pandemic COVID-19 in Malaysia, this research shows a more transparent view of the relationship between residential property price and the macroeconomic issues of GDP, exchange rate, unemployment and wage.
Originality/value
The findings of this research found that macroeconomics issue cannot be eliminated due to Malaysia is a developing country, and there will always be an issue that will happen, but the issues can be reduced to maximise the advantages, e.g. during COVID-19, the solution to fight against COVID-19 were crucial and weaken the macroeconomics issues.
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Robert Mwanyepedza and Syden Mishi
The study aims to estimate the short- and long-run effects of monetary policy on residential property prices in South Africa. Over the past decades, there has been a monetary…
Abstract
Purpose
The study aims to estimate the short- and long-run effects of monetary policy on residential property prices in South Africa. Over the past decades, there has been a monetary policy shift, from targeting money supply and exchange rate to inflation. The shifts have affected residential property market dynamics.
Design/methodology/approach
The Johansen cointegration approach was used to estimate the effects of changes in monetary policy proxies on residential property prices using quarterly data from 1980 to 2022.
Findings
Mortgage finance and economic growth have a significant positive long-run effect on residential property prices. The consumer price index, the inflation targeting framework, interest rates and exchange rates have a significant negative long-run effect on residential property prices. The Granger causality test has depicted that exchange rate significantly influences residential property prices in the short run, and interest rates, inflation targeting framework, gross domestic product, money supply consumer price index and exchange rate can quickly return to equilibrium when they are in disequilibrium.
Originality/value
There are limited arguments whether the inflation targeting monetary policy framework in South Africa has prevented residential property market boom and bust scenarios. The study has found that the implementation of inflation targeting framework has successfully reduced booms in residential property prices in South Africa.
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Jurgita Banytė and Christopher Mulhearn
This article seeks to offer an answer. It explores the criteria on which commercial property market participants can develop strategies in hugely challenging circumstances. For…
Abstract
Purpose
This article seeks to offer an answer. It explores the criteria on which commercial property market participants can develop strategies in hugely challenging circumstances. For this purpose, a survey-based approach was developed with work conducted with property-market professional in the United Kingdom (UK), France, Germany and Sweden to produce a criteria-based tool supporting adaption to changing market circumstances.
Design/methodology/approach
The data have been analyzed using statistical analysis. The data's statistical analysis included Cronbach's alpha's application to evaluate the respondents' replies' reliability. A entral tendency test was used to identify the means of relevance of the criteria. The Mann–Whitney U test was used to determine potential material differences between the UK and other countries with Bonferroni corrections applied to minimize type-I errors.
Findings
Thirty characteristics have been identified that impact the dynamics of the commercial property market. Their relevance to the commercial property market was determined using a survey. The literature analysis showed that the researchers paid more attention to quantitative criteria and their comparison. The survey showed that the relevance of criteria to the commercial property market dynamics is unequal. However, the survey results showed that it is most important to pay attention to emotional criteria to adapt to uncertainty changing conditions. The problem of the environment has been on the agenda for the last four decades. Therefore, the fact that the results of the study showed that the environmental criteria are the least significant is unexpected.
Research limitations/implications
The study involved economically developed countries of Europe. Extending the study's geographical scope would be valuable in revealing whether the same differences exist in other geographical areas (such as Australia or the USA).
Practical implications
The practical implication of the analysis may be to facilitate the decision-making process of either selecting a country for commercial property investment or selecting the most sensitive and relevant criteria for the decision-making.
Originality/value
Criteria for commercial property market performance which promote successful property investment have been developed. Moreover, the criteria affecting the commercial property market have been weighted by their relevance to the market and their sequence of relevance has been established. And finally, the developed criteria have been placed into five groups that could serve as a foundation for a macro-level assessment of commercial property market dynamics.
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Paola Ferretti, Cristina Gonnella and Pierluigi Martino
Drawing insights from institutional theory, this paper aims to examine whether and to what extent banks have reconfigured their management control systems (MCSs) in response to…
Abstract
Purpose
Drawing insights from institutional theory, this paper aims to examine whether and to what extent banks have reconfigured their management control systems (MCSs) in response to growing institutional pressures towards sustainability, understood as environmental, social and governance (ESG) issues.
Design/methodology/approach
The authors conducted an exploratory study at the three largest Italian banking groups to shed light on changes made in MCSs to account for ESG issues. The analysis is based on 12 semi-structured interviews with managers from the sustainability and controls areas, as well as from other relevant operational areas particularly concerned with the integration process of ESG issues. Additionally, secondary data sources were used. The Malmi and Brown (2008) MCS framework, consisting of a package of five types of formal and informal control mechanisms, was used to structure and analyse the empirical data.
Findings
The examined banks widely implemented numerous changes to their MCSs as a response to the heightened sustainability pressures from regulatory bodies and stakeholders. In particular, with the exception of action planning, the results show an extensive integration of ESG issues into the five control mechanisms of Malmi and Brown’s framework, namely, long-term planning, cybernetic, reward/compensation, administrative and cultural controls.
