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This paper investigates the relationship between the sustainable finance disclosure regulation (SFDR) and the performance of unlisted real estate funds.

While existing literature has primarily focused on the impact of voluntary sustainability disclosure, such as certifications or reporting standards, this study addresses a significant research gap by constructing and analyzing the financial J-Curve of 40 funds under the SFDR. The authors employ a panel regression analysis to examine the effects of different SFDR categories on fund performance.

The findings reveal that funds categorized under Article 8 of the SFDR do not exhibit significantly poorer performance compared to funds categorized under Article 6 during the initial phase after launch. On average, Article 8 funds even demonstrate positive returns earlier than their peers. However, the panel regression analysis suggests that Article 8 funds slightly underperform when compared to Article 6 funds over time.

While investors may not anticipate lower initial returns when opting for higher SFDR categories, they should nevertheless be aware of the limitations inherent in the existing SFDR labeling system within the unlisted real estate sector.

To the best of our knowledge, this study represents the first quantitative examination of unlisted real estate fund performance under the SFDR. By providing unique insights into the J-Curves of funds, our research contributes to the existing body of knowledge on the impact of sustainability regulations in the financial sector.

Facilities management (FM) plays a key role in the performance of businesses to ensure the comfort of users and the sustainable use of natural resources over operation and maintenance. Nevertheless, reactive maintenance (RM) services are characterised by delays, waste and difficulties in prioritising services and identifying the root causes of failures; this is mostly caused by inefficient asset information and communication management. While linking building information modelling and the Internet of Things through a digital twin has demonstrated potential for improving FM practices, there is a lack of evidence regarding the process requirements involved in their implementation. This paper aims to address this challenge, as it is the first to statistically characterise RM services and processes to identify the most critical RM problems and scenarios for digital twin implementation. The statistical data analytics approach also constitutes a novel practical approach for a holistic analysis of RM occurrences.

The research strategy was based on multiple case studies, which adopted university campuses as objects for investigation. A detailed literature review of work to date and documental analysis assisted in generating data on the FM sector and RM services, where qualitative and statistical analyses were applied to approximately 300,000 individual work requests.

The work provides substantial evidence of a series of patterns across both cases that were not evidenced prior to this study: a concentration of requests within main campuses; a balanced distribution of requests per building, mechanical and electrical service categories; a predominance of low priority level services; a low rate of compliance in attending priority services; a cumulative impact on the overall picture of five problem subcategories (i.e. Building-Door, Mechanical-Plumbing, Electrical-Lighting, Mechanical-Heat/Cool/Ventilation and Electrical-Power); a predominance of problems in student accommodation facilities, circulations and offices; and a concentration of requests related to unlisted buildings. These new patterns form the basis for business cases where maintenance services and FM sectors can benefit from digital twins. It also provides a new methodological approach for assessing the impact of RM on businesses.

The findings provide new insights for owners and FM staff in determining the criticality of RM services, justifying investments and planning the digital transformation of services for a smarter provision.

This study represents a unique approach to FM and provides detailed evidence to identify novel RM patterns of critical service provision and activities within organisations for efficient digitalised data management over a building’s lifecycle.

This paper attempts to examine the impact of merger on the stock returns and economic value added (EVA) of acquiring firms to know if the mergers are successful corporate restructuring strategies for the firms.

In total, 108 Indian firms are studied using paired sample t-test and Wilcoxon signed rank test for comparing the EVA of acquiring firms in short, medium and long term after merger. The effect of merger announcements on stock returns is analyzed by way of event study. An event window of −20 to +20 is taken and an estimation window of 256 (-276 -20) days is used in the study.

The authors find that mergers lead to significant improvement in the EVA of acquiring firms. However, the increase in financial performance and EVA is witnessed only in long term. The authors did not find any significant impact of merger announcement on the stock returns of acquiring firms.

The study is a first of study's kind, which evaluates both short-term (using event study methodology) and long-term (using EVA) impact of value addition to an acquirer after Merger & Acquisition (M&A). The study contributes to existing literature on the signaling theory of announcement of M&As and synergy gain theory of completed M&As by providing evidence from the context of an emerging market like India.

This study aims to explore the effect of chief executive officer education on firms’ action timing and acquisition performance in industry merger waves. In addition, this study investigated the moderating influence of CEO duality and firm cash flow on the relationship between education and entry timing.

