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Relationship is based on the idea of creating a win‐win situation for parties involved in a business engagement. The purpose of the article is to develop a model of mutual value creation and reciprocal return on relationships (ROR_R) assessment, which enables calculation of joint and separate gains from a relational business engagement.

The approach takes the form of a conceptual analysis, which is tested empirically through a real‐life case. The empirical part is based on a longitudinal empirical study including several empirical cases.

Following a practice matching process, resulting in mutual innovation and aligning of their processes, resources and competencies, the parties in a business engagement make investments in the relationship. This enables the creation of joint productivity gains. Valuation of joint productivity gains produces an incremental value, which can be shared between the parties through a price mechanism. Finally, based on this shared value and costs of investments in the relationship by the parties, a reciprocal return on the relationship can be assessed and split between the business parties.

The study addresses dyadic business engagements only. The findings enable calculation of reciprocal return on relationships (ROR_R) and form a basis of further development of marketing metrics and financial contribution of marketing, and of developing financial measures of intangible assets called for by the finance and investor communities.

Using the conceptual model and corresponding metrics, the financial outcome of the development of customer relationships as well as an assessment of the return on relationships with customers can be established.

The approach to assess the value of customer relationships as a two‐sided endeavor is novel, as well as the joint productivity construct and the value sharing approach, and the way of assessing ROR as a reciprocal measure that can be split between the business parties.

The underlying principle of the Capital Asset Pricing Model (CAPM) is that there is a linear relationship between systematic risk, as measured by beta, and expected share returns. The CAPM attempts to describe this relationship by using beta to explain the differences between the expected returns on various shares and share portfolios. The CAPM has been the subject of considerable theoretical investigation and empirical research. The aim of this article is to establish the current knowledge of the usefulness of the CAPM, i.e. whether it provides a reasonable description of reality and whether it is a useful tool for investment decision‐making. The main conclusion drawn from the study is that the CAPM is useful and that it does describe and explain the risk/return relationship. However, other risk factors (i.e. other than beta) may also be useful for explaining share returns. Investors should therefore be cautious when using the model to evaluate investment performance.

The purpose of this paper is to pay more attention to four different research questions at least. One is that this study intends to explore the changes of the risk-return relationship over time, because the institutions and environment have changed a lot and might tend to influence the risk-return regime in the Chinese stock markets. The second question is whether there is any difference for the risk-return relationship between Shanghai and Shenzhen stock markets. The third question is to compare the similarities and dissimilarities of the risk-return tradeoff for different frequency data. The fourth question is to compare the explanation power of different GARCH-M type models which are all widely used in exploring the risk-return tradeoff.

This paper investigates the risk-return tradeoff in the Chinese emerging stock markets with a sample including daily, weekly and monthly market return series. A group of variant specifications of GARCH-M type models are used to test the risk-return tradeoff. Additionally, some diagnostic checks proposed by Engle and Ng (1993) are used in this paper, and this will help to assess the robustness of different models.

The empirical results show that the dynamic risk-return relationship is quite different between Shanghai and Shenzhen stock markets. A positive and statistically significant risk-return relationship is found for the daily returns in Shenzhen Stock Exchange, while the conditional mean of the stock returns is negatively related to the conditional variance in Shanghai Stock Exchange. The risk-return relationship usually becomes much weaker for the lower frequency returns in both markets. A further study with the sub-samples finds a positive and significant risk-return trade-off for both markets in the second stage after July 1, 1999.

This paper extends the existing related researches about the Chinese stock markets in several ways. First, this study uses a longer sample to investigate the relationship between stock returns and volatility. Second, this study estimates the returns and volatility relationship with different frequency sample data together. Third, a group of variant specifications of GARCH-M type models are used to test the risk-return tradeoff. In particular, the author employs the Component GARCH-M model which is relatively new in this line of research. Fourth, this study investigates if there is any structural break affecting the risk-return relationship in the Chinese stock markets over time.

The purpose of this paper is to contribute to the existing literature on the relationship between firm-level risk and returns and to explore other ways of measuring firm risk-taking. Literature overwhelmingly shows a negative relationship between firm-level risk and returns based on accounting data, which is counter-intuitive from the rational perspective of risk-aversion. This paper revisits this so-called Bowman’s paradox by examining the wealth of literature on the topic and empirically tests alternative measures of firm risk-taking that could provide a counter-argument on the existence of the paradox.

After formulating the criteria for such a measure, potential measures of firm risk-taking were developed based on variability of some key financial ratios and empirically tested using US listed companies’ data for several time periods from 1992 to 2016. Literature has explored the use of these financial ratios (e.g. R&D expenses as percentage of sales) based only on their magnitude. This paper is novel in that it examines the variability and not just the magnitude of these parameters.