Practical implications
By identifying the approaches banks followed in reconfiguring traditional MCSs, this research sheds light on how adequate MCSs can promote banks’ “sustainable behaviours”. The results can, thus, contribute to defining best practices on how MCSs can be redesigned to support the integration of ESG issues into the banks’ way of doing business.
Originality/value
Overall, the findings support the theoretical assertion that institutional pressures influence the design of banks’ MCSs, and that both formal and informal controls are necessary to ensure a real engagement towards sustainability. More specifically, this study reveals that MCSs, by encompassing both formal and informal controls, are central to enabling banks to appropriately understand, plan and control the transition towards business models fully oriented to the integration of ESG issues. Thereby, this allows banks to effectively respond to the increased stakeholder demands around ESG concerns.
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Cemil Kuzey, Amal Hamrouni, Ali Uyar and Abdullah S. Karaman
This study aims to investigate whether social reputation via corporate social responsibility (CSR) awarding facilitates access to debt and decreases the cost of debt and whether…
Abstract
Purpose
This study aims to investigate whether social reputation via corporate social responsibility (CSR) awarding facilitates access to debt and decreases the cost of debt and whether governance mechanisms moderate this relationship.
Design/methodology/approach
The sample covers the period between 2002 and 2021, during which CSR award data were available in the Thomson Reuters Eikon/Refinitiv database. The empirical models are based on country, industry and year fixed-effects regression.
Findings
While the main findings produced an insignificant result for access to debt, they indicated strong evidence for the positive relationship between CSR awarding and the cost of debt. Moreover, the moderating effect highlights that while the sustainability committee helps CSR-awarded companies access debt more easily, independent directors help firms decrease the cost of debt via CSR awarding. Furthermore, the results differ between the US and the non-US samples, earlier and recent periods, high- and low-leverage firms and large and small firms.
Originality/value
For the first time, to the best of the authors’ knowledge, the authors assess whether social reputation via CSR awarding facilitates access to debt and decreases the cost of debt in an international and cross-industry sample. Little is known about the effect of social reputation on loan contracting, although social reputation conveys broader information that goes beyond the firm’s internal (performance) and external (reporting) CSR practices. The authors also draw attention to the differing roles of distinct governance mechanisms in leveraging social reputation for loan contracting.
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Chin Tiong Cheng and Gabriel Hoh Teck Ling
Increasing overhang of serviced apartments poses a serious concern to the national property market. This study aims to examine the impacts of macroeconomic determinants, namely…
Abstract
Purpose
Increasing overhang of serviced apartments poses a serious concern to the national property market. This study aims to examine the impacts of macroeconomic determinants, namely, gross domestic product (GDP), consumer confidence index (CF), existing stocks (ES), incoming supply (IS) and completed project (CP) on serviced apartment price changes.
Design/methodology/approach
To achieve more accurate, quality price changes, a serviced apartment price index (SAPI) was constructed through a self-developed hedonic price index model. This study has collected 1,567 transaction data in Kuala Lumpur, covering 2009Q1–2018Q4 for price index construction and data were analysed using the vector autoregressive model, the vector error correction model and the fully modified ordinary least squares (OLS) (FMOLS).
Findings
Results of the regression model show that only GDP, ES and IS were significantly associated with SAPI, with an R2 of 0.7, where both ES and IS have inverse relationships with SAPI. More precisely, it is predicted that the price of serviced apartments will be reduced by 0.56% and 0.21% for every 1% increase in ES and IS, respectively.
Practical implications
Therefore, government monitoring of serviced apartments’ future supply is crucial by enforcing land use-planning regulations via stricter development approval of serviced apartments to safeguard and achieve more stable property prices.
Originality/value
By adopting an innovative approach to estimating the response of price change to supply and demand in a situation where there is no price indicator for serviced apartments, the study addresses the knowledge gap, especially in terms of understanding what are the key determinants of, and to what extent they influence, the SAPI.
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Akansha Mer and Amarpreet Singh Virdi
Introduction: Small- and medium-sized enterprises (SMEs) play a vital role in the economic development of economies by generating job opportunities. Considering their…
Abstract
Introduction: Small- and medium-sized enterprises (SMEs) play a vital role in the economic development of economies by generating job opportunities. Considering their significance, understanding the challenges and skills required in these enterprises becomes essential and timely.
Purpose: This study aims to discuss the limitations and skill gaps faced by SMEs in emerging economies, such as India, Indonesia, Brazil, China, Malaysia, Ghana, Hungary, Saudi Arabia, South Africa, Türkiye, UAE, Iran, Kazakhstan, Türkiye, Zambia, Romania, and Vietnam.
Methodology: The study adopts a systematic review and meta-synthesis approach, utilising a literature review to comprehensively analyse, synthesise, and map the existing literature by identifying overarching themes.
Findings: The study examines the challenges SMEs encounter in emerging economies, including resource scarcity, limited access to credit, inadequate infrastructure, low technology adoption, restricted global market access, and ineffective marketing strategies. There is a notable shortage of skilled labour and development initiatives within SMEs in India even though the country has a sizeable pool of qualified workers. There is a pressing need for additional technical and managerial skills to remain competitive in the market. The findings of this study will assist HR managers in addressing skill shortages among employees in SMEs operating within emerging economies
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