Following the methodology for determining merger waves in previous studies, the authors identified 16 industry merger waves of Chinese listed firms from 2008 to 2019. Multiple linear regression was employed to examine the hypotheses.

The results showed that higher CEO education was associated with early participation in merger waves. CEO duality negatively moderated the education-entry timing relation. The effect of CEO education on entry timing was more pronounced when firms had higher cash flow. Moreover, more educated CEOs materially enhanced acquisition performance in merger waves.

Entry timing in industry merger waves has important implications, as early movers establish competitive advantages and achieve higher acquisition performance. However, the managerial characteristics determining entry timing have not received adequate attention. Meanwhile, studies examining the effect of CEO education on acquisitions are limited. This study explored the effect of CEO education on firms’ entry timing and acquisition performance in merger waves, thereby contributing to the literature on merger waves and managerial characteristics. This study’s findings regarding the moderators of the education-entry timing relation enrich the literature on corporate governance and agency theory.

This study employs firm-level data to evaluate how the knowledge economy impacts the financing constraints of businesses across 106 low- and middle-income nations, focusing on the influence of technological transformation on corporate financing choices.

The research centers on privately held, unlisted firms and examines the distinct effects of knowledge at both the within-country and between-country levels using a panel dataset. Rigorous sensitivity and endogeneity analyses are conducted to ensure the reliability of the findings.

The findings indicate that greater levels of the knowledge economy correlate with reduced financing constraints for firms. However, this effect varies depending on the location within a country and across different geographical regions. Firms situated in larger urban centers and more innovative regions reap the most significant benefits from the knowledge economy when seeking external funding. Conversely, firms in smaller cities, rural areas and regions characterized by structural and institutional inefficiencies in knowledge generation experience fewer advantages.

The impact of knowledge exhibits variability not only within and among countries but also between poor and affluent developing nations, as well as between larger and smaller countries. The knowledge effect on firms' access to external finance is influenced by factors such as financial openness and development, educational quality, technological absorption capabilities and agglomeration conditions within each country.

Referring to “behavioural finance” and “normative model” theories, this study explores the relative significance of behavioural heuristic biases in the investment decisions of real estate investment trusts (REITs) when compared with the conventional normative decision factors, with an ultimate aim to identify the significant behavioural factors that should be avoided to ensure rational asset acquisitions and market efficiency.

A triangulation approach was adopted. Qualitative multiple case studies were conducted, with four cases selected from Australian and New Zealand REITs across the industry, to identify what normative and behavioural finance factors are involved in investment decisions. This formed the basis for the subsequent expert review survey to explore how significant the behavioural factors were manifested in the judgement when compared with the normative factors.

Three out of four theoretical behavioural factors manifested themselves in the investment decisions: investor sentiment, anchoring factors and overconfidence. The overall impact of these three behavioural factors was that they were as significant as normative factors in investment decisions. The heuristic availability of information was found to have no significant effect on experienced REIT fund managers.

The findings were based on four multiple cases and an expert review survey of six frontline fund managers, which form a baseline upon which further research can be conducted to widen the scope of research to cover all REITs in Australasia so that the results can become more robust to benefit the entire market in the region.

As behavioural factors are significant in the decision-making process, REIT fund managers should raise awareness to avoid the significant behavioural factors identified, in particular investor sentiment, which was found to be the most significant one.

This study confirms the relative significance of behavioural factors in property investment decisions within the context of Australasian REITs and alerts fund managers to the ways they should follow to ensure rational investments and market efficiency. It also extends the scale of existing studies to cover not only Australia but also New Zealand for the benefit of the entire Australasian market.

The authors investigate the effects of Chinese acquirer’s chief executive officer (CEO) risk preference on mergers and acquisitions (M&A) payment method and the moderating roles played by acquirer’s ownership, industry relatedness and whether the M&A is cross-border.

Using 4,624 worldwide M&A deals conducted by Chinese firms from 2009 to 2021, the authors conduct multiple linear regression and ordered probit regression. And comprehensive indexes constructed based on the observed features of acquirer’s CEOs are used to be the proxy for CEO risk preference.

The results show that the higher-level Chinese acquirer’s CEO risk preference is overall positively associated with using more stock in payment. Moreover, the above relationship is strengthened if the ownership of the acquirer is state-owned.