Results showed the same counter-intuitive negative relationship between firm risk-taking and returns but the paper was able to identify an area for future theory development that hopefully will lead to a firm risk-taking measure that would exhibit the elusive positive relationship with returns.

The literature review of this paper brought together and provided a succinct classification of the various explanations for Bowman’s paradox that allowed the identification of a potentially rich area of research. It identified a gap in the literature which is the formulation of suitable measures of firm risk-taking and made investigations in this area.

The purpose of this paper is to investigate the relationship between occupiers’ satisfaction with the property management service they receive and the financial performance of commercial real estate.

The study uses occupier satisfaction data for 240 UK commercial properties collected over a 12-year period and the annual total returns achieved by those properties. Various statistical techniques are employed to assess whether increasing occupier satisfaction leads to greater returns for investors. These include comparing excess returns and risk-adjusted returns with occupier satisfaction at each property to assess whether superior property management generates outperformance (“positive alpha”). The study also investigates whether the relationship between occupier satisfaction and returns is the same across all sectors and whether it is affected by market conditions.

A positive correspondence is found between benchmark outperformance and occupier satisfaction. The relationship is similar for all sectors of commercial property and is particularly strong during the Global Financial Crisis, indicating that paying attention to satisfying the needs of occupiers has particular benefits during periods when the supply of commercial real estate exceeds demand.

The sample of properties was restricted to those for which occupier satisfaction data had been collected by RealService Ltd and whose owners permitted access to the financial performance results. This meant that the properties belong to only three landlords, all UK REITs that care sufficiently about occupier satisfaction to commission studies. Thus the findings might not apply to all commercial properties. The mechanism by which the positive relationship between satisfaction and financial performance occurs is not tested, but the conventional mechanisms of reputation and customer loyalty (the “service-profit chain”) are discussed.

The findings suggest that it is worthwhile for landlords, or property managers acting on their behalf, to understand the needs of their occupiers in order to deliver the level of service that those occupiers desire. Leases in the UK are generally “triple net” and the total returns used for this analysis are net of property management costs, so the positive relationship between satisfaction and performance is not the result of economising on service delivery. A further implication is that valuers should take more account of occupier satisfaction when assessing the capital value of a property, from which total returns are assessed.

Demonstrating the links between customer service, customer satisfaction and business profitability is rarely attempted because of the many confounding factors that affect profitability. UK listed real estate companies are typically reluctant to reveal the financial performance of individual properties, and information about occupiers’ satisfaction is not generally available. The authors were fortunate to be granted access to a time series of such data, and to be able to demonstrate that attention to delivering a property management service that satisfies occupiers is likely to bring financial rewards to the owners of the property.

The purpose of this paper is to explore capital gains, income, and total returns in various property markets in Europe. In a comparative study the nature of returns for different commercial and residential properties is investigated. Hereby, total returns, income returns, and capital growth are distinguished. The paper further presents an analysis of the risk‐return relationship of the different markets and investigates the interactions between property markets, other local financial markets, and macroeconomic variables.

Focusing on the risk‐return relationship of the different asset classes and countries, the Sharpe ratio is used as a risk‐adjusted performance measure to investigate the European markets. Using a simple linear regression model, a comparison of the European commercial property markets with respect to their returns and risk are provided. Finally, a capital asset pricing model (CAPM) and factor models based on arbitrage pricing theory (APT) are used in an effort to further explain the spreads and risk premiums for individual property markets.

The large differences between the markets regarding spreads, risk premiums, and risk‐return relationships are found. Overall, the Dutch market can be regarded as giving the highest compensation for the risk taken by the investors in the last decade, while the German market performed the worst and was the only market with negative capital growth rates for the considered period. Applying the CAPM, It has also been found total returns in commercial property markets are not significantly related to the performance of stock market indices. On the other hand, factor models using macroeconomic variables are able to explain a higher fraction of property total return spreads over the risk‐free rate in the considered countries. But depending on the country, different macroeconomic variables were estimated to be significant such that there is no single factor model available that could be applied to all European markets. Overall, these findings indicate that classic financial models drawing on existing datasets are unable to satisfactorily explain the performance of property as an asset class. On the other hand, the fact that property office markets yield relatively high returns that exhibit rather low correlations with stock market returns, makes them a very suitable candidate for portfolio diversification.

The paper investigates the risk‐return relationship in various European property markets. The large differences between the markets observed also partly explain the diversity of literature results on this relationship across single countries by, e.g. Goetzmann, Englund, or Bourassa et al. By using classic financial models like the CAPM or APT a contribution to the literature is made by explaining the factors that actually determine property returns over the risk free rate in different countries.