The authors highlight the importance of the non-economic factors and demonstrate a relationship between the Chinese acquirer’s CEO risk preference and the M&A payment method, providing support for and enriching the upper echelons theory (UET). Moreover, the unique risk priorities of Chinese acquirers’ CEOs are revealed.

Extensive macro- and micro-economics research has been conducted on China's tax reform, which replaced business tax with value-added tax (VAT). However, existing studies have not clarified the reform's impact on firm-level investment decisions. Hence, this study explored the effect of replacing business tax with VAT on firms' investment efficiency.

The study used 2010–2018 data from China's A-share listed companies and a difference-in-differences (DID) model to explore the effect of the reform on firm-level investment decisions.

The authors found that China's tax reform has improved investment efficiency in underinvested firms, increased liquidity and decreased the level of reliance on external financing. The tax reform had a greater effect on investment efficiency in firms with lower liquidity and higher external financing reliance. Its effect was also more significant among non-state-owned and small companies.

This study fills the aforementioned research gap by exploring the effects of China's tax reform, thus providing a theoretical reference and a basis for policymaking.

The case study is designed to help students understand how the “growth at all costs” attitude can lead to compromised corporate governance in a start-up leading to disastrous implications for all the stakeholders. This case study aims to make students understand the components of the fraud triangle, the impact of financial fraud on various stakeholders, the role of venture capitalist (VC) investors and the importance of good corporate governance in start-ups. The case study presents an excellent opportunity for students to discuss the consequences of ignoring good governance in the pursuit of growth in a start-up. After analyzing the case study, the students shall be able to explain the concept of the fraud triangle and to be able to identify the motivation, opportunity and rationalization of financial irregularities in a start-up; analyze the impact of financial irregularities on various stakeholders; comprehend the business model of VCs and evaluate its influence on VC-funded start-ups; and appraise the importance of good corporate governance in start-ups.

The case study revolves around the confession of financial irregularities made by one of the cofounders of GoMechanic, a start-up headquartered in Gurugram, India. On January 18, 2023, Amit Bhasin confessed to financial irregularities in the company’s financial statements, leading to laying off 70% of the workforce of the company. GoMechanic had earlier raised close to US$62m [1] from maverick global investors including Sequoia Capital, Tiger Global, Orios Venture Partners and Chiratae Ventures, and was negotiating to raise Series D financing from the Japanese multinational SoftBank with aspirations to be a unicorn (start-up with a valuation of over $1bn). The confession led to a debate about the consequences of the “growth at all cost” culture being followed by start-ups as well as VCs. GoMechanic was not an isolated instance of a lack of governance in the start-ups. The confession had consequences not only for the GoMechanic but for the entire start-up ecosystem of India, which was the third largest in the world. Bhasin stated that the founders take full responsibility for the situation, and they were working on a plan which was most viable under the circumstances. However, it was not going to be easy to regain the confidence of the investors.

The case study is best suited for senior undergraduate- and graduate-level business school students and in executive education programs in courses such as corporate governance and ethics, private equity and entrepreneurial finance.

Teaching notes are available for educators only.

CSS 1: Accounting and finance

The financial system has witnessed the substantial growth of financial technology (fintech) firms. One of the strategies that banks have adopted to cope with this emergence is to cooperate with fintech firms. This study empirically investigated whether cooperation between banks and fintech companies would improve banks’ risk-adjusted returns.

We developed a novel index of bank–fintech cooperation across various fintech sectors. A system generalized method of moments (GMM) was used to examine this relationship using a sample of Vietnamese banks from 2007 to 2019.

The findings show that the diversity of bank–fintech cooperation across seven sectors tends to enhance banks’ risk-adjusted returns. The results also highlight that this relationship may depend on the types of fintech sectors and bank ownership. More specifically, the positive association between this cooperation and banks’ risk-adjusted returns only holds in the comparison sector of fintech, whereas there is a negative relationship between them in the payments and mobile wallets sector. Furthermore, state-owned commercial banks that engage in more bank–fintech cooperation tend to generate greater earnings. If we look at listed banks, the positive effect of bank–fintech partnerships on risk-adjusted returns still holds. A similar result was also found in the case of large banks.

Our empirical evidence provides motivations for incumbent banks to implement appropriate strategies toward diversity in bank–fintech partnerships when fintech firms have engaged in various financial segments.

This study adds more evidence to the existing literature on the relationship between bank–fintech cooperation and bank performance.