This chapter introduces empirical studies of firm performance and related risk outcomes conducted in the management and finance fields presenting underlying theoretical rationales as they have evolved over time. Early finance studies of market-based returns predominantly found positively skewed return distributions that conform to assumptions about higher returns associated with more risky investments. Subsequent studies found that performance outcomes measured as accounting-based financial returns generally display left-skewed distributions that reflect negative risk-return relationships. This artifact was first observed by Bowman (1980), thus often referred to as the “Bowman paradox” because it contravened the conventional assumptions in finance. The management studies have largely confirmed the inverse risk-return observations but often following rather confined research streams. A contingency perspective inspired by prospect theory and behavioral rationales have investigated the lagged effects of performance on risk outcomes and vice versa. Another stream has focused on the spurious relationships between negatively skewed performance distributions and the inverse risk-return associations. A third approach considered the performance and risk outcomes as deriving from the firms responding in distinct ways to exogenous changes. These studies reach comparable results but underpinned by very different rationales. The finance studies observe deviations from the pure doctrine of positive risk-return associations embedded in the widely adopted capital asset pricing model (CAPM) and note deficiencies with alternative interpretations that even question the validity of CAPM. A more recent strain of studies in behavioral finance observes how many (even professional) investment managers have biases that lead to inverse relationships between perceived risk and return outcomes. While these diverse fields of study have different starting points, they uncover an increasing number of interesting commonalities that can inspire the ongoing search for explanations to observed left-skewed financial returns and negative risk-return correlations across firms.

This paper uses a stakeholder framework to review the empirical literature on corporate social performance (CSP), focusing particularly on studies attempting to correlate social with financial performance. Results show first that most studies correlate measures of business performance that as yet have no theoretical relationship (for example, the level of corporate charitable giving with return on investment). To make sense of this body of research, CSP studies must be integrated with stakeholder theory. Multiple stakeholders (a) set expectations for corporate performance, (b) experience the effects of corporate behavior, and (c) evaluate the outcomes of corporate behavior. However, we find that the empirical CSP literature mismatches variables in terms of which stakeholders are relevant to which kind of measure. Second, only the studies using market‐based variables and theory show a consistent relationship between social and financial performance, particularly those showing a negative abnormal return to the stock price of companies experiencing product recalls. Although this paper shows that the CSP construct is not yet well‐specified enough to produce stronger results, recent research suggests that much progress is being made both empirically and theoretically in developing valid and reliable measures of corporate social performance.

The focus of this article is upstream relational capital, the intangible value of a firm's business relations with its suppliers. The paper aims to propose and test a valuation model of an organization's upstream relational capital that incorporates the leveraging impact of IT investments.

A survey was carried out of 159 CEOs in the wireless telecommunication industry.

Evidence suggests that IT and non‐IT factors contribute to explain abnormal return on relational investments.

This exploratory study is based on a single industry and relational capital is valued by CEO using psychometric scales.

This study shows how IT‐related information helps external investors to value a firm's upstream relationship capital and hence assess the impact of interorganizational IT investments on the firm's valuation.

These results militate for more transparency in regard to relational investments and the relational context of the firm in the management discussion section of the annual report.

Considering the unique data of the gold investor sentiment index in Thailand, the purpose of this paper is to investigate the bivariate dynamic relationship between the gold investor sentiment index and stock market return, as well as that between the gold investor sentiment index and stock market volatility, using the panel vector autoregression (PVAR) methodology. The author presents and discusses the findings both for the full sample and at the industry level. The results support prior literature that stocks in different industries do not react similarly to investor sentiment.

The PVAR methodology with the GMM estimation is found to be superior to other static panel methodologies due to considering both unobservable time-invariant and time-variant factors, as well as being suitable for relatively short time periods. The panel data approach improves the statistical power of the tests and ensures more reliable results.

In general, a negative and unidirectional association from gold investor sentiment to stock returns is observed. However, the gold sentiment-stock realized volatility relationship is negative and bidirectional, and there exists a greater impact of a stock’s realized volatility on gold investor sentiment. Importantly, evidence at the industry level is stronger than that at the aggregate level in both return and volatility cases, confirming the role of gold investor sentiment in the Thai stock market. The capital flow effect and the contagion effect explain the gold sentiment-stock return relationship and the gold sentiment-stock volatility relationship, respectively.

The gold price sentiment index can be used as a factor for stock return predictability and stock realized volatility predictability in the Thai equity market.

Practitioners and traders can employ the gold price sentiment index to make a profit in the stock market in Thailand.

This is the first paper to use panel data to investigate the relationships between the gold investor sentiment and stock returns and between the gold investor sentiment and stocks’ realized volatility, respectively.